Despite High Real Estate Values, South Florida Doesn’t Crack Top 10 Overpriced List

We all gripe about the cost of gas, utility bills, even things like movie tickets. No one likes to pay more than they have to, but when you start talking about housing costs, the complaints are more legitimate. As we see in places like the Palm Beach County housing market, where jobs and salaries are simply not keeping pace with soaring real estate values, the issue has become one of widespread concern.

The craziest part? While they make constant headlines for their housing costs, Palm Beach, Broward and Miami-Dade counties are nowhere to be found on Forbes’ list of the ten most overpriced places in the United States. Usual suspects New York, San Francisco and L.A. are hanging tough, but some newcomers to the undesirable list might surprise you.

Tucson, Ariz., and Essex County, Mass.? Believe it. In fact, Essex County (pictured) which lies north of Boston and comprises a host of posh suburbs and picturesque waterfront locales, took the cake as the most overpriced place in the U.S. With those water views and proximity to Boston come high living costs and some seriously expensive real estate.

“We saw a lot of waterfront property being bought and smaller homes being torn down and replaced by million dollar mansions during the dot-com boom,” explains Sara Young, Economic Development Manager at the Cape Ann Chamber of Commerce. “Now you’ll find a lot of those homes on the market, and they aren’t selling because nobody can afford them anymore.”

The recent increase in inventory has caused the median home prices in Essex County to drop slightly, from $380,000 in the first quarter of 2005 to $373,750 in the first quarter of 2006. But, as people trying to break into the stagnant Broward County housing market know, that’s not enough to make it a deal when you need a $100,000 salary to begin with.

So much of South Florida’s housing stock has been knocked down or turned into more expensive units as part of the condo conversion craze. Now low- and middle-income people are paying the price. Real estate prices may be cooling, but not enough to matter for many. What good is saving $50-60 a month in Florida home loan payments when you can’t even qualify?

In compiling this Top Ten list, Forbes took into account job growth, cost-of-living rankings, and added an affordable housing index from research firm Moody’s Economy.com and a salary index from PayScale. The 10 metro areas with the worst combined scores made the list, with a high cost of living, low salaries, slow job growth and little affordable housing.

THE TOP TEN OVERPRICED AREAS (MEDIAN PRICE):

1. Essex County, Mass. ($373,750)
2. San Francisco, Calif. ($720,400)
3. San Jose, Calif. ($746,800)
4. Honolulu, Hi. ($625,000)
5. Cambridge, Mass. ($390,400)
6. New York, N.Y. ($528,700)
7. Tucson, Ariz. ($248,600)
8. Oakland, Calif. ($720,400)
9. Boston, Mass. ($390,400)
10. Los Angeles, Calif. ($563,900)