THE HOUSING BUST MISSED RENTS IN SOUTH FLORIDA MIAMI – Aug. 20, 2013 – In South Florida, buying a home may be more affordable than renting one. A new study by a national housing group finds depressed real estate values have put homeownership within reach for many middle-class workers. But with a limited number of homes for sale and high demand for apartments, rents are surging and often matching or even exceeding the cost of a mortgage, according to the study by the National Housing Conference and Center for Housing Policy. “It’s much better off on the homeownership side,” said Maya Brennan, a researcher for the center. “In Miami, the negative part of the story is how expensive the rental market has become.” The data in the new report highlight familiar trends. While a collapsed real estate market ravaged South Florida’s economy, it also went a long way toward easing the chronic problem of housing affordability. But with many still leery of buying into a battered market and mortgages harder to get, landlords can increase prices and still find takers. Before the housing bust, in 2007, someone in Broward had to earn $89,000 a year to afford the $273,000 price tag for the typical home and just $42,000 a year for the $1,054 monthly rent a two-bedroom apartment, according to the Center’s report. Now, the gap is reversed – $35,000 a year to buy but $49,000 to rent. The median price for a home has plunged to $130,000, while rents have climbed to an average of $1,236. In Miami-Dade, the two options are closer in cost. A Miami-Dade worker needs to earn about $43,000 to buy a house and $45,000 to rent. In 2007, the average rent was $1,018 a month in Miami-Dade, compared to $1,122 now. But the median price for a home went from $290,000 to $160,000. In 2007, according to the Center’s estimates, a Miami-Dade resident needed to earn about $95,000 a year to purchase a home that matched the median price of $290,000. Today, with the median price closer to $160,000, someone only needs to earn about $43,000 to buy. That still leaves low-paid workers out of the market. The average retail salesperson in Miami-Dade earns about $24,000, according to the estimates, while a janitor makes $25,000. But for a schoolteacher ($51,000), police officer ($50,000) or nurse ($41,000), a home is within the affordable range. The Center said it assumed the buyer would pay 10 percent of the home’s purchase price and assume the extra expense of mortgage insurance. Insurance and taxes are figured into the yearly cost needed. Nationally, Miami-Dade finished 36th in terms of the most expensive rent among 206 metropolitan areas. Honolulu took the top spot, with monthly rent for a two-bedroom costing $1,833, and Wheeling, W.Va., finished last with a monthly rent of $615. In terms of housing affordability, Miami-Dade took the 86th slot – a full 50 rungs below its ranking on the rental list. Broward fares even worse when it comes to high rents, finishing in 24th slot. For Broward, the affordability gap is more severe. While it broke into the top 25 for rents, for purchasing a house its ranking plunges more than 100 slots to No. 138 on the list, tying with Orlando and Oklahoma City.
Posted on: Tue, 20 Aug 2013 21:43:58 +0000
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