If the retirees and sun lovers living in Florida were looking for some positive news this winter, the good people at Forbes aren't going to help. The magazine just came out with its list of places with the most overpriced homes in the U.S. and, as you can imagine, Florida tops the list.
The list looks at cities where properties stay on the market longer and sell for less than asking price, and three of the top 5 cities on the list come from the Land of Sunshine. Using data from the S&P/Case Shiller Home Price Index, Moody's, and Altos Research, the magazine took the top 40 MSAs (Metropolitan Statistical Areas), and used the following four criteria to determine the most overpriced:
• Properties with Price Reductions
• List Price vs. Absorbed Price
• Days on Market
• Five Year Price Forecast
Most of these are self explanatory, but for those that don't know, Forbes describes the absorbed price of a home as "what it was priced when it went off the market. It differs very slightly from sale price, as not all sales in this category have necessarily closed. But data on absorbed homes is more current, because home sales can take months to close after the price is set."
So, assuming that the experts that compiled this data know what they are doing, and are correct in their assumptions and methodologies, we should have a pretty good idea of those areas where homeowners are about to get steamed.
Here are the top (or should I say bottom 10) MSAs as per Forbes:
1. Orlando-Kissimmee, Fla., metro area
2. Miami-Fort Lauderdale-Pompano Beach, Fla., metro area
3. Jacksonville, Fla., metro area
4. Baltimore-Towson, MD., metro area
5. Chicago-Naperville-Joliet, Ill.- Ind.-Wisc. metro area
6. San Antonio, Tex., metro area
7. Denver-Aurora, Colo., metro area
8. Tampa-St. Petersburg-Clearwater, Fla., metro area
9. Indianapolis-Carmel, Ind., metro area
10. Austin-Round Rock, Tex., metro area
Do you live in one of these areas? What do you think?
Joshua Dorkin is the founder and CEO of BiggerPockets.com, a real estate information, resource, and social networking portal.
Forbes smacks down Florida, land of the overpriced home