True story: we were talking entry-level salaries today at work when one of my coworkers said, “I don’t know how anybody can possibly live on $X here in Miami.”
My salary: about $5k below $X.
I immediately busted out laughing and admitted what I make, because I’ve never been the secretive type. And besides, he (and everybody else in the conversation) clearly made well above $X. Poor guy – he immediately backpedaled and said, “Uhhh, I mean, with a family. You don’t have a family.” Well, no, but I’m putting my girlfriend through school, paying for a new Jeep, and living on South Beach with a dog that gets more haircuts than I do. We’re not exactly scraping by on Ramen noodles – although I have to admit I’m eating jambala from a box mix at the moment. It’s not because I don’t have a choice, it’s just that I happen to really like Zatarain’s jambalaya with spicy sausage.
Cost of living isn’t cheap in Miami, but it’s not that bad, with one exception: buying a house. The real estate market here is utterly unreal, completely detached from any reality I’ve ever seen. People here obsess about realty. The guy in the next cubicle talks real estate all day long, trying to buy and sell his rental properties. It’s as if their jobs are just their part-time gigs, and their houses are the real deal.
The Miami Herald recently ran a series across several Sundays talking about the real estate market here. Half of the stories weeped over an upcoming slowdown, and the other half weeped about how people were priced out of the housing market. Add the two together, and you come to the conclusion that even if the market slows down, people will still be buying houses because they can’t afford housing at the current levels. It’s mindboggling.
But try as I might, I can’t get my head around these prices. In the 1949 building where we live, there’s a 2 bedroom, 1 bath condo with 910 square feet for sale for a mere $399k. That’s no garage, no covered parking, no laundry room (the w/d is in the kitchen), and a bathroom the size of my jambalaya box. The view’s pretty good and it comes with access to the rooftop “terrace” here, and we’re only two blocks from the ocean, but – I mean, come on, $399k?!? We’re renting for $1,350 for crying out loud. Why on earth would anybody buy in this market?
This is why people get into the mindset that you can’t scrape by on $X per year – because they’re trying to spend $3,000 a month on a house payment, plus property taxes and insurance. Heaven help you if you want a house with room to raise kids.
Every now and then I look back at the Houston Association of Realtors and check out home prices just to remind myself of what the rest of the US is like. $400k buys one seriously amazing loft in downtown Houston, not to mention a hell of a big house in the ‘burbs.
Maybe a year from now, I’ll look back and kick myself for not buying sooner, but right now, I have absolutely zero remorse for signing a one-year lease on this apartment. I love this neighborhood more and more with every passing day, but paying $400k for this – man, no way. No way.