Miami has become one of the least affordable housing markets in the country, and now residents are looking to live elsewhere, according to a recent study. Prices have spiked mainly due to foreign investors, while wages and average incomes have continued to remain the same. Now, the city is paying the price as residents leave for greener, cheaper pastures.
Market trends collide
Single family home prices averaged at $321,000 this February, up from $270,221 the same month last year, says The Real Deal, a South Florida real estate publication. The median home price of a home listed in Miami-Dade was $380,000 this February, an increase of 8.4 percent from this time last year, according to Zillow. Condos saw a less drastic increase from $206,950 in February 2016 to $220,000 this year; however, downtown living prices are expected to soar through the roof. Finding a downtown apartment for less than $750,000 will be unprecedented in 2025, predicts Integra Realty Resources.
The home price increases wouldn’t seem so dire if incomes were moving upward as well, but Census figures show that the average household income has been the same since 2011, remaining just below $44,000. Total home prices have jumped 59 percent since, according to the S&P CoreLogic Case-Shiller Index.
Effects on population
Although the population has seen an increase of 8.6 percent from 2010 to 2016, this growth is almost solely due to the rise in international migration, according to FIU’s analysis of the Census Bureau’s 2016 estimates. The negative domestic migration means more people are leaving Miami than entering and staying. A study by Florida International University— which looks at Miami, Fort Lauderdale and West Palm Beach— has seen a collective outflow of 106,591 residents since 2010.
The lack of affordable housing is pushing current residents to move out. And the people who would move out, Millennials just entering the workforce, cannot afford to do so, as Miami has the most Millennials living at home of any major American city.
Fort Lauderdale, although a part of FIU’s analysis of domestic migration, has become the new home of many businesses, bringing in more jobs to the area and making it a better place to live, as reported in a Miami Herald article. The area is also seeing an influx in wealthy residents looking to buy luxury homes and condos. But along with an increasing population and growing job base, Fort Lauderdale may soon see some of the housing cost problems currently associated with Miami.
“According to REALTORS, the median sales price for single family homes in Broward [county] was $302,750 in June 2015, compared to $280,000 in June 2014. For townhouses and condos, the median sales price in June this year was $135,000, up from $130,000 a year earlier,” reports the Miami Herald. “There are more than 3,000 multifamily residential units built in downtown Fort Lauderdale with more than 1,100 under construction, another 2,609 approved and more than 5,000 additional units proposed, according to research from CBRE, the world’s largest commercial real estate firm.”