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The Center Square [By Jon Styf] –
Nashville is the 16th most overpriced housing market in the country, according to analysis from Florida Atlantic University’s College of Business.
Knoxville was also one of the top 10 markets in year-over-year rent increases, with Florida claiming eight of the top 10 spots, in a separate FAU analysis.
Both are signs of a housing market that increased quickly in Tennessee and in many areas of the country as more than 70% of U.S. homes are selling for higher than the listed price, according to a new CoreLogic report. That report showed that home prices nationwide increased by 20.9% year-over-year in the 123rd consecutive month of increases.
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“Many think this will unfold like the last downturn of 2006 to 2012, with home prices falling universally across the country,” wrote Paul Owens of FAU’s College of Business. “But this seems unlikely, given that recent shifts in population and the nationwide shortage of units to rent and own are also contributing factors, unlike during the previous downturn.
“However, a reckoning is due. Home prices and rents can’t separate as significantly as they have from their long-term fundamental trends without major issues arising in the marketplace. Few markets, if any, will escape unscathed.”
Tennessee had the third-highest year-over-year increase in home gains at 27.2%, behind just Florida and Arizona.
Nashville is currently 49.13% over its expected value while Knoxville is 41.77% above it.
Knoxville’s 24% year-over-year rent price increase ranked seventh in the country with Fort Myers, Miami/Fort Lauderdale and Sarasota/North Port/Bradenton leading the way.
Nashville was 20th in those rankings with an average 18.9% increase in rents year-over-year.
“Communities that lose population while finding a better balance of supply and demand almost certainly will experience deep losses in home values and sluggish rental rates from which it will take several years to recover,” Owens wrote. “But the silver lining is that homes and rentals in those areas will be much more affordable. Those metros are likely to include Detroit; Memphis, Tennessee; and Youngstown, Ohio.”
About the Author: Jon Styf, The Center Square Staff Reporter – Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies. Follow Jon on Twitter @JonStyf.
