The surge of transplants to Florida since the pandemic has caused prices to skyrocket, sapping the Sunshine State of its main draw: affordability.
According to RealtyHop Housing’s May affordability index — which compares homeownership costs relative to income — Miami is now the least affordable housing market in the country.
The median price for a home in Florida’s biggest city is $585,000. To be able to afford this, homeowners can expect to spend as much as 79.9% of their monthly income on homeownership expenses, according to RealtyHop.
That tops the amount paid by homeowners in Los Angeles (77.5%), Newark, NJ (72.4), and New York City (70.6%), the data shows.
Coming in at No. 5 on the list was another Florida city, Hialeah — located about 12 miles northwest of Miami — where the average price for a home in May was $824,444 in May — an increase from the $799,999 median cost the month prior.
The monthly mortgage payment Hialeah, Fla., also jumped 1.58% from April, to $2,324, or 65.79% of homeowners’ annual household income, the report found.
“The fact that Florida is getting more expensive is making it less attractive to homebuyers,” Daryl Fairweather, the chief economist for Redfin Corp., told Bloomberg.
While the price of single-family homes in Florida flattened this year for the first time since 2011, the 50% growth over the past three years has priced out locals.
The rate at which people moving into the state has also dropped off as mortgage rates and insurance premiums soar.
RealtyHop’s report also warned that Orlando could become less affordable after the city jumped seven spots higher in the u-affordability ranking to No. 35.
“Spring prompted more activity in Orlando’s housing market this month, [and a] higher demand from buyers pushes asking prices higher, even with more inventor,” the report said.
St. Petersburg (34th) and Tampa (36th) also were on the list.
The number of people migrating to the Sunshine State has dropped the past three years.
In 2021, 62% more people moved into Florida than out, according to data from United Van Lines.
In 2022, that figure dipped to 58% and so far in 2023, it sits at 56%.
These days, the residents that seem to benefit the most from Florida’s cost of living and lack of a state income tax are high-earning New York City residents.
Financial information provider SmartAsset analyzed how much people raking in six figures in cities like New York, San Francisco and Chicago would save if they packed their bags for Florida’s biggest city.
A Manhattan resident with a $650,000 salary would save $195,000 thanks to Miami’s cheaper taxes and living expenses.
Workers with a $650,000 salary in New York face an effective tax rate of 45% in New York — when you factor federal, state and local taxes — which drops to 35% as Miami resident.
The same Manhattanite making $150,000 could save nearly $50,000 by decamping to Miami, according to the study.
A New Yorker’s cost of living would also be reduced tremendously if they moved out of Manhattan — where the average overhead is 137.6% above the national average.
In Miami, meanwhile, costs are only 22.8% above the national average.
High-earning San Franciscans will also reap financial benefits from a Miami move.
In San Francisco — where the cost of living is 83% above the US average and the effective tax rate is 46% — people making $650,000 per year will pocket $153,000 more in Miami, according to the study.
Wealthy Chicagoans may have less incentive to move, aside from the weather, though there’s still a small opportunity for financial savings.
A Windy City resident making $650,000 would save just $10,000 because Chicago’s cost of living 17.1% over the norm, even though the effective tax rate is 40%, the study said.
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