How much is YOUR home worth? Well, if your in Flagstaff (if you’re reading this you likely are) then just know that Flagstaff is 10th in US in overvaluation of homes. So, maybe it’s NOT worth what they say? Or it is? How does that work anyway?

Anyway, Flagstaff has made a national top-ten list when it comes to the housing market. According to data provided to “Fox Television stations by Moody’s Analytics,” homes in 97-percent of U.S. metro areas are overpriced, with the most overvalued markets seeing homes priced at 50-to-70-percent more than what they are worth.

According to “Moody’s,” Flagstaff is tenth in the nation when it comes to the most overvalued markets at 51-percent. That’s not the highest in Arizona though.

Moody’s says many of the smaller markets, like Flagstaff, are seeing overvaluation due to demand for second-home buying. However, they predict housing prices will flatten out for the next two-to-three years as incomes and rents catch up and valuations normalize over time. Overvaluation is compared to the historical norms of local household incomes, rents and construction costs.

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Where’s it Heading?

As the high interest rate-induced U.S. housing slump deepens, national housing experts and economists are watching home prices dip across the country — with some regional pockets dropping much faster than others.

Predictions vary for just how deep and widespread home price declines will be leading into 2023 and beyond, but at least one national economist is forecasting national home prices to decline up to 5%. But if the nation’s economy enters a recession? That prediction bumps up to a 5% to 10% national price decline.

That’s what Moody’s Analytics chief economist Mark Zandi hinted at, they reported Moody’s quarterly analysis on Tuesday.

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Flagstaff 10th In US In Overvaluation Of Homes

According to Moody’s analysis, there are now 210 housing markets across the nation that are “significantly overvalued” — or overvalued by more than 25%. In those markets, Moody’s predicts home prices to fall 5% to 10%. If a recession hits? Home prices in those regions could take 15% to 20% hits.

“Simply put, over half of the nation’s largest regional housing markets are vulnerable to home price declines of 15% to 20%. For perspective: Peak to trough, U.S. home prices declined 27% between 2006 and 2012,” Fortune reported.

Low mortgage rates, especially when they were below 3% in 2020, masked the impact of dramatic price increases. Now that that mask has lifted and prices have stayed high, that’s meant the difference of hundreds of dollars a month in mortgage payments for would-be homebuyers.

‘Overvalued’ housing markets in the West

Of those 210 “significantly overvalued” housing markets pinpointed in Moody’s analysis (out of about 400 regional markets), at the top is a familiar metro in the West that’s made plenty of headlines for its wild, skyrocketing home prices amid the pandemic housing frenzy that’s since fizzled into a hangover: Boise.

Arizona In General

Arizona

• Phoenix — what’s been called the “poster child” for the pandemic housing boom effect and one of the first areas to see home prices fall as the housing market corrects — is overvalued by over 57%, according to Moody’s.
• Flagstaff is another metro washed in red, estimated to be overvalued by over 65%.
• The Lake Havasu City-Kingman metro area is estimated to be overvalued by over 60%.
• Prescott Valley is estimated to be overvalued by over 51%.
• Tucson is estimated to be overvalued by over 34%.