The 4 Most Overvalued Housing Markets in America — and the 6 Most Underrated

Real estate is all about location. When home prices accelerate in one city, they might be in a sharp decline somewhere else.

Recently, Fitch Ratings analyzed home prices in the third quarter of 2023 and determined that U.S. housing nationwide is overvalued by 11.1%.

However, that nationwide average masks the fact that while some markets are significantly overvalued, others are in much better shape.

Here are the most overvalued housing markets in the U.S. — followed by several cities where home prices look sustainable, according to a Barron’s report on the Fitch findings.

Memphis, Tennessee

Memphis is known as “America’s distribution center” due to its access to the four “Rs” of logistics: runway, rail, river and road.

The Tennessee city is home to air cargo and passenger hubs, five Class I railroads, the fourth-largest inland port in the U.S., and four interstate highways crisscross it.

Buffalo, New York

Buffalo is one of just three cities in the United States with a radial street pattern. That means that instead of being laid out in a traditional rectangular grid, the New York metro spreads out in a series of concentric circles.

Milwaukee

The downtown Milwaukee Theater District has 15,000 theater seats. That means the area ranks No. 1 for theater seats per capita in the U.S.

Indianapolis

By some accounts, the first loaves of sliced bread appeared on store shelves in Indianapolis. Wonder Bread made its debut in Indiana’s capital city in 1921.

Wonder Bread earned its moniker after an executive at the Taggart Baking Co. was filled with “wonder” while enjoying the International Balloon Race at the Indianapolis Speedway.

The most sustainable markets

While home prices have risen sharply in most markets in recent years, that doesn’t mean every market is overpriced. Despite the rise in home values, Fitch says prices are sustainable in the following markets.

Cleveland

When the lights went on in the Public Square in Cleveland in 1879, the event made history: Cleveland became the first city lit by electricity.

Denver

Denver has fully earned its nickname as the Mile High City: A step on the Colorado Capitol marks the spot where the elevation is 5,280 feet — exactly 1 mile — above sea level.

Los Angeles

There are a lot of people in Los Angeles. The five-county area has more residents than the total populations of all but four states: California, Texas, New York and Florida.

In fact, the population of Los Angeles County alone would place it ahead of all but six states. The county is the first in the U.S. with 10 million residents.

Dallas

Dallas is the ninth-largest city in the United States, but just the third-largest in Texas. The populations of both Houston and San Antonio top the number of people in Big D.

Miami

Miami is the only major U.S. city founded by a woman, a local businesswoman named Julia Tuttle. She did so by convincing a developer to extend the Florida East Coast Railroad deep into South Florida.

Detroit

In 1879, Detroit became the first city to move beyond the “party line” and create individual phone numbers.