Is Miami the most promising metro area in the U.S. right now?

December 18, 2024

Is Miami the most promising metropolitan area in the U.S. right now?

We think so. The Miami metropolitan area is currently ranked 12th in the nation based on gross domestic product (GDP). The rise of Trump, the rise of Florida, and the rise of the Southeast region gives us a good feeling about the prospects of the Miami metro area outpacing other metropolitan areas in terms of economic growth in the next 5 years. We are looking into what objective factors may contribute to this subjective opinion. That would be material for future posts as we continue processing general information and developing commercial intelligence. 

In this post we look at some economic figures and browse over the history of the Miami area. 

Current Economic Ranking

As of December 2024, the Miami metropolitan area ranks #12th in the U.S. by Gross Domestic Product (GDP).

1. New York-Newark-Jersey City, NY-NJ-PA: Approximately $2.299 trillion.
2. Los Angeles-Long Beach-Anaheim, CA: Approximately $1.295 trillion.
3. Chicago-Naperville-Elgin, IL-IN-WI: Approximately $894.9 billion.
4. San Francisco-Oakland-Berkeley, CA: Approximately $778.9 billion.
5. Dallas-Fort Worth-Arlington, TX: Approximately $744.7 billion.
6. Washington-Arlington-Alexandria, DC-VA-MD-WV: Approximately $714.7 billion.
7. Houston-The Woodlands-Sugar Land, TX: Approximately $697.0 billion.
8. Boston-Cambridge-Newton, MA-NH: Approximately $610.5 billion.
9. Atlanta-Sandy Springs-Roswell, GA: Approximately $570.7 billion.
10. Seattle-Tacoma-Bellevue, WA: Approximately $566.7 billion.
11. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD: Approximately $557.6 billion.
12. Miami-Fort Lauderdale-West Palm Beach, FL: Approximately $533.7 billion.

Miami Area Real Estate: Steady Appreciation in the Last Decade 

Miami's real estate has come a long way from its swamp background to its current popularity as a luxury playground. Historically, Miami's real estate has been bubbly, but has continued trending upwards in the long run. Over the years and decades, Miami's real estate has seen its ups and downs, with times of significant appreciation followed by corrections after excessive speculation. and times of  expansion based on aggressive speculation. 

During the 1920s, Miami experienced a significant real estate boom, with land prices escalating rapidly due to intense speculation and development. While specific per-acre prices are scarce, the general trend indicates substantial appreciation during this period. For instance, in the early 1920s, an elderly man in Pinellas County invested his life savings of $1,700 in a piece of property. In just 5 years, by 1925, the value of this land had soared to $300,000, illustrating the dramatic increase in land values during the Florida land boom. This meteoric boom was followed by a catastrophic collapse, a big bust in the late 1920s and during the Great Depression. 

In the last decade, Miami's real estate has performed strongly and is not yet too bubbly. In the decade from 2014 to 2024, Miami's single-family home prices increased by approximately 156%, with median prices rising from $250,000 to $640,000. Condominiums saw a 128% increase in median prices during the same period, climbing from $182,000 to $415,000. Overall, in that 10-year span, Miami's real estate reportedly appreciated by 190%, averaging an annual appreciation rate of 11.2%. Every $100 invested in Miami's real estate in general 10 years would be worth $290 today.  

For comparison purposes, over the same period of time, in the past decade, the S&P 500 has delivered an average annualized return of approximately 13.05%. $100 invested in the SS&P 500 in 2014 would be worth around $340 today. Meanwhile, in the same 10 years, the dollar lost 30% of its purchasing power. For what you could be for $100 ten years ago, you would need $130 today.

It's important to note that the future has not been created yet. Past financial performance is by no means indicative of future performance. Future performance can vary greatly due to market volatility, economic conditions, and other factors. In the case of Miami's real estate, another financial crisis, a hurricane, a "civil war" in the United States, and many other unknown factors could mean a disastrous financial performance. Investors should consider these variables when making investment decisions.

