Miami’s housing market has been one of the hottest since the start of the pandemic, as buyers from around the country have descended on the city for added space and warm weather in the WFH world.
Strong demand for condos and single-family homes and dwindling supply pushed prices higher, and now Miami has overtaken Los Angeles as the second most expensive housing market in the U.S., according to the latest report from RealtyHop.
A household in Miami should expect to pay $2,653 a month toward homeownership costs, or roughly 81.6 percent of median income, according to the October index. The monthly report analyzes homeownership affordability across the country’s 100 most populous cities.
New York City is still the least affordable large metro in the nation. The average household in New York has to spend 82.2 percent of their income on homeownership costs.
But Miami overtook L.A., which ranked second in the September report. RealtyHop’s latest data show the city’s homeownership burden was 81.2 percent, slight dip from the month before.
In the new index, many of the country’s most expensive cities saw minor improvements in their affordability scores, with the white-hot real estate market showing recent signs of cooling amid high labor and materials costs. But to date the slight downturn in some of the nation’s highest priced markets only amounts to a blip.
“Generally speaking, we’re not in a buyer’s market yet,” said RealtyHop’s Shane Lee.
To come up with its rankings, RealtyHop compares a city’s median household income figures to median home listing prices, which the site calculates from its own database. It also factors in local property taxes.
In the October index, New York’s median home listing was $958,000, and its median household income was $64,000. Compared to a month earlier, the listing price actually dropped by $9,000.
In Miami, the median home listing was $549,000 and the household median income was $39,000. The Magic City also saw a tiny improvement in its affordability score.
Still, it narrowly overtook L.A., where the median home listing price was $915,000 — median income was $62,000 — compared to $930,000 the month before.
Newark, New Jersey, and Long Beach, California, rounded out the top five of most expensive housing markets in October.
San Francisco ranked sixth: The notoriously unaffordable tech hub registered a median home listing price of $1.3 million, the nation’s highest; but also a very high median household income of over $112,000.
Chicago ranked 41st on the list. A family with a household income of $58,000 would have to set aside 37.4 percent toward owning a home.
Other places like Hialeah, Florida (No. 7), Jersey City, New Jersey (No. 10) and Riverside, California (No. 19) have all become less affordable because of their proximity to larger, more expensive neighboring cities, Lee said.
“Covid in some ways pushed for that, too,” she said, “because remote working is now possible.”
RealtyHop’s October report marked the fourth straight month that New York took the top spot, while California accounted for 12 of the country’s 20 most expensive housing markets. The state’s newly emboldened governor, Gavin Newsom, recently signed controversial legislation aimed at improving density and curbing its dire affordable housing crisis. Despite the move, many analysts, including Lee, say it won’t have a meaningful impact.
“It definitely would be hard [to change], unless you see a lot of new construction or developments hitting the market, which always takes more than a year or two,” she said. “So I think for the foreseeable future Los Angeles, for instance, will still be unaffordable.”
What’s the most affordable housing market in the nation? That would be Wichita, Kansas, where a family making $52,620 can expect to set aside just 17 percent of their annual income toward owning a home.