Miami Differs Greatly from Other Housing Markets

It is argued that Miami has become the Gateway to the
Americas, economically, politically, culturally, and practically. How is this so? The answer is simple: Miami already is a miniature version of the Western Hemisphere. Why is this important? Well, it means that it is a city version of all of Latin and North America, and is therefore an advantageous base of operations for international firms looking to do business on a hemispheric scale. The Western Hemisphere is multi-lingual, but Spanish and English dominate. English, mostly in North America. Spanish, mostly in South and Central America, parts of North, and largely in the Caribbean. So what does it mean to be a smaller version of the Western Hemisphere, and how is that relevant to Miami’s real estate market? Basically, it means that doing business and investing in Miami is quite different from other major cities in the hemisphere, and national housing market trends don’t always apply to Miami’s real estate market. Understanding this requires analysis. Miami’s demographics are truly unique. Every single country in the Western Hemisphere represents itself in force. Unlike most other major U.S. metropolises, Miami’s diverse community represents, in large numbers, every Latin American country in the hemisphere. The city is therefore the best test market for that market segment in the world*. Being in Miami means that you are surrounded by large Venezuelan, Colombian, Peruvian, Nicaraguan, Argentinean, Cuban, Dominican, Puerto Rican, Haitian, Bahamian, Guatemalan, and Ecuadorian communities. I left out several others. I challenge anyone to name another U.S metropolis like it. Over half of Miami-Dade county’s population can speak Spanish. That’s good news for anyone from South and Central America, as well as the Spanish-speaking Caribbean. If they want to come to the United States, they can go to Miami and speak their native language freely. Try that in Atlanta, Houston, or Chicago, and it just won’t work. There are few bi-lingual barriers in Miami. Even the Portuguese-speaking Brazilians find it easier to communicate among other Spanish speakers. This doesn’t mean that Miami is a foreign city based out of the United States. It just means that, at times, it can feel like one. Some like to call it the Banana Republic. Now, most are opting for the title Gateway to the Americas, and rightly so. How did this all begin? With Geography and a Communist revolution. Cuba lies just 90 miles to the south of the Florida coast. The Cuban exiles fleeing Castro’s Communist revolution had to think practically. They had to leave and they weren’t planning on going far. Most went to Miami. This inflow started in 1959. Although Cuban exile activity had been taking place for generations throughout Florida, this time the whole Cuban bourgeoisie was looking to flee north to liberty. It began with a trickle and turned into a deluge of Cuban immigrants. The traditional southern U.S. city was hard pressed to have to deal with such a refugee crisis. The state and federal governments were also alarmed. To have such a large, growing community of foreign immigrants concentrated in one U.S. city was unprecedented. Methods were taken to provide incentives for Cuban immigrant families to move north and find jobs outside of Miami, but they would just leave temporarily, make money, and return. By 1962, Americans feared the growing uncertainty brewing 90 miles south of the U.S. When it became clear that Cuba, assisted by the Soviets, was aiming nuclear missiles at the U.S., the country viewed the Castro threat differently, and Miami’s growing immigrant population got little attention in Washington D.C. Meanwhile, the Cuban community in
Miami grew larger everyday. The first immigrants to arrive were the most educated and well-off. Many opened businesses. The Cubans bought from the Cubans. Cubans hired Cubans. Cubans loaned money to Cubans. And did everything, in Spanish. This didn’t sit well with the local Anglo-establishment. Their independence and propensity to speak a foreign language seemed insolent. These initial Cuban immigrants created the foundations of their independent economic enclave and the successive waves of new immigrants sustained it by providing a growing buyers market and work force. They had, however, no political power and were therefore at the mercy of the political establishment. Nevertheless, the continued growth of the Cuban economic enclave would permanently establish Spanish as a language of business and commerce, although the political establishment would attempt to destroy it. The line was drawn in 1980 when Fidel decided to allow thousands of Cubans to leave his country. City authorities passed legislation that made it illegal to speak Spanish when doing business. The very fabric of this future gateway to the Americas was threatened. The initiative was successfully combated by the immigrant community and overturned. Gradually, the immigrant community turned to politics and began to win the mayoral election of several municipalities including Miami and Dade county, as Anglos began to leave the area. During the eighties large streams of Nicaraguan immigrants began flowing into the city, creating the second significant Latin immigrant wave. By 1994, the immigrant inflow from Cuba and Nicaragua had largely subsided. Immigrant inflow was streaming in from other Latin American countries. By then, Miami and Dade county had a huge Spanish-speaking population. As time passed, it would grow in numbers and diversity. Today, Miami’s Spanish speaking foundation is stronger than ever. Latin Americans from every country call the city their home. Miami has become a Latin American melting pot unlike any other the hemisphere has witnessed. Colombians and Venezuelans have established large, prosperous communities. The Argentineans, with there business ingenuity, have contributed generously to the fold. Central Americans abound, and Mexicans are the fastest growing immigrant community. This truly bi-lingual metropolis is a natural starting point not just for Latin immigrants, but businesses looking to focus on Latin America markets as well. Miami’s real estate market has alot more going for it than meets the eye. While housing markets throughout the country are teeter tottering on the brink of collapse, Miami’s is barely being affected. The profound investment interest in
Miami is in many respects international and multi-faceted, unlike one-dimensional
Las Vegas. Miami transcends national trends. The Europeans are not interested in U.S. domestic housing market trends. They are interested in the culture, lifestyle, diversity, and economic opportunities that Miami continuously affords them, not to mention the value of the Euro over the dollar. Jews from throughout the hemisphere are choosing Miami over Israel as the place to raise their children. Canadiens, known as snow birds because they usually arrive in the winter, have long been interested in living in the area, and are becomming increasingly permanent residents. The point is that Miami is different from all the other real estate markets in the hemisphere. Over half of the city’s population is foreign-born–the most in the world. In Miami, the weight of the entire hemisphere with all its issues, dillemmas, culture, and music, is felt the most. Miami sets real estate trends, and is rarely influenced national trends. After all, it makes sense, since when can Miami be compared to other U.S. cities? Not today, not tommorow, nor anytime in the near future. Some important statistics that further illustrate Miami’s growing divide between itself and other hemispheric cities is provided by the Beacon Council.

Post Script: It is no coincidence that company’s like the Paris-based Richmont Group–owners of Cartier, Mont Blanc, Piaget, Dunhill, Baume and Mercier, among other luxury brands–as well as LVMH, owners of Louis Vuitton, have decided to base their Latin American headquarters out of Miami. Other companies with regional Latin American headquarters in Miami include: American Airlines, American Express, AOL Latin America, Black & Decker, Canon, Cheveron/Texaco, Cisco Systems, Delta Airlines, Disney, Exxon Mobil, FedEx, HBO, Hewlett Packard, IBM, Johnson & Johnson, Kraft Foods, Microspft, Motorola, Olympus, Porshe, United Airlines, VISA International, Volkswagon, among others.

 

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Filed under BoB Articles, Economy, The Big Picture

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