Miami Real Estate Markets Expected to Firm Up in 2013

  • After spiking at the end of 2011, Miami payrolls have declined for the last two quarters. Miami job growth is expected to be just 0.6 percent for full-year 2012, well-below the nationally forecast rate of 1.4 percent. Miami’s unemployment rate also stalled in the third quarter, at 8.6 percent, and is expected to decline only gradually.  Local income growth spiked over the first half of the year, but is forecast to moderate over the last two quarters of 2012. Only-modest job growth and lackluster income gains make Miami feel sluggish over the rest of the year.
  • Miami stands as one of the hardest hit housing markets of the recent recession. Between 2007Q2 and 2011Q3 Miami home prices fell 45 percent, compared with 16 percent nationally. Year-over-year home price declines in Miami have slowed markedly into mid-year 2012, with Q2 home prices unchanged from a year ago. Full-year 2012 home prices are expected to be slightly negative on a year-over-year basis, then firming in 2013.
  • Multifamily rental development remains a bright spot in the Miami economy. Multifamily starts rocketed up by 59 percent in 2011, and are expected to be up over 69 percent in 2012. Some of these rapid 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.
  • Tourism and trade are also top performers for the Miami economy. Tourism-related tax revenues are up, and passenger traffic at Miami International Airport (MIA) is expected to set a record in 2012. Freight shipments at MIA have grown 4.8 percent through September, but are vulnerable to recession-driven declines in demand from Europe and a cooling Chinese economy. According to the Federal Reserve’s most recent Beige Book, the Atlanta District (which includes Miami) noted weak tourism traffic from Europe. Much of this weakening was offset up by an increase in Canadian and Latin American tourism. However, Latin American economies are also feeling the drag from Europe and Asia, though, adding to downside risk for Miami’s forecast.

Click here for the complete 2012Q4 Miami Regional Economic Update: Miami 2012Q4.

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