Good news! Wages are finally rising in Miami-Dade County, a major metro area where the median income is a paltry $46,000, which is much lower than that of other cities of comparable size, such as Boston, Philadelphia, and Seattle.
Whoops, we forgot to mention one thing, though: Miami-area housing prices are rising way faster than those wages.
That's according to a new analysis released last week from Attom Data Solutions, which found that wages grew 2 percent over the past 12 months in Miami-Dade. That would be great if not for the fact that housing prices also jumped 9 percent over that same time. This is bad news for regular Miamians who have read headlines about rising wages in Dade County with a small glimmer of hope that the city might become more affordable.
"As most buyers budget based on monthly payments, the median buyer is now able to bid significantly less than before,” Tendayi Kapfidze, chief economist at mortgage marketplace LendingTree, said as part of Attom's news release today. “This means at each price point the number of buyers is falling, reducing demand."
Miami is not entirely unique here: Attom studied 440 counties, and home prices are rising faster than wages in 378 of them. That's 86 percent.
Attom also found that in 84 percent of local markets including Miami-Dade, the "average" buyer simply can't afford to purchase a home. Analysts warn that in Dade County, mortgage costs will suck up 45.6 percent of a person's yearly income. In real-estate circles, families that spend more than 30 percent of their income per year on housing are considered to be "burdened." (Brooklyn, however, far outpaces Miami-Dade in this regard: The median Brooklyn earner needs to use 134 percent of his or her income to cover a mortgage.)
Overall, Attom says this is the least affordable that America's housing market has been in ten years.
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Miamians really don't need to be reminded of how poorly the local housing market is designed. Dade County has long had
In the meantime, Miami-area cities have approved a truly ludicrous number of luxury high-rises while neglecting to build any semblance of low-income or workforce-level housing. Part of the blame here goes to the Florida Legislature, which has both banned local municipalities from setting their own minimum wages and misspent more than $1 billion in affordable-housing funds over the past decade.
As a result, Miami continues to be named the worst city in America to rent an apartment. Attom's researchers, at least, believe these incongruous housing-price spikes are unsustainable and will come back down to earth sometime soon — but that needs to be seen to be believed.
"This has had immediate effects on the number of houses sold and will over time reduce the pace of home price increases," Kapfidze said as part of the study. "This is not cause for alarm, however. Home prices have been outpacing incomes since 2012 at a pace that is unsustainable, and a period of consolidation is healthy for the housing market.”