The Miami metro area set a record for single-family home sales in 2015. Palm Beach and Broward counties both saw single-family home sales up more than twelve percent from 2014’s already good numbers. Miami-Dade County was up three percent from 2014. Months’ supply of single-family units continues to tighten, ending 2015 at 5.2 months, while condominium supply is still benefiting buyers, with 9.5 months of inventory. The abundance of new condominium construction projects is siphoning demand from existing unit sales. According to CraneSpotters, there are currently almost 130 new condominium towers under construction, containing over 12,900 units. A further 223 buildings, containing over 30,000 units, are in the pipeline. Competition among developers is prompting incentives, and strategies are starting to target domestic investors.
More than one in three residential real estate transactions in Miami in 2015 involved international buyers. Slowing demand and declining all-cash offers in the condominium market show the impact of foreign headwinds in the city. More scrutiny on title companies in the area will also impact luxury all-cash buyers. New opportunities are arising, however, as the Panama Canal widens, and PortMiami is positioning itself to capitalize on freer trade and travel to Cuba. European and domestic tourism to Miami is still expanding.
Job growth remains pronounced in the high-paying professional/business services sector, and leisure/hospitality, trade/transportation/utilities and construction are still seeing healthy additions. The BLS reports that average hourly wages are lower in the Miami area than the national average, but price levels are accelerating much faster than the national level. This, together with rising home values and tightening labor markets, is placing strong positive pressure on wage growth in the region. Less Latin tourists could slow things.
Click here for the complete Miami MSA Regional Economic Update: Miami 2016Q1.