Buyers Priced Out of the Florida Housing Market

Published Aug 10, 2007 | RSS Feed

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During the boom, Florida home prices increased 84 percent. Wages, however, did not. The result is that workers in Florida's key occupations, such as firefighters, nurses, and law enforcement professionals, have been priced out of the housing market. Here is an interesting collection of charts detailing how many hours people in these key occupations need to work to afford fair market rent, and how much they would need to make each year to afford a median priced home in some of Florida's largest metropolitan areas.

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Florida Wages and Housing

Median Priced Home in 2002	Median Priced Home in 2006	% Chg
$135,000	$248,000	84%

Median Family Income in 2002	Median Family Income in 2006	% Chg
$51,800	$56,131	8.4%

Source: Florida Housing Coalition

Every year, the Florida Housing Coalition develops an annual report providing information on wages for various occupations, as well as home price and fair market rent data. The following charts were created using this report as well as the interactive calculator on the Florida Housing Coalition website:

Miami

Median Home Price: $375,000
Interest Rate: 6.5%
Annual Income Needed to Afford Median Priced Home: $127,224
Fair Market Rent for a 2 Bedroom Apartment: $967

Occupation	Annual Income	Max Mortgage	Hrs. to Rent
Firefighter	$65,312	$192,810	24
Nurse (LPN)	$37,918	$112,904	41
Police Officer	$57,741	$170,726	27
Receptionist	$20,925	$63,337	74
Wait Staff	$18,699	$56,843	83

In Miami, it is not possible for anyone making the average salary for the five occupations above to buy a median priced home. Even a firefighter who can obtain a max mortgage of $192,810 would need assistance. It would be much more affordable, and possibly easier to rent versus buy. But even that may be too expensive, as a receptionist earning an average income would need to work 74 hours a week to afford a two bedroom apartment; someone who waits tables would need to work 83 hours.

Fort Lauderdale

Median Home Price: $367,800
Interest Rate: 6.5%
Annual Income Needed to Afford Median Priced Home: $124,516
Fair Market Rent for a 2 Bedroom Apartment: $861

Occupation	Annual Income	Max Mortgage	Hrs. to Rent
Firefighter	$51,418	$152,282	27
Nurse	$38,355	$114,178	36
Police Officer	$57,346	$169,574	24
Receptionist	$23,046	$69,523	60
Wait Staff	$16,931	$51,686	82

In Fort Lauderdale, it is just as difficult for individuals making average wages in the same occupations to afford median priced homes as it is in Miami. Fort Lauderdale police officers (who earn the highest average wages of the five occupations) need to work 90 hours a week in order to afford median-priced homes. Renting, in comparison, is cheaper but still difficult for receptionists and wait staff, who must work 60 hour and 80 hour work weeks respectively in order to rent two-bedroom apartments.

Orlando

Median Home Price: $262,900
Interest Rate: 6.5%
Annual Income Needed to Afford Median Priced Home: $89,003
Fair Market Rent for a 2 Bedroom Apartment: $782

Occupation	Annual Income	Max Mortgage	Hrs. to Rent
Firefighter	$33,446	$99,859	38
Nurse (LPN)	$25,859	$106,898	35
Police Officer	$45,365	$134,626	28
Receptionist	$21,445	$64,853	59
Wait Staff	$16,078	$49,198	78

Median home prices are much more affordable in Orlando than they are in Miami and Fort Lauderdale, but it is still impossible for people earning the average wage in any of the five occupations to afford a median priced home. The police officer, who earns the highest of these wages, falls short by nearly $44,000. Renting a two bedroom apartment is again easier for everyone but the receptionist and the individual waiting tables.

Jacksonville

Median Home Price: $200,600
Interest Rate: 6.5%
Annual Income Needed to Afford Median Priced Home: $67,912
Fair Market Rent for a 2 Bedroom Apartment: $749

Occupation	Annual Income	Max Mortgage	Hrs. to Rent
Firefighter	$36,000	$107,309	34
Nurse (LPN)	$38,022	$113,207	32
Police Officer	$43,406	$128,912	28
Receptionist	$21,070	$63,760	57
Wait Staff	$15,413	$47,258	78

Jacksonville, while still a large metropolitan area, has a lower cost of living. Unfortunately, average wages are also lower in the five occupations shown in this chart. The minimum annual income that is needed to buy a Jacksonville median priced home is $67,912, which means that nobody in these five occupations would be likely to qualify for a mortgage loan. Renting costs quite a bit less and is reasonably affordable for everyone, with the exception of receptionists and wait staff.

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