Stagnant wages vs. rising housing costs

People in Southwest Florida are frustrated, as workers’ wages are not going up as quickly as housing prices.

One real estate expert put it like this: The cost of housing is going up because the supply is low and demand is high. People are moving to Southwest Florida at an even faster rate.
All these people need roofs over their heads, but it’s becoming more and more difficult to afford the perfect family home, much less sign any type of lease.

A report by FilterBuy shows that residents of the Cape Coral/Fort Myers metro area experienced an increase of 16.4% in the cost of living between 2010 and 2020, the eighteenth fastest such increase in the U.S.

“You’ve got to do a lot of research and figuring out exactly what you can afford, because prices have increased dramatically,” said Shelton Weeks, professor and director of the Lucas Institute for Real Estate Development & Finance at Florida Gulf Coast University. “And, unfortunately, wages have not kept up with the home prices. So, you’re going to need to be prepared, make sure that you have your financing in order. And when you identify the home that you want to buy, you’re ready to act at that point in time.”

One Realtor told WINK News there have been more buyers than ever seen in the past. The biggest concern is that they don’t have the properties to show potential buyers, and the ones already available go quickly. If you find one you like, you had better be ready to move fast.

Realtor Devin Sweazy says a lot of her clients coming into Marco Island are relocating from the midwest. Between the square footage and lifestyle they’d like and the low inventory, they can’t be as picky as they’d like.

“A lot of people, when they’re moving to Florida, are particular to their rear exposure,” Sweazy said. “They want the sunset view, or their goal would be to be on a canal and be in the water. But, unfortunately, because of inventory or pricing, there’s compromises to be inland. So the bigger concern, really, is just finding a home that will accommodate their family. And then, when you do, more than likely you’re in a bidding war.”

Sweazy also says the market has to reach a cap at some point. The population will probably continue to grow and the work force is going to have to grow with it to accomodate them.

So does anyone benefit? Weeks says if you’re selling an existing home or downsizing,
you’ve certainly benefitted from housing prices, but not so much people who are working or trying to save up for a home. The increase in wages has not only not kept up with housing prices, it has been significantly below housing price increases.

“Sellers’ biggest concerns are where will they go once their house sells?” Sweazy said. “Sure, they can sell for an incredible profit, but then they are in the same position as all the others buyers… sell high, buy high. What if they cant find something, what if nothing comes available, what if they are outbid—where will they go? What will they do? It is, unfortunately, what is contributing to inventory remaining low. “