Miami Emerges as the Newest Tech Epicenter
The epicenter of technology is moving rapidly, right here to our backyard of Miami. Former Silicon Valley residents are drawn to our city not just because of the natural “zoom background”, as said by Mayor Francis Suarez but also because of the many financial incentives that Miami offers their tech companies. San Francisco and Silicon Valley have quickly become old news as many flock to the low corporate taxes, cheap city taxes, and zero state income tax that Miami offers. The tax rate for corporations in California is 8%, while Miami hangs at just 4%. This offers a huge break for these mega companies looking to grow.
Draw of Lower Crime Rates
When tech investors that moved to Miami were interviewed they noted another specific reason that they moved from the Bay Area to Miami, the crime rates. When looking at the Bay Area burglary rates were up over 20% in 2019 and theft up 11%. However, when viewing Miami in 2019, the overall crime rate was down 19.2%. Many of these tech investors felt that the new tech buzz and the safety that Miami provided would allow them stability to root in South Florida.
Mayor’s Promises to Incoming Residents
This buzz of the Miami tech community is even credited to Suarez as he quoted a tweet by Founders Fund venture capitalist Delian Asparouhov. Asparouhov tweeted “ok guys hear me out, what if we move silicon valley to miami” to which Suarez responded, “How can I help?”. Since then, Suarez has been holding up his end in encouraging the move of Silicon Valley to Miami, as he emphasizes that he will be responsive to the needs of the tech headquarters and even provide Miami’s first ever concierge service to cater to these tech hubs.
Effects on Real Estate
So what does this mean for local real estate? Well, we have already seen a huge influx of buyers in the Coral Gables, Coconut Grove and Pinecrest area, with inventory dropping 88% from 2020. Sales in Coral Gables have increased 153% from 2020 to the first half of 2021, with waterfront homes being a driving part of this number. Coconut Grove saw an increase of 170% with properties in the 3M-5M price range making up most of this percentage. Sales in the Pinecrest area have increased upwards of 110%, with a majority of that number coming from homes over 5M. This segment of homes has grown 600% since 2020, and as the rush of people come in from California, these homes are selling at a price that they never have before.
Sources: Miami CBS Local, Forbes, Luxury Home Marketing