How tech can help Miami’s real estate market bounce back from COVID-19

by Meg White

As a great deal of commerce has swiftly moved online to cope with coronavirus pandemic-related shutdowns, the local economy — and by extension, the real estate market — will depend upon technology to dig out of its current hole. How prepared is Miami to accomplish that?

Image: STORAGECafé. Click for larger view.

A new analysis by STORAGECafé, a storage space marketplace built by real estate data firm Yardi, looked at how well networked certain regions of the country are — as well as how ingrained technology is in their local economies — to get at this question.

As any real estate professional knows, a booming local economy will lead to a more robust real estate market. Companies that are providing the digital tools we need to keep remote work going are expanding during this crisis, so it makes sense that areas where more people work in the tech sector could bounce back faster if these jobs are more plentiful during a time of record-high unemployment.

Florida ranked 13th in terms of overall tech industry employment, with 6.2% of its workforce in the tech sector, an industry that contributes to 7.8% of the state’s GDP.

As Chris Nebenzahl, institutional research manager at Yardi Matrix, noted, the local economy and real estate market are concentrated in other industries. “Miami has a very big leisure and hospitality sector; but more than that its real estate sector is driven off of international investment and specifically Latin American investment. In a time when it’s much more difficult to travel and tourism is severely impacted, Miami will most likely be hurt from that,” he noted in the STORAGECafé report.

Indeed, Diego Comin, a professor of economics at Dartmouth College, noted that certain economies like Florida’s will find it harder to adapt to a digital economy due to the sectors they serve. “This will impact very much on the potential for digitalization of production and consumption,” Comin said in the Storage Cafe report. “Transportations hubs (e.g. Atlanta, Dallas) or sectors where tourism is key (e.g., Florida, Hawaii) will be impacted due to the inherent difficulties to digitalize the production and consumption of these services.”

With many jobs moving partially or wholly online in the wake of COVID-19-related shutdowns, it’s also important that residents have reliable internet access and hardware. This may cause immigration to certain areas where workers are now allowed to work remotely 100% of the time.

Florida ranked 20th in terms of the personal availability of technology in the report, with 89.8% of households owning a computer and 88.1% reporting an internet subscription. Of course, just being connected to the internet won’t always be enough to run virtual meetings. Thankfully, the state ranked a bit better when it comes to overall connectivity; Florida came in 16th, reporting 94.9% broadband coverage.

Statewide data does have its drawbacks when it comes to technology coverage, though. “What the pandemic has laid bare is how stark are the contrasts in readiness between urban and suburban areas within states,” Lee W. McKnight, associate professor at Syracuse University’s School of Information Studies, said in the report. “Inner-city, low-income neighborhoods are also badly underserved and not digital economy-ready. Since they either don’t even have the underlying infrastructure needed to access and work in the digital economy, or even if they do, many do not have the income or personal technology, education and training required. We tend to forget, but half the world’s population is not on the internet yet.”

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