Lack of home affordability hurts Florida competitiveness
Lot's of readers of this blog have flagged home affordability as an important ingredient of the housing slump. Here's new proof. It's a snippet about housing from a report released Tuesday by the Florida Chamber Foundation, a business research group:
Median home prices have surged 60 percent statewide since 2003, with even larger increases in key markets such as Miami. The median home now costs 6.4 times the average annual salary in the State, compared to a 4.6 ratio in 2003. Housing in Florida is now less affordable than it is nationally and increasingly out of reach for essential services workers and other middle-income earners in the State.
(Un)Real Estate offers a peek at the housing market usually reserved for insiders. While it focuses on the Tampa Bay area, it won't neglect dipping
into the rest of Florida and beyond. Its goal? Simple: To help you keep a roof over your head without losing your shirt.
Median home prices have surged 60 percent statewide since 2003, with even larger increases in key markets such as Miami.
The above information is exactly why I have been stating that home prices that have had this surge of 60 plus percent will fall 50-60% in the Tampa Bay area. It all comes down to one word and that is affordability. All one needs to do is look at the income levels in the Tampa Bay area and you can easily determine that a major correction was due.
Unfortunately, the realtors associations do not want the public to know this information. Now is not a good time to buy unless you are interested in losing money!
Posted by: Fuzzy bear | December 06, 2007 at 12:56 PM
I might also add the the norm is 3 times annual income. Based on that information, housing prices would need to fall back to 2000 levels based on where it was in 2003 at 4.6.
Add in the economic slowdown, forclosures in any subdivision and the downward presure could force prices in some areas to 1998 levels.
Posted by: Fuzzy Bear | December 06, 2007 at 01:16 PM