Home prices have slowed their stratospheric growth over the past few years after skyrocketing due to the pandemic. However, housing prices remain high in many rural areas. This is especially true in states like California, which has some of the most expensive real estate in the United States. But even with California’s rising standards, certain markets remain significantly overpriced, according to data from Zillow and other providers analyzed by Florida Atlantic University’s College of Business. Researchers there created a unique methodology to examine how much of a premium or discount homebuyers are getting at current levels in each of the top 100 U.S. housing markets.
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Based on this analysis, here are the 10 most overpriced housing markets in California, in reverse order.
san jose
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Average listing price: $1,614,185
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Expected house price: $1,421,116
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premium: 13.59%
San Jose is in the heart of Silicon Valley and has always been an expensive address. So it’s no surprise that San Jose is on the list of overpriced housing markets. But the fact that this city ranks him in 10th place with a premium of only 13% may well be the case. According to FAU’s methodology, the average home price in San Jose as of March 31 is high at $1,614,185, but still near similarly high expected prices.
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Los Angeles
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Average listing price: $960,594
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Expected house price: $843,743
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premium: 13.85%
Like San Jose, Los Angeles has always been a city with a lot of luxury homes. Since the pandemic ended, premiums for housing in Los Angeles rose to nearly 20%, he said, but have since settled to a more manageable 13.85%. Many residents are fleeing Los Angeles due to the city’s high cost of living, which is likely contributing to the city’s flattened price premium, according to a new report.
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oxnard
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Average listing price: $867,274
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Expected house price: $749,122
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premium: 15.77%
Oxnard is a little-known coastal city in Southern California located 90 miles northwest of Los Angeles and 55 miles south of Santa Barbara. Home prices are on the expensive side, but at around 16% above expected prices, that’s not too bad for a seaside city. Still, the average home price in Oxnard is $867,274, more than double the national average, meaning homebuyers will pay a premium of about $118,000 over the expected price.
sacramento
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Average listing price: $580,804
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Expected house price: $497,091
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premium: 16.84%
Home prices in the state capital are about 17% higher than the expected price of $497,091. Like most cities in California, insurance premiums will peak in the summer of 2022, and in Sacramento’s case are about 32% higher than expected. Since then, home prices have actually fallen a bit, helping to reduce relative premium valuations.
fresno
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Average listing price: $393,138
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Expected house price: $321,996
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premium: 22.11%
Fresno is one of many cities in inland California struggling with rising prices due to an influx of residents. The average home price in the city many call the capital of the Central Valley is about $71,000 above expected prices, according to an FAU analysis. Home prices in Fresno were at a discount until September 2020, at which point home prices skyrocketed and remain at a premium.
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bakersfield
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Average listing price: $347,079
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Expected house price: $281,257
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premium: 23.40%
Bakersfield, a frequent stop for travelers along California’s long stretch of Interstate 5, is home to approximately 416,000 residents, many of whom would pay significantly more for housing at current prices. I am. Although the average home price is still below the national average, the expected home price is only $281,257, resulting in a high premium.
san diego
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Average listing price: $946,976
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Expected house price: $764,788
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premium: 23.82%
San Diego has long been ranked as one of the best places to live in the country. From its vast coastline to its high quality of life to what some consider to be the best climate in the world, be prepared to pay a pretty penny if you want to live in San Diego. Currently, the city’s premium is 23.82%, making it one of the most expensive places in the state. The average home price is already about $182,000 above the high expected price of $764,788.
riverside
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Average listing price: $579,859
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Expected house price: $465,555
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premium: 24.55%
One reason home prices are soaring in inland areas like Riverside is that some Californians living in expensive coastal areas are seeking cheaper housing and more living space. Riverside’s price soared to a 32.62% premium as of July 31, 2022, and although it has since calmed down a bit, the premium has increased again since April 30, 2024.
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stockton
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Average listing price: $540,147
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Expected house price: $424,650
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premium: 27.20%
Stockton is also an inland city, and while it may not seem like a popular destination, it’s still inundated with bargain hunters when it comes to the cost of living. Stockton also suffers from a severe housing shortage, which is pushing prices higher than expected, according to Norada Real Estate Investments. The average home in Stockton currently sells for $540,147, well above the national average and $115,000 more than expected.
modesto
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Average listing price: $464,077
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Expected house price: $351,615
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premium: 31.98%
Modesto tops the list as the most expensive housing market in all of California. Currently, home prices there are a whopping 32% higher. Californians and others seeking a more affordable cost of living are flocking to markets like Modesto, where average monthly costs are only 13% higher than the national average. By comparison, the cost of living in expensive San Jose is a whopping 75% higher.
GOBankingRates Details
This article originally appeared on GOBankingRates.com: Housing Market 2024: California’s 10 Most Expensive Housing Markets
