Can You Afford a House In Florida? Here’s Why Moving South May Be Out of Reach

Modern Mediterranean architecture style home in the historic City of Coral Gables located in Miami.
RAUL RODRIGUEZ / Getty Images/iStockphoto

Florida is one of the most expensive states for housing, and Miami is the least affordable city in the country, according to a report. High demand, short supply, increased migration trends since the pandemic and exploding mortgage rates, make for a pricey combination. 

See: 7 Florida Cities That Could Be Headed for a Housing Crisis
Find: States Whose Economies Are Failing vs. States Whose Economies Are Thriving

According to Zillow, a typical Florida home is valued at $406,426, a whopping 22.4% annual increase. To put this in context, the national average home value is $357,544, a 12.3% annual increase.

The state has also been a magnet for people who wanted to relocate since the start of the pandemic. And Florida’s population increased by 1.9% to 22,244,823 between 2021 and 2022, making it the fastest-growing state and surpassing Idaho, the previous year’s fastest-growing state, new data from the Census Bureau shows.

The reasons that make the state attractive are legion, year-round agreeable weather, endless beaches, and let’s not forget: no state income tax. In comparison, New York, for example, has a 10.9% state income tax, California has a 13.3% tax, Oregon has a 9.9% tax and Georgia has a 5.75% tax, according to the Tax Foundation.

Building Wealth

In turn, this translates to Miami being the least affordable housing market in the country, according to RealtyHop. This month, the median asking price increased 0.50% to $598,000 from $595,000. RealtyHop added that a family making an average household income of $44,581 must now direct a substantial 85.67% of their paycheck toward housing costs.

The affordability crisis in the state means that prices for single-family homes and condos in Miami-Dade County and Broward County increased between 9% and 14% in November compared to the same month in 2021, according to the Miami Herald, citing data from the Miami Association of Realtors.

Ken Johnson, Florida Atlantic University finance professor, told the Miami Herald that the low inventory continues to be an issue in Miami’s housing market. One solution, he added, would be to turn empty homes into longer-term rental properties rather than Airbnbs.

“We have a huge number of Airbnbs that have taken long-term rentals off the market and made them available for short-term rentals,” he told the Miami Herald. “A lot of those are switching back to long-term rentals because rents are so high.”

Building Wealth

There is some good news for 2023 however, for Americans who went to head south. Inventory has started to pick up in the last part of the year, which could translate into lower prices.

Learn: 5 Best Southern Cities To Retire on a Budget of $1,500 a Month
Discover: What Is the Average Social Security Benefit at 65?

“Rising inventory means more options and less bidding wars for Broward County homebuyers in our high-demand, low-supply market,” Broward-MIAMI President David Dweck said in a press release. “Like all South Florida, Broward County has seen a surge of buyers from high-tax, high-density states. Sales are down year-over-year in comparison to a record-breaking 2021 but remain close to pre-pandemic totals despite high mortgage rates.”

More From GOBankingRates

Share This Article:

facebook sharing button
twitter sharing button
linkedin sharing button
email sharing button
Building Wealth

About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
Learn More

BEFORE YOU GO

See Today's Best
Banking Offers

1pximage