Miami labor markets were hit hard by the most recent recession, but have recovered slightly better than the national average. 2011 Miami payroll employment grew 1.6 percent, compared to 1.2 percent nationally. Miami’s February unemployment rate of 9.6 percent is the lowest since February 2009, and 2.6 percentage points off its recessionary peak. Although its unemployment rate is elevated compared to the most recent March U.S. rate of 8.3 percent, Miami labor markets have made significant gains over the last two quarters.
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 2007Q2 and 2011Q3 Miami home prices fell 45 percent, compared with 16 percent nationally. Year-over-year home price declines in Miami slowed markedly in the fourth quarter, however, with home prices looking as though they may have turned a corner. While one quarter of data does not necessarily indicate a trend, home price stability, combined with three quarters of impressive activity in multifamily construction, makes a compelling case that 2012 will be a pivotal year for the Miami economy.
Multifamily rental development remains a bright spot in the Miami economy. Lower post-recession homeownership rates, coupled with tight credit conditions in mortgage markets have driven the boom in Miami multifamily starts. Multifamily starts rocketed up by 85 percent in 2011, following a 40 percent surge in 2010. Through February of 2012, multifamily activity is up 109 percent from the fourth quarter average. Likely, some of these gains will be paid back in following quarters. The overall trend, however, is a positive one and bodes well for the Miami real estate market this year.
Click here for the complete Miami MSA Regional Economic Update for 2012Q2, including charts, commentary and a regional forecast table: Miami2012Q2.