By Gay Cororaton, MIAMI REALTORS Chief Economist
In the first half of 2024, office and retail assets emerged as the investors’ favorites, while multifamily and industrial took a back seat, according to Miami Association of Realtors® (MIAMI) analysis of county property data.
Dollar sales volume of the four core property types —multifamily, office, retail, and industrial —fell 18.2% from one year ago in the first half of 2024 to $1.5 billion. Among only core commercial real estate, there were 44.9% fewer transactions in the first half of 2024 from one year ago, down to about 490 transactions.
However, dollar sales volume of retail properties rose 63.4% to $484 million even as the number of transactions fell 35.1%. Dollar sales volume of office properties rose 11.0% in the first half of 2024 to $348 million even as transactions fell 58.9% .
On the other hand, dollar sales volume of multifamily properties with at least five units fell 51.8% in the first half of the year to $248 million, with a 44.8% decline in transactions. Dollar sales volume of industrial properties fell 40.9% to $394 million with 36.7% fewer transactions.
Miam-Dade County’s strong job growth, elevated migration compared to pre-pandemic levels, the rebound in tourism, and the influx of wealth into the area, along with property-specific fundamentals, are factors that have bolstered investors amid a challenging economic environment of high interest rates, tighter credit conditions, and lingering concerns of a deeper economic slowdown.
33% of Miami-Dade County’s municipalities saw an increase in sales in the first half of 2024
Of the municipalities and the combined unincorporated areas of Miami-Dade, 33% of 35 markets had higher dollar sales volume in the first half of 2024 compared to one year ago.
Dollar sales volume in areas like Aventura, Pinecrest, Miami Gardens, Opa-locka, Miami Lakes, Bay Harbour and Key Biscayne. Sales rose due to asset-specific deals: retail (Aventura), office (Miami Lakes, Pinecrest), industrial (Miami Gardens, Opa-locka), and vacant residential land (Bay Harbor Islands, Key Biscayne).
Dollar sales volume fell in the largest municipalities of Miami, Miami Beach, Coral Gables, Hialeah, and Doral as transactions declined across most asset types.
Market outlook is positive driven by sustained job growth, rising wealth, and elevated migration
The long-term outlook for the Miami-Dade’s commercial real estate market is strong and healthy, underpinned by rising population growth, the resurgence of tourism, and the influx of wealth into Miami-Dade.
A higher fraction of the population 55 years old and over are retiring from the workforce , with the national labor force participation rate (employed/population) declining from 40.2% in January 2019 to 38.2% as of June 2024.
Miami-Dade County continues to experience an influx of wealth due to migration at higher levels. According to MIAMI’s analysis of tax data, Miami-Dade County had a net household income gain of $2.2 billion in 2022 compared to just $500 million in 2019. The average adjusted gross income of households who moved in Miami-Dade was $175,600 (see Migration Bolstered Southeast Florida’s Aggregate Household Income by $10 Billion in 2022 – MIAMI REALTORS®)
Driver license exchanges of out-of-state movers during the first half of 2024 are above the levels in the first half of 2019 (pre-pandemic). Out-of-state movers from New York are up 35% from the level in 2019 while out-of-state movers from California are up 57% (see Out-of-State Driver License Exchanges Remain Above Pre-Pandemic Levels in Miami-Dade County in the First Half of 2024 – MIAMI REALTORS®).
Airport arrivals at Miami International Airport in the first quarter of the year are the highest in years at 7 million from 5.6 million in the first quarter of 2019.
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