Miami labor markets were not only hit harder by the recession, but have recovered more slowly than the national average. 2011 Miami payroll employment grew 0.9 percent, compared to 1.0 percent nationally. Miami’s unemployment rate of 11.0 percent is only one percent off of its peak, well-above the national average of 8.5 percent as of December. With lackluster job growth and high unemployment, income growth will remain flattish through 2013.
Miami stands as one of the hardest hit housing markets of the recent recession. According to the FHFA Home Price Index, Miami home prices quadrupled from 1985 through their peak in the second quarter of 2007. Between 2Q2007 and 3Q2011 Miami home prices fell 45 percent, compared with 16 percent nationally. Although the rate of decline in home prices is slowing, third quarter prices were down 7.7 percent year-over-year, yet to reach a distinct bottom. Nationally, home prices are down 4.3 percent year-over-year, according to FHFA data. The Miami existing condo market remains particularly weak, with year-to-date sales as of November 2011 only two percent above 2010 sales, according to the Florida Association of Realtors. Much of the activity in condo markets over the past year seems attributable to Brazilian investors, driven by a favorable exchange rate through the first three quarters of 2011. The Brazilian economy slowed the second half of 2011, however, affecting Miami real estate sales.
In contrast to the single-family and condo markets, multifamily rental development is a bright spot in the Miami economy. Lower post-recession homeownership rates, coupled with tight credit conditions in mortgage markets have driven a boom in multifamily starts. Multifamily starts have rocketed up by 70 percent in 2011, following a 40 percent surge in 2010.
Click here for the complete Miami MSA Regional Economic Update, including a forecast table and charts of regional economic activity: Miami2012Q1.