The decrease in American gas prices has contributed to the increase in local tourist attractions in the South Florida region. This in combination with today’s economy, has made for a dramatic result on American consumer behavior, driving habits and lifestyle changes. Gasoline prices were known to have been on the rise since February of 1994. And up until 2014, those high gas prices have costed Americans on average around $3.00 to $3.59 per the gallon rising to almost $4 potentially per the gallon, it is no wonder that commercial real estate (CRE) has adapted to eco-friendlier developments. Today, gas prices throughout South Florida continue to remain below $2. In Broward County, gas stations average $1.90 per gallon, which is three cents less than reported earlier in the month and 39 cents less than a year ago. And in Miami-Dade County, the average is also $1.90, down four cents in March and 40 cents less than a year ago.
Luckily, the falling oil prices which have now been occurring have also been pulling some CRE sectors in positive direction. In my shopping mall blog post earlier this month, South Florida’s retail arenas have in particular benefitted from lower gas prices. The drop in gas prices has saved the average American household roughly $700 in 2015 since 2014. This could still remain for 2016.
The impact on South Florida’s retail market has given the consumer more buying power, a significantly positive boost for commercial real estate developers and shopping center proprietors. We are still waiting for the uptick to pick up across the country. A recent U.S. Department report indicated that consumer preferences are shifting toward restaurants and online shopping. The wisdom of consumers today affects their spending decisions from what type of car, where to live, to what kind of “eco friendly” property they can begin to invest in more intelligently.
We all know the real estate market significantly impacts on how people are living today. Commercial real estate developers are mindful that saving in the new economy is here to stay. Developing more walkable neighborhoods closer to public transportation and shopping centers compliment lower gas costs, and the real estate market in South Florida has been very proactive in reacting to this type of desired consumer convenience. The future outlook within the South Florida region is also a strong indicator of how much money individuals are earning. If earnings remain high, consumers continue investing and spending. Presently, consumer spending effects 70 percent of today’s economic output. Despite the decline in income growth, fortunately the global recession of 2001 has not been able to directly impact a consumer spending slowdown.