Miami Housing Prices Must Drop to Attract Florida Mortgage Borrowers

Miami housing prices would have to drop 41.4 percent to return the city’s income-to-housing cost to its historical ratio, said a report by John Burns Real Estate Consulting.

This is further than any other major market surveyed, the report found. The Irvine, Calif.-based consultant calculated average wages versus average costs of home ownership, including Florida mortgage loan payments, property taxes and down payments, to tabulate affordability discrepancies.

Home prices in Miami would have to fall $145,000 from their current $350,000 in order to return the city to historical affordability levels.

Under federal affordability guidelines, no more than one-third of a family’s income should be dedicated to housing costs.

The Riverside and San Bernardino areas of California came in a close second in the affordability gap, requiring prices to drop 41 percent, or about $160,000, to return to a historic balance. Los Angles was third, requiring a 39.5 percent fall in prices, followed by Baltimore, at 37.2 percent, and Orange County, Calif., at 34 percent, the report found.

The most affordable spot in the nation: Indianapolis. The Miami housing market has a long way to go before Florida mortgage borrowers can easily afford to take up residence there.