Living in Miami will empty your wallet. See where the area’s cost of living is nationally


In the three years since Covid-19 hit the United States, South Florida has stood out, attracting new residents and new wealth. In January, it received another accolade, confirming that living here really does cost an arm and a leg.

The Miami metropolitan area had the largest increase in the cost of living among the largest US cities, according to the latest Consumer Price Index report from the US Bureau of Labor Statistics. It reflects the harsh daily reality for many locals who work outside of tech, finance or law — fields that pay many workers six-figure salaries and head-spinning annual bonuses.

“The more people came to town, the more expensive things became,” Rodolfo Crisanto, a 24-year-old downtown barber who has lived here most of his life, lamented outside his shop recently. “It’s a lot more expensive to go to Miami than it used to be.”

Consumer prices in the Miami, Fort Lauderdale and West Palm Beach area rose 9.9% for the 12 months ending in December, the highest rate among the 14 largest metro areas. Phoenix was second with 9.5 percent and Seattle third with 8.4 percent. New York-New Jersey and the San Francisco Bay Area, the two sources of new Miami residents, fared much better, with 6.3% and 4.9%, respectively.

Miami’s inflation rate in 2022 also exceeded the national rate of 6.5 percent.

“You can put it down to the housing market,” said Greg McBride, vice president and financial analyst for, a national financial information provider based in West Palm Beach.

On Wednesday, Federal Reserve officials are expected to raise the central bank’s benchmark interest rate by a quarter of a percentage point, from 4.25 percent to 4.5 percent. As inflation has slowed nationally in recent months, Fed officials are likely to respond with smaller rate hikes this year than in 2022.

The most important price factor for apartments

Living in the Miami area is the main culprit behind the cost of living increase last year, according to economists, but food and energy prices also rose. The latest government report brought some relief to the residents. Miami’s annual inflation rate of 9.9 percent in December for all items was below the August 2022 peak and has declined in each of the following four months.

READ MORE: What Miami-Dade Home Buyers and Renters Will Expect in 2023?

Still, the increase in prices for all items except food and energy in the Miami metro area, called the consumer price index, which some economists consider a better indicator of inflation, rose 10.4% over the past 12 months, peaking in December. for at least the last three years, suggesting that tough times are ahead. National core inflation was almost half of that at 5.7%.

In South Florida, “inflation is starting to go in the right direction, but there’s still a long way to go,” McBride said, reflecting on the downward path for consumer prices.

The consumer price index measures the average price change over time that urban consumers pay for a basket of consumer goods and services.

In the Miami area, cereal and dairy products are also more expensive.

“Almost everything in the supermarket has gone up,” said Crisanto, the barber.

This also applies to electricity and natural gas.

Buying furniture and lunch can cause stick shock. Parking a car for about two hours in a garage in Coconut Grove on a recent Friday afternoon for a business lunch cost this reporter $25. That’s 250% higher than downtown San Francisco’s Fifth and Mission/Yerba Buena Garage, about five blocks from Twitter’s headquarters. Meanwhile, public parking lots in Palo Alto, Mountain View, and Sunnyvale, California, cities that are the heart of Silicon Valley, are still free.

Newcomers get a sudden shock

Newcomers to the Magic City suffer greatly.

Zhenya Kolcheuskaya, a 29-year-old waitress who moved to Miami in 2020, said recently while taking a break at the restaurant where she works, “The prices went up a lot, especially compared to three years ago when I moved here.” Belarus added: “We all know it.”

What if consumers could do something now? Not too much, experts say, because we all have to keep buying the basics and paying for housing costs.

READ MORE: Four Miami-Dade professionals describe the housing squeeze

If you’re looking to buy a used car or truck, you may be in luck. It was one of the few categories whose price fell by 9.8%.

Otherwise, consumers are stuck. Conventional advice tells people to save, switch to cheaper brands, buy in bulk and shop less often, but many Miamians are already doing that and as much as they can, economists note.

For example, Kolcheuskaya, a waitress, said, “I prepare and cook more at home and eat less,” she noted. And he usually goes out less and instead “stays at home”.

Many Miamians simply don’t have much wiggle room.

“There’s nowhere to hide because inflation has been so strong in the categories that are essential,” McBride said. “So, it’s not about how to cut this or do without that. [Such advice] just doesn’t apply in these circumstances.”

Having to do multiple jobs

Many newcomers and old-timers are looking for additional sources of income.

