The Miami Neighborhood Economic Health Meter | An Exclusive New Tool to Measure Your Area’s Economic Health

Changes in Sales Prices per SF 

Ratio of Owners to Renters

The ratio of owners to renters is important as this is like your body’s immune system. Neighborhoods occupied mostly by home owners (primary markets) tend to be healthier than markets occupied by renters. Imagine an economic crisis, would you sell your primary property, where you live with your family? Or would you first sell your investment property? Investment-based markets tend to suffer most from economic turmoil and therefore it is important to know the owner to renter ratio in order to establish a health score. Primary markets have a better immune system than investors-based markets.
This number is calculated by dividing the amount of active sales by the amount of active rentals.

Months of Inventory for Rentals

The months of inventory is a very important indicator in real estate. It shows the relationship between supply and demand and therewith it indicates how fast a market can digest or absorb product. It is important for the sales market but also for the rental market. This is basically the market’s metabolism. If a market cannot absorb new listings for rent, this would be equal to a slow metabolism in the human body. The more bloated we get, the less we can burn, which adds to one’s decreasing metabolism.
Months of Inventory are calculated by dividing the current amount of listings by the average amount of rentals per month (Based on the last 12 months). The final amount of months of inventory was then given a score on a metric scale between 0 and 100