An analysis of prices in Miami-Dade County year-to-date reveals that 58 percent of residential properties are selling for less than $250,000 despite rising prices, according to the 30,000-member Miami Association of Realtors.
While record real estate sales activity in Miami-Dade has fueled double-digit price increases for nearly three years, median sale prices are what they were in 2003. The price growth that began in 2011 is relative to the bottom of the market, which means prices remain low compared to their peak in 2007. The current median sale prices for homes in Miami-Dade are what they were in 2003. Compared to the peak in 2007, prices for single-family homes and condominiums are respectively 36 and 29 percent lower.
Considering the endless amenities Miami offers and its world-class status, this level of affordability is remarkable.
The National Association of Realtors latest “Affordability Index of Existing Single-Family Homes for Metropolitan Areas” shows Miami remains very competitive in terms of affordability. Based on the relationship between median home price, median family income and average mortgage interest rate, a composite index of 100 is defined as the point where a median-income family household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent downpayment and 25 percent of gross income devoted to mortgage principal and interest payments.
Miami’s index was 120 for all of 2013, following three years of robust market performance. This means in Miami a median-income family household has 120 percent of the income necessary to qualify for a conventional loan, more than enough to purchase a median-priced home.
In contrast, the index for other major metro areas was: Anaheim-Santa Ana-Irvine, CA (67.8), San Diego (80.9), Los Angeles-Long Beach-Santa Ana, CA (79.9), New York-Wayne-White Plains, NY-NJ (73.8), and San Francisco (72.6) – compared to Miami (120).