Homeowners saw their homes make more money than the typical salary in Florida, a new report from Zillow shows.
Home values in South Florida on average grew by $72,000 in the course of a year, a larger amount than what the typical salary is in the area, according to the report.
“In most areas, the typical home made more money in appreciation than the typical worker made in that area,” said Nicole Bachaud, economist with Zillow. “It’s another way of looking at how crazy home values have risen.”
Though it’s a nice stat for homeowners, it could mean that it’s even more difficult for potential buyers to be able to attain homeownership. Higher home prices mean a higher down payments, which is increasingly difficult in a market where rents are soaring, making it harder for renters to save.
“For a lot of potential buyers, the realities of homeownership are slipping further away as the prices for homes rise, especially as interest rates rise,” she added. “The affordability calculations for households is shifting and it’s becoming unrealistic for people to afford to buy homes.”
Renting in South Florida isn’t necessarily a great option. Rents in the region increased more than any other metro area studied, with the typical lease increasing by $7,104 over the course of a year.
“We are probably going to see more demand in the rental market because they either can’t afford to buy or there aren’t enough housing units,” Bachaud said. “We will probably see a lot of pressure on renters because rents are so high that it’s going to make it even harder to save.”
The Zillow report looked at how much home values grew between December 2020 and December 2021 in 38 metropolitan areas in the country by evaluating the median or typical home value growth in the area.
In most cases, as in South Florida, homes value rose more in a year than what the average worker makes in a year. The median pre-tax income in South Florida was $40,000, meaning homes made about $30,000 more during that time frame than the median salary for a worker in the area.
“People’s homes were really working for them,” Bachuad said.
Overall, housing costs have increased at a faster rate than salaries in our area. Wages increased by 6% over the past year in the South Florida area, according to statistics from the U.S. Bureau of Labor, while housing values have increased by at least 30%.
But many homeowners who saw their equity grow over the past year haven’t been able to take advantage of it, as the current housing market makes it difficult for them to find a new home, as prices are astronomically high and there’s a severe lack of inventory.
There’s been a growing affordability crisis in South Florida as the housing market takes off. Few homes are available to many homebuyers. Out of all homes available in region, only 22% are affordable to households in the $50,000-$74,999 income bracket, according to an affordability report released by the National Association of Realtors.
Miami emerged as the most unaffordable housing market in the country. And recently, the city announced a housing emergency due to rising prices and lack of affordable units.
South Florida fell in the middle in terms of overall home growth value out of the 38 metro areas evaluated in the country. Regions such as Los Angeles saw home values grow by $131,979 and the San Jose metro area had home values increase by $229,277.
