Despite a sales slow-down, home prices continue to outpace wage growth in Miami
Has the pandemic lessened the disparity between housing prices and wage growth in Miami?
Condo and single-family home prices continue to outpace wage growth in Miami-Dade, according to the second quarter 2020 U.S. Home Affordability report by the Irvine-based data company ATTOM Data.
The report studied the median price for a condo and single-family home from publicly recorded sales data compared to the average salary for 406 counties based on the U.S. Bureau of Labor Statistics. It found that 269 counties, or one-third of those in the report, had higher sales prices than what the average earner in the area could afford.
“The U.S. housing market seems to be shrugging off the pandemic’s economic impact. Sales volume is way down, but prices are not. At the same time, wages and mortgage rate trends are helping to negate those increases,” Todd Teta, ATTOM’s chief product officer, said in an email. “The key to determining who will be most impacted in the coming months will bear a close watch on how much the economy rebounds and how that affects local wages, mortgage rates and taxes”
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The median sales price in Miami-Dade was $320,000 during the second quarter 2020, an 8% increase from $294,400 in the second quarter 2019. The annual wage was $56,641 in 2019, up 4% from 2018.
“This pattern of home prices increasing more than wages results in home affordability levels remaining unaffordable in Miami-Dade,” Teta said. “A key benchmark of affordability that lenders apply when deciding whether to give a buyer a mortgage is based on home ownership expenses consuming no more than 28% of the average local paycheck. In Miami-Dade County that figure is nearly double, at 40.8%.”
Miami-Dade was one of the five largest counties in which home price appreciation exceeds wage growth. The others include Cook (IL), Maricopa (AZ), Dallas (TX), and Riverside (CA).
Median housing prices continue to increase in South Florida year-over-year despite the number of sales dipping during the pandemic. The lack of wage growth combined with other elements — including local professionals competing with offers from overseas buyers — are making it difficult for locals to afford buying a home in the county.
Officials from the city of Miami, Miami-Dade County and local experts continue to discuss solutions, all expressing concern about the negative long-term impact of the lack of affordable housing.
This story was originally published June 25, 2020 at 7:00 AM.
