The prices of homes in the southern part of Florida have been steadily rising in the second quarter of the year.
According to a news release by the National Association of Realtors, houses in Miami-Dade, Broward, and Palm Beach counties have a median price of $289,900. This is a 7.4 percent rise compared to the median price of the second quarter of last year. Condominiums in South Florida also experienced price hikes and had a median sales price of $156,000. This is greater by 7.1 percent compared to last year's.
The rise in median prices of houses and condominiums may be good news for the real estate agents, but it means a bad deal for those who are first-timers when it comes to purchasing homes. This is especially because South Florida's per capita income growth is only at 2.1 percent.
The report also states that homeowners with an annual median income of $49,121 in the Miami-Fort Lauderdale-West Palm Beach corridor would pay 42.2 percent of their wages every year for a 30-year mortgage, opposing to the 40.1 percent deduction in annual income for renting.
The demand for affordable homes in South Florida is on the rise but the supply is not that high. Developers are more inclined in building condominiums rather than single homes.
According to David Guarino, a real estate analyst who covers Florida for John Burns Real Estate, the price growth of Florida homes are due to the lack of single affordable housing.
"There's more demand but the supply is historically tight, so we're seeing an imbalance," Guarino said.
Alayne Unterberger, a researcher on social and economic policy at Florida International University, said that the supply of expensive housing units is greater than the supply of single affordable homes.
"In South Florida, we face the challenge of being able to attract very wealthy people - both from the U.S. and abroad - who can pay these high rates for housing," Unterberger said. "That's who our market is geared for and so the housing that is being built is not affordable," concluded Unterberger.
With the steady price hike, South Florida is now on the list of the least affordable housing markets in the country.