Miami Metro Area: Three Counties Pushing For Continued Economic Growth

Let's continue learning some basic facts about the Miami metro area. The Miami metropolitan area includes three counties in southeastern Florida. 

1. Miami-Dade County:

• Miami (the largest city and cultural/economic hub)
• Miami Beach
• Coral Gables
• Hialeah
• Doral
• Aventura
• Homestead
• Key Biscayne

Key Features: Diverse population with strong ties to Latin America and the Caribbean. Economic sectors include international trade, tourism, finance, and technology.

2. Broward County:

• Fort Lauderdale (known as the "Venice of America")
• Hollywood
• Pembroke Pines
• Coral Springs
• Miramar
• Plantation
• Weston

Key Features: Popular for beaches, boating canals, and the Fort Lauderdale-Hollywood International Airport. A mix of residential and commercial developments.

3. Palm Beach County:

• West Palm Beach
• Boca Raton
• Delray Beach
• Boynton Beach
• Wellington
• Palm Beach
• Jupiter

Key Features: Known for luxury living, equestrian events, and upscale communities. Strong tourism and real estate markets.

Miami's Diverse Population and Strong Economy

• Population: As of 2024, the Miami metropolitan area is home to over 6.3 million people, making it the seventh-largest metro area in the U.S. by population. The area is known for its rich cultural diversity, with significant Hispanic, Caribbean, and international communities.

• Economy: The region's economy is diverse, with strengths in international trade, tourism, real estate, healthcare, and financial services. The Miami metropolitan region ranks 12th based on gross domestic product (GDP) in the United States. Key transportation hubs include Miami International Airport, Fort Lauderdale-Hollywood International Airport, and Port Miami (a major cruise and cargo hub).

Brief History of Miami

Miami, located in southeastern Florida, is one of the most vibrant and dynamic cities in the United States. Its history spans centuries, from early Native American settlement to its rise as a global cultural and economic hub.

The region was originally inhabited by the Tequesta people, who lived in the Miami area for over 1,000 years before European contact. They thrived on fishing, hunting, and gathering, with settlements near the Miami River.

In 1513, Spanish explorer Juan Ponce de León arrived in Florida's east coast after sailing from San Juan, Puerto Rico. The first Spanish settlements in the Miami area were part of Spain's broader exploration and colonization efforts following Juan Ponce de León's arrival from Puerto Rico. These early settlements were small and primarily military or missionary in nature, as Spain sought to expand its influence, colonize the land, exploit locals, and convert them to European Christianity.

• Fort San Marcos (1567): The Spanish established a small fortified settlement near the mouth of the Miami River in 1567. This fort aimed to protect Spanish interests and facilitate missionary work among the local Tequesta people. Alongside the fort, Spanish Jesuit missionaries built a mission to convert the Tequesta tribe to Christianity. The mission faced challenges, including resistance from the Tequesta and a lack of supplies. It was abandoned after a short period due to limited success and isolation.

• Approximately 200 years later, in 1743, another attempt at missionary work occurred when Spanish Franciscans established another mission near the Miami River. This mission was also short-lived, primarily due to resistance from the local population and the harsh environment of the Miami swamp.

These early and unsuccessful Spanish settlements marked the beginning of European presence and influence in the Miami area. The name of the area itself is derived from the Spanish version of the name Mayaimis, name of the native people of the region. Spain maintained nominal control over Florida until 1763, when it ceded the territory to Britain. Spain regained control of Florida in 1783 before ultimately transferring it to the United States in 1821.

Miami in the 1800s

After Florida became part of the U.S. in 1821, settlers, including landowners and freed African Americans, began moving to the Miami area. The Second Seminole War (1835–1842) displaced many of the area's indigenous Seminole people from the region.

In the 1890s, Julia Tuttle, a wealthy citrus grower, played a crucial role in Miami's development. Ms. Tuttle convinced Henry Flagler, the railroad tycoon that had began to develop the St. Augustine area, to extend the Florida East Coast Railway to Miami by donating land and promoting the area's potential.

