When you think of cities with high real estate prices, you likely think of New York City, San Francisco, and LA. However, Miami actually took the place of LA in the list of the least affordable housing markets in the country.
What this means is that when you compare the median income of residents to the median sales price of homes, the disparity is large. Basically, you might still be able to buy a nicer, bigger house in Miami for less money than you can in San Francisco, but the median income in San Francisco is higher which lessens the disparity.
Are you interested in learning about the Miami housing market?
Let's take a look at what you need to know.
Miami Housing and Cost of Living: The Basics
Miami is located in Miami-Dade County and is a coastal metropolis. The city itself has a population of 442,241 people and is the cultural and financial core of the Miami metro area.
The metropolitan area of Miami is the seventh-largest in the entire country. It is the 72nd largest metro area in the world. There are three counties included in the metro area, which are Miami-Dade, Broward, and Palm Beach.
According to the cost of living data, the city of Miami is has a higher cost of living than the state of Florida, which has a slightly higher cost of living than the US on average.
When you look at the breakdown of why Miami is more expensive than other parts of Florida and the country, a few notable categories stand out. The cost of utilities and healthcare are actually less expensive than the national average. However, housing and transportation are notably more expensive than in other parts of the state and of the country.
The average cost of rent in Miami for a one-bedroom apartment is $1343. This is higher than the average cost in the metro area, which comes in at $1249. The average cost to rent a one-bedroom apartment in the United States, on the other hand, is $1048.
Is it time for you to make the move to Miami? If you're dreaming of living a life of luxury in South Florida, check out these homes for sale.
The Miami Real Estate Market Is the Second Least Affordable Housing Market in the U.S.
The pandemic pretty much shook up every aspect of daily life and the economy. The housing market was no exception. Since the start of the COVID-19 pandemic in early 2020, tech companies and snowbirds alike started heading to south Florida. The result has been an unprecedented real estate boom.
A report by RealtyHop based on the October 2021 Housing Affordability Index found that Miami is now the second least affordable housing market in the entire United States. This means that Miami has displaced Los Angeles to take the second-place spot.
Miami had previously ranked number three based on their September 2021 report. Now, Miami is second only to New York City, which has had a longstanding reputation as the country's most expensive housing market. In NYC, the median home price is $958,000 while the median household income is $63,998.
For Miami, there is a similar disparity between the median household income of the city and the median home price. The form is about $39,049, while the latter currently sits at $549,000.
This means that each Miami household should expect to pay $2,653 a month towards the cost of homeownership. This amounts to more than 81% of median income.
News also broke in May of 2021 that the sales prices for homes in Miami had reached a record high. Coming in at $515,000, single-family homes were more expensive than ever before. According to some experts, the influx of residents was tech newcomers and Latin American buyers.
Miami-Dade County Housing Market Trends
Miami-Dade is the seventh most populous county in the entire United States with more than 2.7 million people in 2019. According to the latest statistics from the MIAMI Association of Realtors, the median percent of the original list price is up 4% from last year.
One of the things that are impacting sales prices is the lack of inventory at certain price points. This is particularly true when it comes to single-family homes. There is hope that the lack of supply will be somewhat alleviated as more sellers start listing their properties.
Year-over-year, the cost of a single-family house in Miami-Dade County increased 28.7% in June 2021. This increase was from #388,500 to $500,000. For 111 consecutive months, the cost of Miami single-family homes rose.
The cost of existing condos increased 17.6% year-over-year, with condo prices staying even or rising in 113 of the previous 117 months.
Broward County Real Estate Market Trends
Broward County is also a seller's market due in part to a lack of inventory at certain price points. This is particularly true for single-family homes.
The price of single-family homes increased in the county by 27.7% year-over-year. This is an increase from $390,000 to $498,203. The price of existing condos also rose year-over-year at a rate of 11.3%.
Palm-Beach County Real Estate Market Trends
Directly north of Miami-Dade County and Broward County, Miami-Dade County is listed as the 18th richest place to live according to Bloomberg. The population of this county is nearly 1.5 million, which means that it's the third most populous county in Florida.
There has been pent-up demand in this county similar to Miami-Dade and Broward. This means that there is a seller's market currently. The price of single-family homes increased by nearly 33% year-over-year as of June 2021.
Why Are So Many People Moving to Miami?
There have been a number of new residents in Miami in recent years who come from various states around the country. One of the reasons is because high tax cities have become even more expensive since the senate passed the tax bill. One of the few states that doesn't tax its residents' income is Florida.
For this reason, Miami has been seeing new residents coming from high-tax cities like New York, Chicago, and cities in California. Many of the people moving to Florida have high net worths. It can help people save a ton of money in taxes when they make the move to Miami.
There are a number of other advantages to living in Miami other than the tax benefits, though. Here are three reasons why Miami has become a popular destination.
Miami is a world-class city. Here you can find nightlife, restaurants, great schools, and so much more. The weather is also beautiful throughout the whole year, which can feel like moving to paradise for people moving from up north.
Miami is also the host of hundreds of global and regional business headquarters. This means that there are a lot of economic opportunities in Miami in addition to recreational opportunities.
Miami Real Estate
There has been an influx of extremely luxurious developments in Miami in recent years. There are also countless waterfront homes, gated communities, and accessible condos. While the cost of housing in Miami might be going up, many people feel that the price is worth paying for what you get.
Miami is a city that has something for just about everyone. Whether you're raising a family, a retiree, or a young professional, everyone can feel right at home in this vibrant city.
How Does Miami Real Estate Compare to Other U.S. Cities?
According to Zillow, the typical home value of properties in Miami is $423,793. To find this number, Zillow only uses the middle tier of homes. When you look at the same data for San Francisco, the typical home costs a little over $1.5 million.
In New York City, the price is also quite steep. Zillow lists the typical home value at $722,787. In Los Angeles, this number is $902,989.
Other very expensive cities to buy property in include San Jose, CA, Ventura, CA, San Diego, Honolulu, and Seattle. When you consider that these are also fairly high-tax cities, it's no wonder so many high-income individuals are moving to Miami.
Miami Housing: Is It Time For You to Live a Life on the Beach?
As you can see, the cost of housing in Miami has definitely gone up. However, that doesn't necessarily mean that you're priced out of Miami if you're thinking about living there. When compared to other expensive U.S. cities, you can definitely find a nice piece of property that will suit you and your family for less.
Did you find this article about Miami housing prices interesting? If so, be sure to check out the rest of our blog for more fascinating content!
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