Labor market metrics were mixed for the Miami metro area in 2013Q3. Payroll employment grew at a 3.2 annualized rate for the quarter, the highest growth rate seen since 2005Q3. The unemployment rate for the region declined from 8.4 percent in 2012Q3 to 7.0 percent in 2013Q3. The improvement to the metro area unemployment rate was due in part to a contraction in the labor force that began this year in March and remained visible through the most recent October data release. Miami labor market conditions are expected to improve through 2014 as South Florida real estate markets firm up and the overall U.S. economy strengthens.
Regional real estate markets healed through 2013. According to the Case-Shiller data, Miami house prices were up by 14.3 percent in September over the previous year, comparing favorably to the 20-City average increase of 13.3 percent. When viewed in absolute terms there is much more healing to be accomplished. Even though house prices are going up, they are still about 40 percent below the early 2006 peak according to the Case-Shiller data. This gap represents a significant loss of wealth for South Florida that remains to be recovered. Improving job creation and income growth in Florida and the U.S. as a whole, along with rising confidence and consistent price appreciation, are tailwinds for Miami real estate markets. Rising home mortgage rates are a headwind to housing markets but are not expected to derail the housing recovery. Foreclosures are still a problem. According RealtyTrac, Miami had one of the highest foreclosure rates for a metropolitan area in 2013.
PortMiami is currently investing over $2 billion in upgrades in preparation for the expansion of the Panama Canal. In order to accommodate larger ships, PortMiami has invested in big ticket items such as dredging the harbor channel, new Super Post Panamax cranes used to unload the new super-vessels, and a tunnel system which connects freight liners with interstates and cargo trains. PortMiami projects that the activities will support 33,000 jobs, both directly and indirectly, within the region, as well as increase trade with Asian countries. The project is expected to be completed in 2015.
Click here for the complete Miami MSA Regional Economic Update: Miami 2013Q3.