In 1896, Miami was officially incorporated as a city, with a population of around 300 people. Miami quickly became a popular destination for snowbirds (winter tourists) in the early 1900s. The construction of hotels and resorts, along with Flagler's railway, boosted the local economy.

Miami in the Early 1900s

The 1920s saw a real estate boom, attracting developers and investors. However, the 1926 Miami Hurricane and the Great Depression of the 1930s caused severe economic setbacks.

In the 1940s, during World War II, Miami began to see a resurgence after the federal government began investing in the area, which was considered of strategic importance as the southernmost border of the United States on the Atlantic coast.

Miami in the 1950s: Boom and Bust

In the 1950s, real estate developers began marketing the area as a sunny hotspot for winter vacations.  The development of air conditioning technology began to facilitate an influx of more permanent residents, including retirees and immigrants. Miami's population began to grow dramatically.

The 1950s were a transformative decade for Miami, characterized by a real estate boom driven by population growth, increased tourism, and speculative investments. This period marked Miami's evolution from a regional city into a major metropolitan area and tourist destination.

• Post-War Boom: After World War II, the U.S. experienced economic growth, with increased consumer spending and suburban expansion. Miami benefited from this national prosperity, attracting both retirees and middle-class families seeking warm weather and affordable living.

• Tourism Boom: Miami became a hub for tourism, with its beaches, luxury hotels, and vibrant nightlife attracting millions annually. Seasonal visitors spurred demand for vacation homes and hotels, creating opportunities for developers. Luxury Hotels and Resorts: Iconic hotels, such as the Fontainebleau and Eden Roc, opened in the 1950s, symbolizing Miami’s glamour and attracting wealthy visitors.

• Real Estate Development: Build it and they'll come. Developers and investors poured money into real estate, betting on Miami’s continued growth. Land prices skyrocketed as speculators bought and sold properties rapidly, often without plans for immediate development. Thousands of veterans and retirees moved to Miami, drawn by the G.I. Bill and the city’s reputation as a tropical paradise. Between 1950 and 1960, Miami’s population grew by over 50%, fueling housing demand. Advances in transportation, including the expansion of highways and the development of Miami International Airport, made the city more accessible. The improved connectivity boosted Miami’s appeal to both permanent residents and tourists. Neighborhoods like Coral Gables, Hialeah, and Kendall expanded significantly during this period. Single-family homes and modern suburban communities became popular as well as high-rise buildings, particularly along the coast.

The 1950s boom and real estate speculation frenzy led to an oversupply of residential and commercial properties. Speculative investors often abandoned projects when they failed to sell quickly, leaving unfinished developments. Financial bubbles created instability in the real estate market. While Miami’s growth continued, speculative excesses highlighted the risks of over-reliance on real estate.

The boom of the 1950s solidified Miami’s reputation as a tourist destination and real estate hotspot, laying the foundation for future economic growth. The suburban expansion and infrastructure improvements reshaped Miami’s metropolitan landscape. The city’s rapid growth in the 1950s attracted a diverse population, including early waves of Cuban immigrants, adding to Miami’s cultural richness.

Miami From the 1960s to the 1990s: Cuba, Colombia, Cocaine = Mucho Money

In the 1960s, Cuban migration marked and reshaped Miami. Following the Cuban Revolution in 1959, thousands of Cuban exiles fled to Miami, reshaping the city's culture and demographics. Fidel Castro's Mariel boatlift in 1980 brought an additional 125,000 Cubans to the city.

In the late 1970s and 1980s, Miami became a central hub for cocaine trafficking, profoundly impacting its economic development. The cocaine trade funneled billions of dollars into Miami's economy. This sudden wealth led to a real estate boom, with luxury condos, hotels, and nightclubs proliferating. The city's skyline transformed as drug money was laundered through construction projects and other investments. 

