Homes are increasingly running on the expensive side across the U.S., but many of those prices are greatly inflated.

Lack of inventory, largely caused by weak growth in home building since the recession, is the culprit responsible for the 1.8% decline in existing home sales in June compared to May, says Joseph Kirchner, senior economist at Realtor.com.

"Though we continue to see record-high demand, sales of existing homes are up by only 0.7% compared to last year," Kirchner says. That demand is driving U.S. home prices up this summer, with some properties in select states seeing home values rise by 10%-or-more this year (the U.S. median home appreciation growth stands at 6.5% right now.).

Some of those properties overvalued, particularly in specific regions . Are you in a city where homes prices far exceed actual values? These places are the biggest culprits.

Looking to buy a house? Don't make these mistakes: 

Watch More with TheStreet: