These California housing markets are the ‘most overpriced’ — Valley city commands 31% premium – Yahoo! Voices

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California’s real estate market is one of the most expensive in the country and some markets in the state continue to be “extremely overpriced,” according to an analysis of housing market data.

Sacramento ranked as one of the state’s top 10 most overpriced markets with the listing price for a single-family home averaging at $580,804.

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Modesto was ranked the state’s most overpriced market with homes going for 32% above what they should be priced, according to the research. Several factors contributed to the skyrocketed prices, including low inventory of houses for sale, competitive bidding by buyers, higher mortgage rates and inflation.

“California residents — and others — looking for a more affordable cost of living have flooded markets like Modesto, which offers average monthly costs only 13% above the national average,” according to the Go Banking Rates, a personal finance company.

How were housing markets ranked?

Housing data was collected from Zillow and analyzed by Florida Atlantic University’s College of Business.

“Researchers there created a proprietary methodology to see how much of a premium or discount home buyers were getting in each of the top 100 housing markets in the United States at current levels,” according to the personal finance company.

Many of the markets highlighted by the report point to a continuing housing crunch, which have steadily pushed prices higher in markets once deemed a bargain when compared to parts of Los Angeles, the Bay Area and elsewhere.

How does Sacramento’s housing market rank?

The Sacramento housing market ranked as the No. 7 most-overpriced in the state, according to the figures collected by Zillow.

Homes in Sacramento are priced roughly 17% above their expected value of $497,091, according to Go Banking Rates.

“As with most cities in California, premiums peaked in the summer of 2022, at about 32% above their expected value in the case of Sacramento,” according to the personal finance company.

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