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Buying a home just a dream for many in Florida

Home prices are soaring well beyond the incomes of most workers, real estate experts warn.

WEST PALM BEACH - After So Young Kim took a teaching job in Florida, her friends in Chicago gushed that she and her husband would be able to afford twice the house when they moved.

Kim had just received a doctorate and a job offer from a university that would double her salary to more than $47,000. But the prices of even small bungalows climbed far beyond what the young couple could afford even when they stretched their budget to an uncomfortable $300,000. So after several disappointing drives around the area and countless Internet searches, they ended up back where they started - in an apartment.

The red-hot housing market in Florida and other booming cities across the country has made the dream of owning a home out of reach, not only for low-income families but also for white-collar professionals. Prices in the West Palm Beach market have soared to the ninth-highest in the nation, gaining on cities that have long been considered outrageous, including San Francisco, New York, Boston and Washington, D.C.

"Many of the overheated real estate markets throughout the country have become unaffordable for the majority of the population," said Jack McCabe, a housing industry analyst in Deerfield Beach. "Many people are paying well over 50 percent of their income for shelter. It leaves no money for savings or sometimes even for recreation."

Prospective buyers in the Sunshine State are feeling the boom most intensely. In the past year, eight of the 10 biggest price increases in the nation were seen here, with Bradenton topping the list with a 45.6 percent gain. In West Palm Beach, prices jumped nearly 36 percent to reach a median price of $362,800.

Real estate experts warn that housing prices are far outpacing the incomes of most workers. In Florida, the median family income of $43,982 fell 26 percent short of the amount needed to finance an average home in 2004, according to a study by the Federal Deposit Insurance Corp.

As prices continue to soar, buyers new to the market in many areas cannot get a loan for any home on the market.

Kim said she feels the skyrocketing housing prices have left her and many others behind, and that they have no chance of catching up. When she received her job offer, she and her husband excitedly pored through Internet real estate ads, looking at pictures of bungalows and back yards where she imagined their three young children would play. But since they moved into the apartment, they have not even tried to look at any homes for sale.

Much of the disappointment for Kim and others new to Florida came from a decades-old belief that the Sunshine State was an affordable retirement destination, particularly compared to other warm-weather destinations like California or Hawaii.

[Last modified July 11, 2005, 01:00:09]