Stockton is among the 10 most overvalued housing markets in the country, a recent analysis found.
Homes in Stockton are selling for 38.5% more than they should be based on long-term pricing trends, the analysis by professors at Florida Atlantic University and Florida International University found.
Three main factors are likely driving Stockton’s high premiums.
One is a housing shortage. “It’s pretty clear — you have a huge housing shortage problem going on,” both in Stockton and across the U.S., Ken H. Johnson, a real estate economist at Florida Atlantic University, said.
Low interest rates are also driving the inflated prices, Johnson said.
Finally, Stockton is increasingly becoming a popular destination to buy a home, Johnson said. Its population is expected to grow significantly within the next 10 years, he said.
Johnson encouraged people moving to Stockton to consider renting a home and reinvesting their funds. Investing…