By Deborah Goonan, Independent American Communities Blog
Two recent reports in the Miami Herald highlight the fact that south Florida (inlcuding Broward County, Miami-Dade County, Monroe County, and Palm Beach County) is the third most expensive housing market in the US, after San Francisco and Los Angeles.
Some highlights of the articles referenced below:
On the real estate market for buyers:
- Median Single Family home price in Miami-Dade: $278,000
- Median Condo/Townhouse price in Miami-Dade: $195,000
- 3,000 homes are currently listed for $1M or more, up to $10M
- Foreign investors are buying luxury condos and mansions, but do not live in FL
- More than half of buyers pay cash, down from 65% cash sales in 2012
- Home prices are up 44% since 2012
- There is a shortage of homes under $400,000
- Most homes under $300,000 tend to be in high crime locations with poorly rated schools and/or long commutes for work
- Middle class and work force residents cannot afford to buy a home, and are being forced to move out of the area
- CoreLogic calls South FL one of the most overvalued and least sustainable real estate markets in the country
On matters of affordable rental housing:
- 40% of households in Miami devote at least half of their income to housing
- The Mayor of Miami has recently proposed redevelopment of crime-ridden public housing at Liberty Square, originally built in the 1930s
- New development is intended to be mixed income, to avoid concentrated areas of poverty
- Some private developers are not enthusiastic about investing in mixed income housing
A closer look at Florida
Community Associations Institute (CAI) estimates there are 47,100 Association-Governed Residential Communities in Florida, serving 9.3 million residents. A recent US Census report estimated population of FL at 19.9 million. Doing the math, that means roughly 47% of Floridians live in a homeowner, condominium, or cooperative association. That’s far and away the highest concentration of Association-Governed homeownership in the nation. (The next closest contender is Vermont, with 38% of its population residing in some sort of HOA)
CAI repeatedly makes the claim that “Community Associations” – as they refer to them – expand affordable homeownership. If that were truly the case, Florida should be the most affordable state for housing in the nation, and ought to be the state with the highest homeownership rate, right? But the homeownership rate in the Sunshine State for the second quarter of 2015 was 64.6%, slightly below the homeownership rate for the southern region of the US – 64.9%.
Looking at the big picture – Historical homeownership rates
Taking a look at homeownership rates in FL over the past 5 years, figures for second quarter are as follows, showing a steady decline:
- 2010: 69.8%
- 2011: 68.9%
- 2012: 67.6%
- 2013: 66.0%
- 2014: 65.3%
- 2015: 64.6%
Homeownership in FL dropped 5.2 points, a decrease of 7.45% over the last 5 years.
Now let’s look at homeownership rates in the US overall for the past 5 years, also using data from the second quarter. These figures reveal a decline in homeownership, but less pronounced:
- 2010: 66.9%
- 2011: 65.9%
- 2012: 65.5%
- 2013: 65.0%
- 2014: 64.7%
- 2015: 63.4%
Homeownership in the US dropped by 3.5 points, a decrease of 5.23% over the last 5 years.
Conclusion: Florida’s homeownership rate and affordability are significantly lower than the national average.
The data seems to indicate that a real estate market saturated with Association-Governed Residential Communities / Common Interest Communities does not necessarily create a more affordable housing environment or a higher rate of homeownership.