“The only thing you can do is work more,” said barber Crisanto, who now works 60-hour weeks, including home visits.

Kolcheuskaya, a waitress, juggles other side jobs such as modeling and social media work, both of which she first started out of personal interest. But now “I feel financial pressure to continue them,” he said.

One measure of this is a company called Instawork, a digital marketplace that connects businesses and individuals looking for nearby hourly work in more than 25 US cities.

The San Francisco-based company sees massive growth in South Florida, said Daniel Altman, the company’s chief economist. Among its 30 largest markets in the U.S. and Canada, the Miami area had the largest increase in shifts from November to December 2022, he said.

Last year, three-quarters of flexible workers who responded to a survey via the Instawork platform used the income they earned to pay for necessities.

“So many people need extra income to make ends meet,” Altman said. “This is a big reason why our platform has grown so quickly in the state of Florida.”

That’s because unemployment in Miami-Dade County continues to fall. In November, it was 1.5%, much lower than the national rate of 3.4%, according to the U.S. Bureau of Labor Statistics. And wages for most middle-class workers continue to rise, but not enough to keep up with rising prices.

According to Altman’s analysis, consumer purchasing power in the greater Miami area rose 6 percent at the start of the pandemic, but all those gains were wiped out by early last year. Only recently have they started to recover.

“The purchasing power of Floridians has actually declined, even though wages for many have nominally increased,” the Instawork economist said.

A quick price reduction is not in the cards

How long will this take?

Part of the slowdown in inflation seen in the latest report was due to a sharp drop in gasoline prices, McBride said. But it is still unstable. In Miami, for example, gas prices rose again in January.

“We need to see a broad-based improvement,” the Bankrate economist said. “It’s still missing.”

How did this problem arise? The causes of inflation are not unique to South Florida or the state.

The outbreak of the Covid-19 pandemic in March 2020 and the subsequent political decisions made in Washington were the first catalysts. After the pandemic emerged, the federal government pumped billions of dollars into the economy through Paycheck Protections program loans, tax credits and stimulus measures.

“It led to spending and inflation,” said Rob Anderson, chief financial officer of Miami-based community bank US Century Bank.

Combine that with supply chain kinks that worsened during the ongoing pandemic, followed by the Biden administration’s focus on policies to bring manufacturing back to the U.S., and the result will be more inflationary pressures — regardless of whether such policies have other benefits.

More recently, the Federal Reserve has been raising interest rates throughout the past year due to rising inflation. This means higher borrowing costs for individuals and companies.

Meanwhile, some reasons have to do with the Miami metro area.

“The Perfect Storm in South Florida”

The spread of remote work during the pandemic caused technology professionals to move around the country. Many flocked to Florida and brought their high wages. At the same time, immigration from Latin America to the state continued. For example, Venezuelans would be happy to see double-digit inflation.

“You had a perfect storm in South Florida,” Anderson said, “so it just led to a lot of expenses.”

Investment firms also began snapping up homes and paying cash for them, then renting or flipping them. Anderson, the bank’s chief financial officer, said when he moved here in 2020 and made one offer on the house, it received five other cash offers over the asking price.

Housing is a key factor driving up the cost of living in Miami, even though home sales declined last year.

The shelter index in the latest CPI report rose 17.2% from last year in the Miami metro area. Nationally, this figure was less than half, 7.5 percent. Average rents for a primary residence in South Florida rose 18.6%.

“Anytime you have a lot of new residents coming into an area and bringing a lot of income to the area without increasing the supply of things that people need, prices go up,” Altman said.

Many newcomers put money into the local economy by eating in restaurants or going out on Saturday nights. “These higher-income jobs also generate higher-level spending, which ends up being someone else’s income,” said McBride of

But the supply of houses, condos and condos is not keeping up with demand, especially in the condo sector, despite cranes and construction sites in Wynwood and downtown Miami.

“Most of the construction that happens in South Florida tends to be high-end real estate,” McBride said.

Availability is limited for middle-income and low-income households, people who are likely to buy their first home. “The supply problem is still a real problem below the $500,000 price point. It’s a problem that’s been going on for years,” he said.

Anderson of US Century Bank agreed. “If you’ve been here and you work in a low- or middle-income job, it’s very challenging to get an apartment, let alone rent,” the economist said.

And so even relative newcomers wonder how many jobs they need to keep up. Kolcheuskaya, a waitress, said: “I’m a little stressed because it’s worrying how much work we have to do to live a normal, good life here.”


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