Miami saw a record year for real estate in 2014. Single-family home sales saw their highest number ever recorded on an annual basis, while condos sold the second-highest number on record. Miami consumers are feeling confident and are aware of the prodigious growth their region has seen since the market’s bust. The Case-Shiller index for the city was up 8.6 percent over the past 12-month period from November 2014. While the average number of days on the market for both homes and condos rose over 2014, the rate remained tight, at 45 and 57 days, respectively. Institutional buyers are exiting the market, as evidenced by the slight decline of cash transactions; however, foreign investors are still flocking to Miami. Our outlook for the global economy lends to further positive housing market expectations, as foreign investors continue to use Miami for safe-haven investment and for fun. The downside risk, in addition to a strengthening dollar, is creating a market so strong that investors are priced out. S&P recently upgraded Miami’s bond rating to A+ from BBB.
Miami continues to see better-than-national labor market improvements. The metro area is poised to hit a sub-5 percent unemployment rate by year-end. Payroll employment grew near or above 3 percent for all of 2014, a trend that we expect to continue in 2015, maintaining its strong rate. Indicative of the real estate boom occurring in the city, construction jobs grew 7.9 percent over 2014, while large industries like leisure and hospitality, education and health services, financial activities and trade, transportation and utilities all grew around 3 percent for the year. Professional and business services grew nearly 5 percent for 2014. We look for Miami to experience a similar 2015, sustaining strong income gains.
Optimism in development will not be waning any time soon, as evidenced by projects like tourist-drawing SkyRise tower. Condo demand will remain strong; over 9,500 units were under construction going into 2015.
Click here for the complete Miami MSA Regional Economic Update: Miami2014_Q4.