Housing Market

The local housing market has major ramifications for the development of the City’s labor force, talent retention, and talent attraction. High housing prices relative to incomes hurts poor families and younger workers the most. Unaffordable housing forces younger workers, even those earning top salaries, to make a hard choice to remain in the region, or move to where incomes are higher and housing costs relative to income are more affordable. The most important characteristics of the City’s housing market relative to its economy are as follows: n Due to the development of new units, but a concomitant loss and conversion of older units, the total supply of housing units in Delray Beach from 2013 to 2017 has remained flat, during a period in which the County experienced a gain of 2 percent of housing units. n During the same period, the rest of South Florida has been undergoing a rapid conversion from homeownership to rental housing. Palm Beach County and Delray have defied this tend the homeownership rate for both is high and has remained stable since 2013. n Declining homeownership rates are not necessarily negative, but can indicate increasing unaffordability. A high, stable rate of homeownership is preferable in that homeownership 1) promotes stability of the labor force, especially retaining young talent, and 2) is the major vehicle for family wealth building, as the home is the single largest asset for the vast majority of US households.

Delray Beach is at the moment, a relatively affordable housing market. Its median home value, median home sale price, and median rent is at the median for the benchmark cohort, and considerably less than the County median as well as most of the Florida communities in the benchmark comparison.

The rapid increase of home prices, value, and rents is major concern for the City. The median sale price of all homes in the City has increased by 150 percent from 2012 to the end of 2018 (currently $215,000). Median rents have increase at a slower pace (27 percent), comparable to the rest of the County.

75/50 Ratio Median Home Sale Price, December 2018

Mountain View, CA

Santa Cruz, CA

Coral Gables, FL

Wellington, FL

Jupiter, FL

Boca Raton, FL

Sugar Land, TX

Doral, FL

Sarasota, FL

Fort Myers, FL

Boynton Beach, FL

Oakland Park, FL

Pompano Beach, FL

Delray Beach, FL

Clearwater, FL

West Palm Beach, FL

Tamarac, FL

Margate, FL

Deerfield Beach, FL

Daytona Beach, FL

Palm Beach County

Data provided by Redfin, a national real estate brokerage, 2019

Median Residential Sale Price

Delray Palm Beach County

Benchmark Cities

Benchmark Median

Data provided by Redfin, a national real estate brokerage, 2019

Data provided by Redfin, a national real estate brokerage, 2019

Data provided by Redfin, a national real estate brokerage, 2019

Housing affordability is defined by the relationship of local incomes to local housing prices. Housing prices rising faster than incomes creates a potential affordability issues, and hurts long-term development and retention of the City’s labor talent. At the moment, the annual household income required to purchase a home at the City’s December 2018 median sale price is nearly $78,000 more than $25,000 more than the City median household income.

Overall, the percentage of cost-burdened households in Delray those spending more than 30 percent of their income on housing costs, and a crucial indicator of relative housing affordability is greater than the County but at the median for its benchmark competitors. Of greater concern is the loss of affordable housing units, primarily through rising market prices, both in the County and in Delray Beach, which without intervention, may herald a rising housing affordability problem

Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates

Owner Occupied Unit Supply Change by Value Delray, 2013-2017