Miami, South Florida – The Next Real Estate Boom
By: Rene Velez (July 21st, 2008)
Good god, the bottom hasn’t even been reached and here I am writing about the next real estate boom in Miami. With 10 years of excess inventory in condominiums in downtown Miami and no one with a comprehensive answer as to how all those units will be absorbed. With rows of houses up for sale and a foreclosure rate that is keeping attorneys, banks and courts very busy why would I make a comment about the next real estate boom in Miami? I guess, it is inevitable that,……….. it will come. In fact I think it might come faster than what anybody may be willing to predict or admit. Yeah…I know it’s bad out there. For sure … I am not crazy and even the most pessimistic of economist will tell you….its just another cycle. But let’s not stop there. The reality is there is much about SoFlo (South Florida) that many have failed to really take in. In the end it adds up to a layer of insulation that SoFlo has. It’s something that few people get when they come here. In fact it’s something few people recognize on a daily basis even though we live here. We take it for granted. We hear of it. Yet somehow, the glare gets in our eyes and we don’t see it, the heat tires us until we can think no more. Then we start to sip on Cuba Libre, Mojitos or the local Margarita and suddenly it’s just not that important.
The Tropical Vibe
This is an element of the local life style that has in some way an insulating factor to the local economy. Certainly, this is not an economic factor that you would learn in a Harvard, Princeton or Yale economics class. But you might hit upon it at Florida International University or University of Miami. We have a certain Tropical Vibe and culture. Sometimes it shifts completely into the island mentality time zone but, if for no other good reason, only because we are attached and part of the upper 48 we maintain some sense of formality. Yes we have a Tropical Vibe. It’s in the food we eat, the cloths we wear, the warmth of the air. It’s in the way we relax and in the partners we attract. It’s in the sun on our faces and shoulders. We are a beautiful people in a beautiful place. The sun shines bright and the seasons soft and subtle. Yes this is an important variable as to why we do well. Everyone wants to be here. Everyone wants to live on vacation. So in the long run people will continue to come.
Value
Here is a term that most economist understand. We have “VALUE”! Yes it’s gotten very expensive to live here. I know that. In fact I am not sure how some manage. I am not sure how I manage. But here is something to consider. Go anywhere else in the USA, or internationally and find a place where you are 8 miles from the beautiful Caribbean waters and still find a home for less than $600,000. In a nutshell even expensive ocean front property is still a relative bargain considering its year round utility in a subtropical climate. So people will continue to come. We have “Value”!.
Culture
When I came here in 1976 from New York, I always new Miami had culture. Not in the New York kind of way, but you know, there was a way and a method to this place, and there were identifiable ethnic and cultural traits that gave Miami a culture. Today…..the scene is exploding. We have the Arts! We are in fact a metropolis recognized throughout the USA and the World. We have good food and dining. We have hotels. We have major universities. We have the people. People from all over the Caribbean, Central and South America, The USA, Europe, Asia and Canada. We are a cultural melting pot. We have glamour and the not so glamorous. We have baseball, hockey, basketball, football. We have festivals, air shows, auto racing, regattas. We have politics, trade, travel and tourism, music and cinema. We have a culture and a life. Hence people will come.
The Underground Economy
That’s right …….what no one in Miami wants to speak of. We have an underground economy. No one knows for sure how much, but it’s been here for decades scratch that “centuries”. Slave labor, rum running, drugs etc. etc. Today, we don’t have slave labor or rum running although some may argue that point, we have flight capital and offshore banking. This is money that comes to or through South Florida due to economic and political risk in the Caribbean and Central and South American countries, finds its way here and into our local economy. For sure we have some drug money also. Somehow, this adds to the economic stability of our local economy. I admit it is an ugly and seedy side of this economy but everybody has trash.
Retirement Stability Factor
People have been coming here for years for the warm weather and easy seasonal transitions. It’s easier on the bones and the subtle seasons makes life more pleasing. Sunshine is happiness and a good life. Yes. We need to give more credit to those retired folk who live on a fixed pensions, pay their taxes, spend a lot of money in healthcare goods and services and help stimulate the economy. Let’s also not forget the wealthy counterparts who come here to soak up the sun, play on our golf courses and eventually move into the varied assisted living facilities and nursing homes. This economic factor is not only stimulating but stabilizing in our local economy.
