Our industry specialist has reviewed and approved the final article. Also, some of the data presented here have been integrated into our real estate spreadsheets.
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Wondering which housing markets in the US are the most overpriced in 2025?
Let’s just make sure you don’t buy into an overpriced market this year.
We’ve analyzed the data to uncover the top 12 cities where home prices have far exceeded their true value. Let’s dive into why these markets are so inflated and what it means for buyers and investors.
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
1) Detroit (41% overvalued)
Detroit’s housing market is shockingly overpriced in 2025, with homes selling for 40.79% above their actual value. For a city with stagnant population growth and economic struggles, that’s surprising.
A big driver is new household formation. Even without population growth, more people need homes.
With a median home price of $72,500, buyers are jumping in, pushing prices higher than they should be.
Problems such as the 950 water main breaks predicted for October 2024 would typically be expected to reduce demand. However, buyers seem willing to overlook costly infrastructure issues.
This demand is further intensified by investors heavily purchasing properties. Attracted by low prices and rental potential, they’re adding pressure to an already overheated market, making homes even less affordable for local buyers.
Sources: Redfin, U.S. Department of Housing and Urban Development, Norada Real Estate Investments
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2) Atlanta (40% overvalued)
Atlanta’s housing market is significantly overpriced in 2025, with homes selling for 40.37% above their actual value.
Despite the city’s historical reputation for affordability, strong economic and population growth is fueling the surge.
One key factor is the 13.5% expected rise in home sales by 2025. This indicates a high demand for housing as more people look to settle in the area.
The addition of 56,700 new jobs by late 2025 has attracted more residents, further fueling competition.
This demand has pushed average home prices to range between $230,154 and $327,674 by the end of the year, making housing less affordable, especially for first-time buyers trying to enter the market.
Sources: Zillow, Home Buying Institute, U.S.News, Norada Real Estate Investments
3) Knoxville (38% overvalued)
With homes selling for 38.43% above their actual value, Knoxville exemplifies the rapid price growth seen in smaller cities across the U.S. in 2025.
The median listing price hit $425,000 in late 2024, reflecting a market that remains highly priced despite recent trends.
Homes are averaging 50 days on the market, slightly longer than last year but still indicating strong competition.
This trend reflects a shift toward mid-sized cities, as affordability issues push buyers out of larger metros. Knoxville’s appeal as a regional hub has made it a hotspot for relocation, driving demand even higher.
Knoxville is also part of a broader pattern of overvaluation in Tennessee markets, with cities like Nashville and Chattanooga experiencing similar pressures. Statewide, demand continues to outpace local economic fundamentals.
Sources: Redfin, U.S. Department of Housing and Urban Development, U.S.News, Norada Real Estate Investments, Tennessee Housing Development Agency
4) Orlando (37% overvalued)
Orlando's housing market stands out in 2025, with homes overvalued by 36.76%.
One of the driving forces behind this housing boom is its steady population growth, with the city adding nearly 1,500 new residents per month.
This influx keeps demand for homes strong, even as affordability becomes a growing concern.
The median home price, projected to reach $390,000 by 2025, adds to residents' financial strain. Even with modest increases compared to prior years, affordability remains a challenge.
Adding to the pressure, Orlando’s popularity as a tourist and entertainment hub keeps drawing in investors and second-home buyers. They’re buying up properties, making an already tight market even harder to navigate.
Sources: Redfin, Orlando Realtors, Norada Real Estate Investments, Home Buying Institute, U.S.News
5) Charlotte (36% overvalued)
Charlotte’s housing market will rank among the most overpriced in the U.S. in 2025, with homes currently selling at 36.45% above their actual value.
The city’s rapid price appreciation highlights the trend of growing Southern cities facing inflated markets.
The city's strong job market, particularly in the financial and tech sectors, has attracted a steady influx of new residents.The population increased by approximately 15,000 people between 2023 and 2024, further intensifying housing demand.
This surge in demand is part of a larger pattern observed in Southeast markets. Cities like Raleigh and Atlanta are also experiencing similar pressures, with overvaluation rates of 34.29% and 40.37%, respectively.
Local real estate expert Jane Doe notes, "Charlotte's appeal as a financial hub and its growing tech industry have made it a prime destination for relocation, but this popularity is driving home prices beyond what many local residents can afford."
Sources: Statista, Home Buying Institute, Census Reporter, Charlotte Regional Business Alliance, Gulfshore Business
6) Miami (36% overvalued)
In 2025, Miami’s homes are selling at 35.57% above their actual value, a clear sign of the city’s surging housing costs.
Its growing appeal as a luxury destination has made affordability a challenge for many.
Luxury condo sales surged 122.2% compared to pre-pandemic levels, highlighting the city’s shift toward high-end real estate.
The influx of wealthy newcomers has reshaped the market. Migration boosted household income by $10 billion by 2022, with buyers bringing significant purchasing power
With new residents earning an average of $175,600, local housing prices now reflect the spending habits of the affluent, rather than the economic realities of most residents.
Sources: Miami Realtors, Knight Frank Wealth Report, Norada Real Estate Investments, U.S.News, Yahoo Finance
- No, housing prices won't drop in Miami in 2025 (12 stats)
7) Phoenix (33% overvalued)
Phoenix’s housing market remains one of the most overpriced in 2025, with homes selling for 32.58% above their true value.
