Miami area real estate prices shows no sign of relenting. Commercial spaces in Brickell are seeing record sales prices, and home price growth in the area has exceeded eight percent in year-over-year gains since October 2012. The $2 billion mega-development, Miami Worldcenter, one of the largest urban real estate projects underway in the country, moved one step closer to its 2015Q3 groundbreaking as the City of Miami approved its first phase. In addition to bringing more retail and living space to the downtown area, the project will add a convention center, drawing even more visitors. Miami’s housing supply has responded to demand pressures in a timely manner, forcing the months’ supply of condos to reach the upper bound of what is considered to be a “healthy” market: nine months. Single-family units remain at a tight 5.3 months’ supply; this disparity is reflected by markedly stronger pricing for single-family units.
Miami will continue to experience above-average job growth, holding around three percent for 2015. The unemployment rate for the area continues to tighten, and will drop below five percent in the coming quarters. Miami is adding high-paying jobs. Construction jobs continue to be added at a near-10-percent year-over year rate, while the financial activities, professional/business services, leisure and hospitality, and education and health sectors are adding jobs at around a four percent year-over-year rate. This strong labor market will bolster migration into the Miami metro area.
The strength of the dollar remains a concern for Miami, as their luxury condo market is driven by foreign cash buyers. Miami is currently around 30 percent more expensive versus a year ago for Russians, and growth in Latin America is slowing down. Currently, the perception of relatively stronger economic conditions in the U.S. is still shoring up safe-haven real estate demand in Miami, but that demand is subject to currency risk.
Click here for the complete Miami MSA Regional Economic Update: Miami2015Q2.