Soaring real estate market is killing dreams of buying a home — and even squeezing renters
The dream of buying a home is fading for more people in South Florida as the hot real estate market sends prices soaring out of reach.
Just 18% of households in Palm Beach County can afford the median price of a home, according to an assessment by the Jorge M. Pérez Metropolitan Center at Florida International University. The numbers are even bleaker to the south, where about 15% of Broward County households and 9% of Miami-Dade County can afford the median home price.
The situation is not much better for renters, who are struggling to write larger monthly checks, take on roommates or search for a cheaper place to live.
“I can’t afford to live by myself because prices are going up,” said Kara Marina, a bartender at Brickyard in Boca Raton, who recently got a new roommate to help cover her rising rent. “You need to make about three or four times more than the rent to live by yourself.”
Numbers from the U.S. Bureau of Labor Statistics released in April show that the cost of housing in the Miami metro area rose another 2.7% year over year.
The rising cost of housing is preventing economic mobility — the ability for a person to move from one area to another — which limits opportunities for potential first-time homebuyers, according to Dr. Edward Murray, associate director of the Metropolitan Center at FIU.
It’s even harder for workers in the service industry — the backbone of the Florida economy — to live comfortably, Murray said. Rising prices make it difficult to move from a smaller home or apartment to a bigger one.
“These are just really excessive numbers that create a really difficult situation in terms of mobility but also in terms of quality of life and choices that people have to make as to whether they can even stay or work here,” Murray said.
A popular rule of thumb suggests a person should spend no more than 30% of after-tax income on housing. But to afford a place to live in South Florida, most households are having to spend more than that.
“South Florida is one of the most cost-burdened areas in the country,” said Ebonni Crispin, legislative affairs and community engagement manger with the AHF in Fort Lauderdale. “Market prices increase at such a high level that what people are making is not keeping up with rent. Buying a home is a far off notion.”
Many people are opting to get roommates to make ends meet. Marina said she plans on renting for another year with her current roommate before moving out and finding somewhere cheaper. She expects her current rent to be increased by $200-300 a month.
“In the service industry I can make an hourly wage that goes up to $30 an hour, but even getting that, I still have other bills besides housing to pay for,” she said.
More affordable housing is being built around South Florida, including recently unveiled affordable townhomes in Pleasant City and some units in apartment buildings like Ponciana Crossing in Fort Lauderdale and Marquis Apartments in Pompano Beach. But there simply isn’t enough in place to keep up with the demand for it and the units being lost due to prices rising in the market.
“Everything falls into the same situation, we don’t have enough units,” said State Sen. Nan Rich of District 1 in Broward County.
For years, the counties have been losing affordable units, but the current boom in the housing market is making affordable units on the market to disappear faster. Palm Beach County is losing 7.5% of affordable homes and 8.5% of affordable rental properties each year, with projections estimating that the numbers will increase even more in the next few years as the housing market explodes, according to Murray. Broward County and Miami Dade are facing a similar crisis, Miami Dade losing about 17,339 total units each year, and Broward County falling in a similar range.
“I see it all. People are having to move in with relatives or move in with roommates,” said Suzanne Cabrera, president of the Housing Leadership Council of Palm Beach County. “We want people like teachers and retail workers to be able to afford to live here.”
Some people have been able to find a home in South Florida , but end up having to stretch their budget to make it work.
Lindsay and Daniel Benjamin managed to find a home in Cooper City after a year of searching and increasing their budget. They started looking before the pandemic hit, only to watch prices soar out of their range.
To make their new home purchase work, they had to rework their budget. They budgeted 40-45% of their income to their home, forcing them to cut back on certain areas of their life.
“It’s been more eating at home and trying to save money for the just-in-case,” Daniel said.