Snowbirds flocked to Miami’s beautiful beaches in order to thaw out from this winter’s unusually cold weather. Miami’s warm weather drew in more domestic tourism in the first part of 2014, with total domestic passenger deplanements at Miami International Airport increasing 3.2 percent from a year ago in Q1. Hotel occupancy remained in solid territory in the Miami area, at 85.8 percent in March. It is not just the weather that is leading to improvements in Miami’s tourism industry. The improving overall U.S. economy continues to support growth in leisure and hospitality throughout the Miami area. Consumers are feeling the positive wealth effects from increasing home prices, improving 401ks and increasing incomes, leading to increased consumer spending.
Demand for single-family houses and condos remains strong throughout the Miami Metropolitan Statistical Area (MSA). Double-digit gains in house prices last year have encouraged more home owners to put their houses on the market. However, residential real estate markets remain tight. Miami house prices increased 16 percent or above year-over-year from November of 2013 through February 2014, according to the Case-Shiller Home Price Index. Improving U.S. and European economies will continue to drive both domestic and foreign demand for Miami real estate in 2014.
Miami MSA labor markets continue to improve. The Miami MSA labor force grew at a 4.1 percent annualized rate in Q1. This is a much stronger showing than the 0.7 percent labor force growth in 2013. Employment continues to advance in most industries throughout the MSA. According to the BLS, construction payrolls were up 7.8 percent, professional and business services were up 4.2 percent and leisure and hospitality were up 3.5 percent from a year ago in March. We expect the unemployment rate throughout the MSA to continue to decrease, creating tighter labor markets and putting upward pressure on wages in 2014.
Click here for the complete Miami MSA Regional Economic Update: Miami 2014Q1.