In 2024, Florida’s housing market has reached a critical point, with affordability hitting levels not seen since the housing bubble of 2006-07. To comfortably afford a home in the Sunshine State, you now need to make over $100,000 annually—assuming that no more than 30% of your gross income is spent on mortgage costs. This is a staggering 40% higher than Florida’s actual median income of $72,000, creating a significant affordability gap for many residents.
A Historical Perspective: Comparing 2024 to the 2006-07 Housing Bubble
The parallels between today’s market and the housing bubble of the mid-2000s are striking. Back then, Florida’s real estate market was similarly unaffordable, driven by speculative investments and easy access to credit. When the bubble burst, housing prices plummeted, making homes affordable for the average Floridian for nearly a decade. In the years following the Great Recession, Floridians needed to earn just $40,000 annually to afford a home—less than half of what is required today.
The Pandemic’s Impact on Housing Costs
Before the COVID-19 pandemic, Florida was a relatively affordable place to live. However, the pandemic ushered in a wave of changes that drastically altered the state’s housing market. Remote work, coupled with an influx of out-of-state buyers seeking warmer climates and more space, drove up demand. With supply struggling to keep pace, prices soared, pushing affordability out of reach for many local residents.
Regional Disparities in Housing Affordability
The affordability crisis is particularly pronounced in certain areas. In Orlando, for example, you now need to make more than $100,000 to afford a house, despite the local economy being driven largely by service jobs with a median income of around $75,000. This disparity is even more glaring in Miami-Dade County, where the median income is $70,000, yet a household needs to make $140,000 to afford a home. This means that the cost of buying a home is literally twice what it should be based on income levels.
The title of “most expensive county in Florida” goes to Monroe County, home to Key West, where the required income to afford a home exceeds $250,000. This level of unaffordability is comparable to what is seen in high-cost areas like California. Collier County (Naples) is also near the top, with a required income of $155,000.
Using Data to Understand the Affordability Crisis
A systematic approach to calculating the salary needed to afford a house involves taking the monthly mortgage payment across different regions, annualizing it, and then applying the 30% income cost convention. By accessing data for various states, counties, and ZIP codes, a granular view of where housing affordability stands across Florida can be gained.
The Future of Florida’s Housing Market
The current state of Florida’s housing market raises questions about sustainability and long-term affordability. With housing costs rising far beyond income levels, the state risks a repeat of the 2006-07 housing crash unless significant changes occur, either through market corrections or policy interventions. Understanding these trends through data is crucial for anyone looking to navigate Florida’s complex and rapidly evolving real estate landscape.
In summary, while Florida remains a desirable place to live, its housing market in 2024 presents significant challenges for potential homeowners. The affordability gap is widening, and without changes, many residents may find themselves priced out of the market, reminiscent of the last housing crisis. These insights serve as a sobering reminder of the importance of affordability in ensuring sustainable growth and economic stability in the state.
