Only about 8% of households in Broward County, Florida can afford a single-family home at the median sale price, according to a new study.
Based on spending the recommended 30% of income on housing, a home at the median sale price for Broward County, around $545,000, is far out of reach for almost all residents in South Florida, according to a preliminary assessment from researchers at Florida International University. Experts involved are concerned about the effects on the regions economy, particularly for workers in the hospitality and service sectors.
“It’s just become so excessive, really, it’s almost paralyzed the housing market for anyone who actually lives and and works in Broward County,” said Dr. Edward Murray, associate director of the Metropolitan Center at Florida International University and author of the study. “Local residents have been completely removed from the market, certainly from a purchasing standpoint.”
Broward’s median sale price is almost nine times the median salary in South Florida, according to Murray. In a normal market, the ratio should be 3:1.
The median salary for owner households in South Florida is $74,405. Spending 30% of their income would allow them to afford a home that costs around $223,215, less than half the median sale price of a home in Broward County.
—A salary of $60,922 can afford a home priced around $182,766
—A salary of $90,030 can afford a home priced around $270,090
—A salary of over $180,000 could afford a home around $545,000
According to one of the critical findings of the paper, the gap between income and housing prices could damage the larger regional economy. ”Broward County’s economic competitiveness, resilience and quality of life are at risk – [with] impacts on Leisure & Hospitality, Healthcare, and Retail sectors reliant on service sector workers along with major institutions – hospitals, public schools, colleges, and universities.”
To afford a single-family home at the median sale price, the average household combined income would need to be close to $200,000 annually. Salaries for service industry and hospitality workers often don’t match that, according to numbers from the U.S. Bureau of Labor Statistics.
—Retail sales person: $30,410
—High school teacher: $69,140
—Registered nurse: $74,220
The study suggests that these workers, who service the community, will struggle to afford housing. South Florida is entering unchartered territory when it comes to the housing market, said Murray. Not only are housing prices out of reach for many people, but it’s also becoming nearly impossible for renters to afford to be able to live here. Before the housing market took off in 2021, the biggest question renters faced was how cost burdened they would be in order to pay rent.
Now, he says, “The question is whether you can afford to live in South Florida at all based on the rents,” Murray said. “It’s so excessive you have to question how sustainable the housing market is relative to the economy.”©2022 South Florida Sun Sentinel. Visit at sun-sentinel.com. Distributed by Tribune Content Agency, LLC.