It’s no surprise that property is prohibitively priced in Hawaii and California, or that homes are very affordable in Indiana. But here’s a shocker, from a new affordability measure by the National Association of Realtors and Realtor.com: Florida no longer is a bastion of cheap housing.
In fact, Florida ranks as the nation’s sixth least-affordable market, behind only Hawaii, California, the District of Columbia, Montana and Oregon. By this reckoning — which attempts to correlate incomes with the supply of homes affordable to buyers in that income range — Florida is less affordable than New York, Massachusetts or Colorado.
Blame fierce competition for entry-level homes, which are in particularly short supply in regions such as Palm Beach County.
“Consistently strong job gains and a growing share of millennials entering their prime buying years is laying the foundation for robust buyer demand in 2017,” Realtor.com Chief Economist Jonathan Smoke said in a statement. “However, buyers with a lower maximum affordable price are seeing heavy competition for the fewer listings they can afford. At a time of higher borrowing costs, this situation could affect affordability even more as buyers battle for a smaller pool of homes and bid prices upward.”
Florida long has ranked high on affordability measures, thanks to home prices that are a fraction of those in San Francisco and Manhattan. But Florida incomes also skew low.
Texas, another state with seemingly cheap housing, also ranks as unaffordable in the new metric. It comes in as 13th least-affordable market.
The measure uses a not-especially-easy-to-understand scoring system. Scores range from Hawaii’s 0.52 to Indiana’s 1.23. Florida’s score is 0.71. The lower the score, the less affordable the state’s housing market. The national average was 0.92.