Local Miami banks experienced unprecedented growth due to the influx of illicit funds from the cocaine trade. Some financial institutions turned a blind eye to large cash deposits, indirectly facilitating money laundering. This period saw Miami's banks holding more cash than the Federal Reserve, highlighting the scale of the underground economy.

The drug trade created jobs, both directly and indirectly. Construction workers, real estate agents, and service industry employees benefited from the booming economy. However, this prosperity was unsustainable and came with significant social costs. The influx of cocaine led to a dramatic increase in violent crime. Rival drug cartels vied for control, resulting in numerous homicides and earning Miami the nickname "Murder Capital of the World." 

The era left an indelible mark on Miami's identity, influencing media portrayals and contributing to a glamorous yet dangerous image of the city. Films and television series such as Miami Vice drew inspiration from this tumultuous period, further embedding it into popular culture. By the 1990s, Miami had become a hub for Latin American immigrants, turning it into a multicultural and bilingual city.

Miami in the 21st Century (2000s to 2020s)

Miami has grown into a global center for finance, trade, tourism, and culture. It is home to significant industries such as real estate, technology, and international banking. It looks to become the cryptocurrency capital of the world.

Between 2000 and 2024, Miami's real estate market experienced significant fluctuations, characterized by periods of rapid appreciation, downturns, and robust recoveries.

• 2000-2007: Miami's real estate market thrived, with property values increasing due to high demand, particularly from foreign investors laundering money in Miami like in the 1980s. 

• 2008 Financial Crisis: The real estate market faced a downturn during the financial crisis, leading to decreased property values and high foreclosure rates. Miami was one of the epicenters of the real estate bubble that burst during the subprime mortgage crisis. Many homeowners saw significant losses in property value. 

• 2010-2019: Following the crisis, Miami's real estate market gradually recovered, with increasing home values and renewed investor interest. Positive net migration contributed to the market's growth, with Miami's population rising from approximately 399,457 in 2010 to over 442,241 by 2020, surpassing the national average growth rate. 

• 2020-2024: The COVID-19 pandemic influenced market dynamics, with increased demand for properties in Miami due to factors like the lack of lockdowns in Florida, remote work flexibility, warm climate, and favorable tax policies.

Miami and the Second Coming of Trump: Crypto Capital of The World?

Miami has actively pursued the goal of becoming a global hub for cryptocurrency and blockchain technology. Miami has hosted significant cryptocurrency events, such as the Bitcoin 2021 conference, attracting industry leaders and enthusiasts worldwide. The city has successfully attracted cryptocurrency companies to set operations in Miami. This influx has been supported by favorable regulatory environments and private banking investments.

Now, as with almost everything else in our current economy, the most significant development for Miami's crypto dreams comes from the re-election of Donald Trump. Trump's stance on cryptocurrencies has evolved significantly over time, transitioning from skepticism to active endorsement and involvement. Trump's sons are heavily involved in the crypto trade and the Trump Media and Technology Group (ticker: DJT) is said to be looking to expand into crypto.

Trump has "evolved" over years regarding cryptocurrencies. He's beginning to see money-making potential for the Trump family in the crypto sphere.

• 2019: Trump expressed his disapproval of Bitcoin and other cryptocurrencies, stating, "I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air." 

• 2021: Trump reiterated his skepticism, labeling Bitcoin as a "scam" competing against the U.S. dollar. 

• 2024: During his presidential campaign, Trump reversed his earlier position, pledging to make the United States the "crypto capital of the planet" and expressing support for Bitcoin and other digital assets. Coincidentally, in September 2024, Trump launched World Liberty Financial, a cryptocurrency exchange founded by his sons, Donald Trump Jr. and Eric Trump. The venture aims to position the U.S. as a leader in the crypto space. Trump proposed the creation of a U.S. strategic Bitcoin reserve, akin to the strategic gold and oil reserves, to strengthen the nation's position in the global cryptocurrency market. 