Gateway to the Americas
Here is a slogan I have heard often over the years. It’s time to really capitalize on this. No doubt that because of our inherent proximity to the Caribbean, Central and South America we are in fact the gateway to these countries. We have historically, benefited from this fact. Perhaps more so because we have a ready, willing and welcoming participatory population of Hispanics and culture that is very inviting to trade and business. Many of these countries are still developing countries. This essentially translates to further development and opportunities for business. There are many challenges in making this more of a robust and symbiotic relationship but the makings are already there. Although there are other states competing for this business, Miami is the ideal location for the furtherance of economic ties and for trade and tourism. Although I suspect the development of many Caribbean, Central and South American countries will take a long time I can see that many companies will choose to have their headquarters in south Florida. For this reason, this is a long term stabilizing factor and an opportunity to attract more business and population density into the area in years to come.
Conclusion
Here in South Florida we have many challenges ahead of us. Despite our economic melt down in the credit markets, overdevelopment in real estate, rising price of petro fuels and rising prices in the general cost of living….we have a vibrant future. I should mention that none of this will work out for the benefit of all if we do not have sound leadership in our local government. We need to have a local government that is focused on seeing many of these factors into fruition and not just consumed by petty politics, power grabbing and un-equitable squabbling. We must be united in culture and not divided in our vision. Our culture makes us vibrant and strong but I often fear it is also a factor that tears us apart as a community. Likewise, we need to have the right leadership at the national level in Washington, DC to help us achieve all of our economic capabilities. South Florida has a potential voice and influence in the Caribbean and Central and South American politics that can benefit the USA and these developing countries. We must be cognizant of this and exercise our unique knowledge and introspect towards moving Washington DC in the right direction. It’s safe to say Washington DC does not have a good foreign policy history. It’s very safe to say or simply to look back at how many businesses have come to South Florida and failed miserably simply because they didn’t understand the dynamics of our special populous. Along the way we need to make South Florida, more affordable so that we do not continue to widen the gap between the wealthy and the middle class. Many of the hardships, from our gateway partners are caused by just such an issue. Affordable and workforce housing will continue to be of utmost importance to our community. In addition transportation and education will be key drawing a population that will help achieve our local goals.
We will go through a variety of economic cycles. Those who stay and are aware of these cycles stand to gain from much opportunity. We are somewhat unique in our position and we might just be unique in the timing of history. Currently, we are in transition and we need to hope, pray and influence our leadership to invest in the future. We have unique economic variables and intangible drivers to our growth, our prosperity, our economy, our politics and how we live and see the future. We are SoFlo part of the Sunshine State!
By: Rene Velez (July 21st, 2008)
Good god, the bottom hasn’t even been reached and here I am writing about the next real estate boom in Miami. With 10 years of excess inventory in condominiums in downtown Miami and no one with a comprehensive answer as to how all those units will be absorbed. With rows of houses up for sale and a foreclosure rate that is keeping attorneys, banks and courts very busy why would I make a comment about the next real estate boom in Miami? I guess, it is inevitable that,……….. it will come. In fact I think it might come faster than what anybody may be willing to predict or admit. Yeah…I know it’s bad out there. For sure … I am not crazy and even the most pessimistic of economist will tell you….its just another cycle. But let’s not stop there. The reality is there is much about SoFlo (South Florida) that many have failed to really take in. In the end it adds up to a layer of insulation that SoFlo has. It’s something that few people get when they come here. In fact it’s something few people recognize on a daily basis even though we live here. We take it for granted. We hear of it. Yet somehow, the glare gets in our eyes and we don’t see it, the heat tires us until we can think no more. Then we start to sip on Cuba Libre, Mojitos or the local Margarita and suddenly it’s just not that important.
The Tropical Vibe
This is an element of the local life style that has in some way an insulating factor to the local economy. Certainly, this is not an economic factor that you would learn in a Harvard, Princeton or Yale economics class. But you might hit upon it at Florida International University or University of Miami. We have a certain Tropical Vibe and culture. Sometimes it shifts completely into the island mentality time zone but, if for no other good reason, only because we are attached and part of the upper 48 we maintain some sense of formality. Yes we have a Tropical Vibe. It’s in the food we eat, the cloths we wear, the warmth of the air. It’s in the way we relax and in the partners we attract. It’s in the sun on our faces and shoulders. We are a beautiful people in a beautiful place. The sun shines bright and the seasons soft and subtle. Yes this is an important variable as to why we do well. Everyone wants to be here. Everyone wants to live on vacation. So in the long run people will continue to come.
Value
Here is a term that most economist understand. We have “VALUE”! Yes it’s gotten very expensive to live here. I know that. In fact I am not sure how some manage. I am not sure how I manage. But here is something to consider. Go anywhere else in the USA, or internationally and find a place where you are 8 miles from the beautiful Caribbean waters and still find a home for less than $600,000. In a nutshell even expensive ocean front property is still a relative bargain considering its year round utility in a subtropical climate. So people will continue to come. We have “Value”!.
