Affordable Housing Inventory is Down, Costs are High in South Florida
Savvy investors of multi-unit properties know to have an eye on the affordability of housing in their market of interest.
South Florida in particular offers unique affordable housing investment opportunities. Elsewhere in the country, affordable housing sales surged in the last quarter of 2021, while luxury sales saw a downtick. But here, the South Florida affordable housing crisis continues.
In January, a one-bedroom apartment in Miami cost an average of $2,340, up more than 25 percent compared to a year ago, according to Zumper. That makes Miami – and all of South Florida – one of the most expensive rental markets in the nation.
In fact, some reports claim that the greater Miami housing market is less affordable than even New York City.
Home Prices, Rental Costs Rising
The average monthly income in South Florida is growing but can’t keep up with the cost a median single-family home. The problem is bad in Broward and Palm Beach counties but is especially noticeable in Miami-Dade County. In Miami, even a condo costs more than $4,000 more than the county’s median income can afford.
Housing costs are rising because the supply is shrinking.
The growing crisis in South Florida affordable housing is in part due to outside investors. Properties are being purchased with cash, site unseen. In Broward and Miami-Dade, a third of all single-family home sales in December were paid in cash.
Some investors recognize the market for investments in affordable housing. Blackstone Real Estate Income Trust recently purchased $300 million in apartment communities throughout South Florida, citing a commitment to affordable housing. A sizable chunk of the investment was in Broward County, including large apartment complexes in Hallandale Beach, Oakland Park and Coconut Creek.
The Blackstone Real Estate Income Trust allows individual investors to profit from larger purchases, just like this recent acquisition. You can read more such investments, called syndications, in this blog post.
In an effort to create more affordable housing, Pulte Homes purchased land for 44 townhomes in Lauderdale Lakes this month. New construction of affordable housing units have been limited.
Help Make a Difference in Affordable Housing
Interested in your own investment in South Florida affordable housing? Royal Empire Realty can help you choose the best option, whether that’s a quality syndication or a direct investment in multi-family property.
Whether you’re looking for a duplex or an apartment complex, Royal Empire Realty stands ready to help you build your Empire. Learn more about investing and get your free investment calculators here.