Job Growth Keeps Market Steady in Miami
- Oct 24, 2017
Miami’s multifamily market is fully packed. Although enjoying solid fundamentals, one of the market’s biggest challenges is the substantial amount of new supply. This has put a damper on rent growth, which started decelerating in late 2014, going from a 6.1 percent increase to 2.0 percent as of August 2017. Population and job gains even out the situation, producing a healthy demand and ensuring that new units are slowly but steadily absorbed. However, the availability of low-cost housing is still an issue. Complicating things is a new South Miami ordinance that requires solar panels on all new residential projects, which will increase construction costs and make it more difficult for developers to pencil out low-cost units.
The metro’s economic profile is diverse, but education and health services; leisure and hospitality; and trade, transportation and utilities continue to drive job growth. Construction activity and industrial expansions are also strong, with Amazon’s new 855,000-square-foot fulfillment center a telling example. The list also includes major infrastructure projects like the Ft. Lauderdale Airport revamp and the upcoming Brightline Express train that will connect Miami to Orlando.
Even though the area dodged the worst predictions, the true cost of Hurricane Irma is still unclear. Florida International University estimated the statewide damage at more than $19 billion, of which $6 billion will be paid by insurance companies, while two-thirds of the losses will be shouldered by homeowners.