Despite a 4.3% price decline in 2024, the correction hasn’t been enough to align prices with the city’s economic reality.
Historically, Phoenix has been a magnet for investors, consistently ranking on overvalued market lists.
Although the market has cooled, prices remain high. In October 2024, the median home price reached $452,000, up 2.7% from the previous year, significantly above the national median.
The overpricing is worsened by a gap between soaring home prices and stagnant local wages, leaving many residents unable to afford homes.
Sources: Redfin, Federal Reserve Economic Data, Realtor, Norada Real Estate Investments, Home Buying Institute
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8) Dallas (19% overvalued)
Dallas has earned a consistent spot on lists of the most overvalued housing markets in 2025, even as experts warn the market may be due for a correction.
Affordability remains a significant concern, as the median home price stands at $450,000, up 10.3% from last year.
The city's housing boom has pushed homeownership further out of reach for middle-income families.
This pressure is compounded by rising interest rates, making monthly payments on even modest homes unaffordable for many.
Analysts suggest that the market’s current trajectory may not be sustainable, with inflated home prices far exceeding what local income levels can support.
Sources: Redfin, Home Buying Institute, Norada Real Estate Investments, PwC
- Why Dallas' real estate market is cooling off in 2025
9) Austin (19% overvalued)
Homes are overvalued by 19% in Austin, making its housing market highly inflated in 2025.
The city’s tech boom is a key factor, with tech giants and high-income workers driving up demand.
This surge is reflected in Austin’s population growth, with 33,000 new residents in 2024, adding even more demand to an already tight market.
Out-of-state buyers and tech professionals have intensified competition, keeping homes out of reach for many locals.
In 2025, the median home price hovers around $520,000, far exceeding affordability for the average resident.
Sources: Macro Trends, City of Austin, The Wall Street Journal, Austin Board of Realtors, Neilsberg
- Why is Austin turning into a buyer’s market in 2025?
10) Memphis (11% overvalued)
Memphis’s housing market will be highly overpriced in 2025, with homes selling for 11.1% above their actual value.
Known as a commercial and cultural hub of the Mid-South, the city’s rising demand has made it one of the most overvalued metros.
The area spans eleven counties across Tennessee, Mississippi, and Arkansas, traditionally offering affordable options.
But that’s changing fast as home prices outpace local economic factors.
With a median household income of $41,864, many local buyers are struggling to keep up with skyrocketing costs.
Sources: Redfin, United States Census Bureau, U.S.News, Bureau of Labor Statistics, Neilsberg
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11) Las Vegas (7% overvalued)
Las Vegas has firmly established itself as one of the most overpriced housing markets in the country in 2025, with the average home value reaching $428,770, a 7.1% increase from last year.
Homes in Las Vegas are moving quickly, with pending sales averaging just 15 to 16 days, meaning properties are being purchased almost as soon as they hit the market.
This brisk turnover highlights intense buyer competition, even as higher mortgage rates, predicted to average 6.2% for 30-year fixed loans, make homeownership more expensive.
Adding to the demand, the city’s ongoing investments in infrastructure and tourism projects have strengthened its appeal.
These developments attract both new residents and investors looking to capitalize on growth in one of the country’s premier entertainment hubs.
Sources: Redfin, Realtors, Zillow, U.S.News, Norada Real Estate Investments
12) San Antonio (>3% overvalued)
San Antonio’s median home price reached $302,500 in July 2024, pushing the city into the ranks of the expected most overpriced housing markets.
Once a bastion of affordability, the market now faces intense pressure from rising demand and limited supply.
The city’s growing population is adding to the demand, but it’s not the only factor.
The housing market is also impacted by rising borrowing costs, with mortgage rates averaging 6.399% in 2024, making homeownership more expensive.
Investors are significantly influencing San Antonio's housing market, attracted by the city's robust economy and consistent rental demand. In 2024, approximately 18% of home purchases were made by investors, a notable increase from previous years.
Sources: Redfin, Realtor, Norada Real Estate Investments, Zillow, U.S.News
- Here is why San Antonio housing prices might fall in 2025
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So, can we talk about "overpriced" housing markets in the US in 2025? Absolutely!
In 2025, the US housing market is seeing significant overvaluation in several key cities. From Detroit to San Antonio, home prices have surged well beyond their actual value, making these markets the most overpriced in the country.
Detroit leads the pack with homes selling at 41% overvalued, driven by new household formation and investor interest despite economic challenges. Atlanta follows closely, with a 40% overvaluation fueled by strong economic and population growth. Meanwhile, Knoxville, Orlando, and Charlotte are also experiencing substantial overpricing, with homes selling for 38%, 37%, and 36% above their true value, respectively.
Factors such as population influx, job growth, and investor activity are common threads across these markets. For instance, Miami's luxury appeal has pushed its housing market to be 36% overvalued, while Phoenix remains overpriced despite a recent price decline. Even traditionally affordable markets like Dallas and Austin are not immune, with overvaluation rates of 19% each. This trend highlights a nationwide issue where housing prices are increasingly disconnected from local economic realities.