Trump appointed David Sacks as the White House AI and crypto "czar," signaling a commitment to fostering innovation and regulatory clarity in the crypto industry. 

Trump has nominated Paul Atkins to serve as the next Chairman of the U.S. Securities and Exchange Commission (SEC). 

• Atkins is a former SEC Commissioner, having served from 2002 to 2008 under President George W. Bush. He is also the CEO of Patomak Global Partners, a consulting firm with clients in the cryptocurrency industry, Atkins is known for advocating reduced regulatory burdens and promoting financial innovation. He has been a vocal supporter of free-market principles in regulatory policy.

• Atkins has been a proponent of cryptocurrencies and blockchain technology, emphasizing the need for clear and balanced regulations to foster innovation while protecting investors. His nomination is seen as a shift towards a more crypto-friendly regulatory environment. 

• Atkins' appointment aligns with President-elect Trump's recent support for cryptocurrencies, including initiatives to integrate digital assets into the U.S. financial system. The cryptocurrency industry has responded positively to Atkins' nomination, anticipating a more accommodating regulatory approach under his leadership. 

Florida's Rise Can Only Help Miami

Over the past decade, Florida has experienced significant economic growth, solidifying its position as one of the leading state economies in the United States.  Florida's economy is bolstered by various sectors, including tourism, agriculture, aerospace, and financial services, contributing to its resilience and growth. 

• Florida's real GDP grew from approximately $1.22 trillion in 2013 to about $1.28 trillion in 2023, reflecting consistent economic expansion. 
• In 2023, Florida's real GDP increased by 4.3% compared to the previous year, indicating robust economic performance. 
• Florida's private sector job growth rate has consistently surpassed the national average. For instance, in May 2024, the state's private sector employment increased by 2.2% year-over-year, compared to the national rate of 1.6%. 
• As of 2024, Florida's unemployment rate has remained around 2%, consistently below the national average, reflecting a strong labor market. 
• Between 2010 and 2020, Florida's population growth ranged from 1.0% to 2.0% annually. In 2022, the state's growth rate was 1.9%, making it the fastest-growing state in the nation. In 2023, Florida reported a record state budget surplus, indicating strong fiscal health and effective economic management. 

These indicators highlight Florida's economic ascent over the past decade, characterized by substantial GDP growth, low unemployment rates, population influx, and strong fiscal health.Miami faces environmental challenges, including rising sea levels and hurricanes, which have spurred efforts in sustainability and urban planning.

Growth in The Southeast Can Only Help Miami

Over the past decade, the Southeastern United States has experienced notable economic growth, often outpacing national averages across various metrics.

Population Growth:

• Accelerated Growth Post-Pandemic: Between 2019 and 2022, the Southeast's population growth rate exceeded the national average by more than double, indicating a significant migration to the region during the pandemic. 

Job Growth: 

• Since early 2020, the Southeast has accounted for over two-thirds of all job growth in the U.S., nearly doubling its pre-pandemic share. The region is home to 10 of the 15 fastest-growing large American cities. 
• Over the past 30 years, the Southeast has seen significant shifts in manufacturing employment, with certain divisions like the South Atlantic experiencing expansion, while others have faced declines. 

Income Growth:

• Personal Income: From 1958 to 2023, the Southeast's real total personal income increased by approximately 1,038%, surpassing the national growth rate of 677% during the same period. 

• Household Incomes: In 2015, Southeastern states such as Alabama, Florida, and Georgia saw substantial growth in household incomes, aligning with national trends. Tennessee, in particular, experienced a 6.1% increase, the second-highest in the country. 

These indicators underscore the Southeast's robust economic performance over the past decade, marked by population influx, employment gains, income growth, and substantial business investments, contributing to its dynamic and expanding economy.

Overall, the economic outlook for the Miami metropolitan area looks promising and strong. 

Now you know it. 

Creatix is a commercial intelligence matrix. On the web at www.creatix.one