The Floridian city surpassed Los Angeles in the cost of housing and only New York is less affordable.
During the coronavirus pandemic, Miami has become the second most expensive city in the United States for housing relative to people’s income. This is indicated by an analysis of the real estate market published by the real estate company Realtyhop in January of this year.
Only New York beats Miami among all cities in the country. Los Angeles, the movie mecca and home to fabulous entertainment fortunes, trails the Floridian city in third place nationally.
A 2019 study by the financial website GoBankingRates found that Miami was the most expensive city in the nation for the ratio of income to housing cost that year, but New York and Los Angeles later surpassed it. Now, it looks like Miami is threatening to take the top spot again.
Miamians living in rental apartments are very concerned about skyrocketing home prices. According to a BBC study , between February 2021 and January 2022, the rent for a one-bedroom apartment rose from about $2,400 a month to about $2,800. Two-bedrooms rose from about $2,500 a month to about $3,600.
The figures are unaffordable for many workers in Miami, who are forced to rent rooms in houses (known as efficiencies ), cramped studios for which they must pay $900 or $1,000 a month, and even more.
By way of comparison, according to an analysis by the rental company, a specialist in rental flats in Spain, the average rental price in Madrid in January this year was 1,688 euros (1,908 dollars), well below the average price in Miami. Incredible.
Those who want to buy a home in Miami, instead of renting, do not have it easy either. The average price of houses in the Floridian city is 490,000 dollars. The American dream of having your own residence has become a nightmare in Miami.
A COVETED DESTINATION
The causes of this stratospheric increase in residential prices in Miami –and in general throughout South Florida– are due to several reasons. The main one is the demand: Miami is a destination coveted by many individuals from North American states where taxes are higher, such as New York, New Jersey and California, and also by many foreign buyers, especially wealthy Latin Americans who invest millions of dollars in the acquisition of luxury condominiums by the sea.
The restrictions due to the pandemic, in addition to the possibility of working from home, caused people to value more having a home where confinement was more bearable. In that sense, South Florida offers more advantages than other American cities with a less pleasant climate.
Also, in Florida landlords can charge whatever rent they want, because there are no laws that limit price gouging.
But if the rich find a paradise in Miami, its residents face the fear that they will not be able to continue living in the city. According to Realtyhop, a family with a median income — about $51,000 a year — should spend nearly 80 percent of that income on housing costs. The equation is impossible. Many Miamians are going to have to flee or live on the brink of ruin.