The most overpriced housing market in America is not where you'd guess.
It's not Manhattan. It's not San Francisco. It's a small coastal town on California's central coast.
In Santa Maria, the average home is worth about $1.06 million. The typical home is listed at $1.69 million.
That's a $600,000 gap between what homes are worth and what sellers are asking. It's the biggest gap in the country, per a new MoneyLion study of the 200 largest U.S. housing markets.
Six of the top 20 most overpriced markets are in Texas. Corpus Christi, Brownsville, Longview, McAllen, Tyler, and El Paso all made the cut.
The South takes most of the rest:
California also has a second city on the list, Salinas, behind Santa Maria.
In other words, the markets where buyers used to feel like they were getting a deal are now where listings stretch the furthest above what homes are actually worth.
MoneyLion compared Zillow's average home value to the median list price in each market. The bigger the gap, the more overpriced.
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The U.S. housing market is moving in slow motion.
Existing home sales rose just 0.2% in April from March. That's a yearly pace of 4.02 million units, per the National Association of Realtors. Sales were flat from a year ago.
That's well off the long-run norm of about 5.2 million. Sales have been stuck near 4 million since 2023.
Prices, though, keep rising. The U.S. median sales price hit $417,700 in April. That's an all-time record for any April going back to 1999.
Prices are now up year-over-year for 34 straight months. Translation - homes aren't selling fast, but they aren't getting cheaper either.
For buyers, the gap between list price and actual value matters more than ever.
Homes priced above the area's average are the ones sitting longer. They're also the ones most likely to get a price cut before they sell.
For investors, the story is simpler. A market that won't unlock at lower prices and won't trade at higher ones is what a frozen housing market looks like.
A chronic shortage of new homes is keeping prices high even with sales stuck. Any shock to mortgage rates or homebuilder activity will move this market faster than usual.
The South and Texas tell the rest of the story. These were the boom states from 2020 to 2023. Out-of-state buyers paid up for new homes in Sun Belt cities, and sellers haven't reset their pricing yet.
That's why list prices in those metros still sit well above what homes are actually worth today. Watch for price cuts as listings sit longer through the summer.
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