Despite every headline-grabbing attempt to fuel the tech sector or the finance market, at its condo-flipping heart Miami is still a company town, and the only industry that keeps the lights on is real estate. So any national survey that ranks the Magic City nearly dead last for its property-selling prospects is very bad news for anyone in South Florida.
That's just what WalletHub found in a report released today that analyzed hundreds of cities large and small to rank America's best and worst real-estate markets. Miami comes in third-to-last among big cities — and 286th overall — while Miami Beach ranks 297th of 300 among small cities.
It's the latest ominous sign in an area where the real-estate pendulum inevitably swings from buzzing high to awful catastrophe, coming just a week after another analysis shows the luxury condo market wildly overbuilt.
WalletHub's ranking is based on 21 metrics that looked at both the strength of the local real-estate market — in terms of everything from home value forecasts to the average number of days until a house is sold — and the city's affordability and economic outlook. Combined, the data is meant to give a snapshot of how likely actual residents are to be able to afford and keep a house and whether that investment will be worth the trouble.
On both sides of that equation, most cities in Miami-Dade ranked abominably.
Though the city of Miami came in 57th place for population growth and 70th for job growth rate, the disparity between wages and staggeringly expenses houses and condos dragged the city down. Miami came in 279th for the number of unsold homes owned by banks, 273rd for the average number of days before a sale, and 262nd for the average price of a home as a percentage of income.
The city also ranked poorly for foreclosure rates and the number of delinquent mortgages. Among cities with populations over 300,000, only Cleveland and Detroit ranked worse than Miami.
Miami Beach was similarly bad among small cities, trailing only two towns in New Jersey — Elizabeth and Patterson — in WalletHub's analysis.
The root problems, of course, are annoyingly familiar to anyone who has rented or purchased property in South Florida. Politicians encourage developers to build increasingly absurd luxury towers that are marketed to foreign barons who flood the property market with cash, raising the costs area-wide and pricing out average residents.
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"Foreign buyers are driving up demand for premium and vacation houses," says Matthew Hurst, an assistant professor of finance at Florida's Stetson University, who was surveyed by WalletHub in the report. "European and South American buyers seem to be buying in Florida, Texas, Arizona, and California."
Adds Matthew Kahn, an economics professor at the University of Southern California: "The New York City, Miami, Los Angeles, and San Francisco markets are all inflated due to international buyer demand."
Meanwhile, wages are stagnant in a city where most work is in the service sector, meaning huge swaths of the population can't even dream of owning a place — and struggle mightily to find affordable housing to rent.
Until Miami finds a way to encourage developers to build reasonably priced homes for the average resident — and to flip the local economy away from the eternal seesaw of property speculation — expect Miami-Dade to continue plummeting down rankings like this one.