Excerpt from the article:
While California suburbs in particular have always been expensive, the spreads between median income and median price have never been this exaggerated. That’s because the housing boom pushed prices up far faster than incomes rose. With every dollar prices rise above what incomes can cover, it becomes more difficult for renters to move into buying.
Another obvious place affected by this trend was South Florida, where prices spiked during the boom, but incomes and economic activity didn’t rise accordingly. West Palm Beach, Fla., and Pompano Beach, Fla., both on our list, are good examples of inflated income-to-price spreads, at $318,300 to $45,250 and $279,500 to $42,409, respectively.
The economic effect?
“This is brand new,” says Wendell Cox, president of Demographia. “It’s all happened in the last six years and we’re not sure what it means yet.”
One thing it does mean is heavy out-migration. Cox points out that many of the areas with the highest spreads — in and around San Francisco and Los Angeles, most notably–are rapidly losing population to places in the South and Southwest, locations where affordable housing and business costs have drawn people and jobs from coastal population centers.
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