The latest polls on consumer confidence and the affordability of property in Florida show mixed results. With the improvements in economic conditions Floridians are spending more, but the widening gap between wages and house prices moves homeownership further out of reach making property rental the most affordable option.
The latest consumer confidence survey carried out by the University of Florida showed a rise of two points in November. This latest increase brings the index in Florida to levels last seen before the recession in March 2007. On the back of this renewed confidence analysts are expecting a record holiday season for the retail business with sales predicted to rise by over 5 per cent.
The boost in consumer confidence is mainly due to better economic conditions. Unemployment in the state continues to fall – October’s rate was 6 per cent, slightly higher than the national average but well below the recession levels of 11 and 12 per cent. And job creation continues to boom with some 34,000 new jobs in Florida since September.
The Florida property market, one of the engines behind economic growth in the state, remains firmly on the road to recovery. Single family home prices have gone up by 4.6 per cent in the year to October and everything points to a similar scenario in 2015.
However, despite better economic conditions, home affordability in Florida continues to go down, particularly in the south of the state. A recent survey carried out by Interest.com found that the Miami metro area is the fifth least affordable in the country behind some of the largest cities in the US – San Francisco, San Diego, New York and Los Angeles.
Property in the Miami metro part of Florida has an average price tag of US$270,000, well out of reach of many Floridians’ incomes. In the Miami metro area between 2013 and 2014, salaries increased by 2 per cent while house prices rose by 6 per cent. This widening gap makes homeownership less and less affordable for many in the state.
Properties in other parts of Florida are considerably cheaper, but the problem of affordability persists for many would-be homeowners who are also unable to access mortgages because of stringent credit conditions. In the light of this situation, renting a property becomes the most affordable option for many families and young couples. It’s therefore unsurprising that locations in Florida such as Tampa and Jacksonville present some of the best property appreciation and rental yield levels in the country.
Source: Florida Realtors