In two NC cities, homes are overpriced by more than 50%, new study estimates

The two largest cities in North Carolina are overvalued by 50% or more, according to a study.

Raleigh and Charlotte are at the same number.

Ken Johnson of Florida Atlantic University said in a news release that if we are not at the peak of the current housing cycle, we are very close.

What is an overpriced housing market?

The researchers looked at the percentage difference between a home's expected price and what buyers are actually paying. The expected price is determined by a statistical model that takes into account long-term trends, while the actual monthly prices paid come from the Zillow Home Value index.

It's overvalued if buyers are paying more than expected.

If buyers are getting less than expected, that means the market is overvalued.

The metropolitan areas in North Carolina are ranked.

• Charlotte's value was overvalued by 55 per cent. The average price for a home in April was $372,300.

• Raleigh's value was overvalued by 51.7%. The average buyer paid almost half a million dollars for a home.

• The value of the city was overvalued by 40.05%. The average price for a home in April was $223,000.

• The value of the city of Winston-Salem was overvalued. The average price for a home in April was $229,612.

Affordability crisis could get worse

Triangle Multiple Listing Service Executive Director Matt Fowler disagrees with the methodology used by the researchers in arriving at the expected price.

Last month, Triangle MLS calculated that the median home in Wake County was selling for six percent more than it was worth. It was 4% in the region.

Raleigh has a tenth of the inventory that is considered healthy.

It is not that homes are not being sold. He said that houses are selling so fast that homes can't come on the market. With interest rates going up, that will slow down. We are still not there. We are keeping an eye on it.

Johnson, of FAU's College of Business, and Eli Beracha, of Florida International University, headed the research.

They have monthly data on condominiums and co-ops since 1996.

Johnson said rising interest rates could cause a slowdown after the rapid rise in home prices.

Johnson said that recent buyers in many of these cities may have to endure stagnant or falling home values while the market settles.

Growing population areas may be affected by affordability issues.

Many homes lost half of their values in the prior downturn, but I don't think we'll see anything like that this time around. It could be difficult for consumers who are near the top of the market.

Fowler said that when it comes to conventional loans for a median home in the Triangle, median income no longer suffices. The housing affordability index has gone down in the last year.

He called it brutal. "It's never been lower"

Most overpriced housing markets in the U.S.

The full top 15 can be found here.

1. The percentage of people in the city of Idaho is 73%.

2. The city of Austin, Texas.

3. The city of Ogden, Utah, has a 65 percent.

4. Las Vegas is in Nevada.

5. Atlanta, Georgia has a rate of 42%.

6. The city of Phoenix, Arizona.

7. A majority of people in Utah.

8. Fort Myers, Florida has a large number of people.

9. The percentage of people in the state of Washington.

10. Salt Lake City, Utah, has a large number of people.

11. Charlotte's percentage is 45%.

12. The city of Lakeland, Florida, has a percentage of 53%.

13. Half of the state of Florida is in the city of Tampa.

14. Raleigh has a percentage of 50%.

15. The city of Detroit, Michigan has a majority.