Only 11 Percent of Miami Home Values Have Recovered Postrecession, and the Poor Are Getting Screwed
Wyn Van Devanter via Flickr Creative Commons
Do-nothing, intellectually bankrupt politicians often refer to Miami as a "boom-and-bust" town. The city's economy, which is almost entirely based on real-estate trades, rises and falls rapidly, they say. It expands as foreign investors flood the market with cash and crashes once that river of money dries up, which tends to happen overnight and without warning. Natives shrug off the idea. If Argentine investors stopped buying condos today, the economy would boom again next month, when the exchange rate is favorable to the Turkish lira or Paraguayan guaraní.
But this General Theory of Employment, Interest, and Miami ignores an extremely basic rule of economics: Not all booms and busts are the same. And if a good thing goes sour, there's no guarantee it'll ever bounce back quite as high.
A new study released Tuesday by the real-estate analyst website Trulia shows why slow recovery is a problem in the Magic City. Only 11 percent of the city's home values have rebounded to where they were before the Great Recession laid waste to the city's real-estate market, the study contends. And, according to a zip-code-by-zip-code breakdown of the data, Miami's poorest communities, such as Liberty City and Overtown, have been hit hardest.
According to Trulia, Miami's median home value hit a prerecession peak of $331,864 before the bust. Now, nearly a decade later, it's only $247,180. Compared to the rest of the nation, Miami is doing slightly better than average: The city's recovery percentage — 10.8 percent of homes — is good for 31st in the nation. (Just 2.7 percent of Fort Lauderdale homes have returned to their precrash values, the sixth-worst recovery in the nation.)
But when broken down by zip code, the data shows just how hard Miami's poorest communities were hit by the housing crash. Many of the city's wealthiest areas, such as South Beach and the booming downtown, have largely recovered. In Miami Beach's two southernmost zip codes, 33140 and 33139, 49 percent and 40 percent of house values have recovered, respectively.
The same goes for much of downtown. In 33137, which encompasses Edgewater, the Design District, and Wynwood, 46 percent of houses are worth their prerecession price.
But parts of Overtown, Liberty City, Little Havana, and South and West Miami-Dade haven't quite seen the same level of recovery. In 33135, a long rectangular area that covers most of the famous blocks on Calle Ocho, only 2 percent of houses are worth what they were worth in 2007. In 33136, where part of Overtown sits, just 5 percent of values bounced back. In the adjacent 33128, just 3 percent. In 33142 and 33147, in Liberty City, Brownsville, and parts of Allapattah, only 2 percent of homes recovered.
And in many of those neighborhoods, such as 33153 in Little Havana and 33147 in Liberty City, properties are worth close to $100,000 less than they were a decade ago. South Beach houses lost only about $12,000.
The rates are similar for most communities west of I-95:
A handy zip code map for you.
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That means the recession burned up the savings of Miami's poorest and most defenseless populations. Sure, one could argue that the city's housing market was inflated and that most homes were overvalued. But try telling that to people who sank their savings into a mortgage that, ten years later, is still underwater. Meanwhile, the city's jet-set class appears to be doing just fine (or at least closer to fine) after Miami was hit harder in the recession than all but 17 cities worldwide.
These, then, are the real costs of living in a "boom-and-bust" town: If you aren't part of the city's wealthy class, your net worth might evaporate at any time. And it might never come back.
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