You think Miami real estate is expensive? try London.

Location, location, location. Almost anywhere else, the tiny dilapidated studio wouldn't attract much more than mice. But this is London and the 77-square-foot former storage room — slightly bigger than a prison cell and without electricity — is going for $335,000. The closet-sized space in the exclusive Knightsbridge neighborhood may be only "about the size of a ship's galley, said real estate agent Andrew Scott, who's handling the sale. "But it's permanently anchored to one of the wealthiest neighborhoods in the world."

The survey, conducted by Demographia International, a U.S. consulting and research firm, described 42 of the cities in the study as affordable. That means it takes less than three years of average income to meet the average price of a home. All of these markets were in North America, with 35 in the United States and seven in Canada.