Culture
When I came here in 1976 from New York, I always new Miami had culture. Not in the New York kind of way, but you know, there was a way and a method to this place, and there were identifiable ethnic and cultural traits that gave Miami a culture. Today…..the scene is exploding. We have the Arts! We are in fact a metropolis recognized throughout the USA and the World. We have good food and dining. We have hotels. We have major universities. We have the people. People from all over the Caribbean, Central and South America, The USA, Europe, Asia and Canada. We are a cultural melting pot. We have glamour and the not so glamorous. We have baseball, hockey, basketball, football. We have festivals, air shows, auto racing, regattas. We have politics, trade, travel and tourism, music and cinema. We have a culture and a life. Hence people will come.
The Underground Economy
That’s right …….what no one in Miami wants to speak of. We have an underground economy. No one knows for sure how much, but it’s been here for decades scratch that “centuries”. Slave labor, rum running, drugs etc. etc. Today, we don’t have slave labor or rum running although some may argue that point, we have flight capital and offshore banking. This is money that comes to or through South Florida due to economic and political risk in the Caribbean and Central and South American countries, finds its way here and into our local economy. For sure we have some drug money also. Somehow, this adds to the economic stability of our local economy. I admit it is an ugly and seedy side of this economy but everybody has trash.
Retirement Stability Factor
People have been coming here for years for the warm weather and easy seasonal transitions. It’s easier on the bones and the subtle seasons makes life more pleasing. Sunshine is happiness and a good life. Yes. We need to give more credit to those retired folk who live on a fixed pensions, pay their taxes, spend a lot of money in healthcare goods and services and help stimulate the economy. Let’s also not forget the wealthy counterparts who come here to soak up the sun, play on our golf courses and eventually move into the varied assisted living facilities and nursing homes. This economic factor is not only stimulating but stabilizing in our local economy.
Gateway to the Americas
Here is a slogan I have heard often over the years. It’s time to really capitalize on this. No doubt that because of our inherent proximity to the Caribbean, Central and South America we are in fact the gateway to these countries. We have historically, benefited from this fact. Perhaps more so because we have a ready, willing and welcoming participatory population of Hispanics and culture that is very inviting to trade and business. Many of these countries are still developing countries. This essentially translates to further development and opportunities for business. There are many challenges in making this more of a robust and symbiotic relationship but the makings are already there. Although there are other states competing for this business, Miami is the ideal location for the furtherance of economic ties and for trade and tourism. Although I suspect the development of many Caribbean, Central and South American countries will take a long time I can see that many companies will choose to have their headquarters in south Florida. For this reason, this is a long term stabilizing factor and an opportunity to attract more business and population density into the area in years to come.
Conclusion
Here in South Florida we have many challenges ahead of us. Despite our economic melt down in the credit markets, overdevelopment in real estate, rising price of petro fuels and rising prices in the general cost of living….we have a vibrant future. I should mention that none of this will work out for the benefit of all if we do not have sound leadership in our local government. We need to have a local government that is focused on seeing many of these factors into fruition and not just consumed by petty politics, power grabbing and un-equitable squabbling. We must be united in culture and not divided in our vision. Our culture makes us vibrant and strong but I often fear it is also a factor that tears us apart as a community. Likewise, we need to have the right leadership at the national level in Washington, DC to help us achieve all of our economic capabilities. South Florida has a potential voice and influence in the Caribbean and Central and South American politics that can benefit the USA and these developing countries. We must be cognizant of this and exercise our unique knowledge and introspect towards moving Washington DC in the right direction. It’s safe to say Washington DC does not have a good foreign policy history. It’s very safe to say or simply to look back at how many businesses have come to South Florida and failed miserably simply because they didn’t understand the dynamics of our special populous. Along the way we need to make South Florida, more affordable so that we do not continue to widen the gap between the wealthy and the middle class. Many of the hardships, from our gateway partners are caused by just such an issue. Affordable and workforce housing will continue to be of utmost importance to our community. In addition transportation and education will be key drawing a population that will help achieve our local goals.
We will go through a variety of economic cycles. Those who stay and are aware of these cycles stand to gain from much opportunity. We are somewhat unique in our position and we might just be unique in the timing of history. Currently, we are in transition and we need to hope, pray and influence our leadership to invest in the future. We have unique economic variables and intangible drivers to our growth, our prosperity, our economy, our politics and how we live and see the future. We are SoFlo part of the Sunshine State!
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1 comment:
Great work.
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