LAKELAND, Fla. (WFLA) – Lakeland’s homes are priced at a nearly 32% premium, making it Florida’s most overpriced housing market, according to a study from Florida Atlantic University.
Some argue it does not tell the whole story.
“Lakeland is paying a noticeable premium. It’s the highest premium in Florida,” said Ken H. Johnson, a real estate economist and associate dean of the graduate program at Florida Atlantic University.
Johnson said he and his team scoured 25 years worth of data on Zillow.com.
“We can track, roughly, where past prices were. From that, we can statistically estimate where they should be today,” he explained.
They started with Florida’s five largest cities and expanded to 100 cities nationwide. When Lakeland was added to the list, it shot to the top.
Lakeland’s homes were priced at a 31.39% premium. Tampa’s was a close second at 31.35%, according to the study.
“What is most likely driving prices in the Lakeland area is the high influx of population at roughly 24% expected increase in population in the next 10 years, incredibly low interest rates and an inventory shortage,” Johnson said.
“I’d say they’re fairly priced right now,” said Chris McLaughlin, operating principal at Keller Williams Realty of Central Florida.
McLaughlin told 8 On Your Side homes in Lakeland are still more affordable than homes in the closest metropolitan areas: Tampa and Orlando.
“Those houses happen to be $100,000 more than the average price in Lakeland. The average price in Lakeland in July of 2021 was roughly $260,000,” he said.
The homes are in short supply.
McLaughlin says the average home is being sold in 22 days. It usually takes months.
“We have a lot more demand than we do supply and that’s going to keep prices elevated for quite some time,” said McLaughlin.
Johnson, the real estate economist behind the study, said a market where homes are being sold at a premium can set up the potential for “housing shock.”
“You will see fluctuations of downfall in price, and an increase in price. So you could get into these more exaggerated housing cycles. It doesn’t have to happen but it sets the potential there for that to happen,” he said.
The state’s overall popularity will help support housing prices, Johnson expects.
You can view the full study on the FAU website.