The bottom in Key West real estate was 2009 - 2010. The recovery has been led by larger three and four bedrooms homes as buyers with cash and low interest mortgages have snapped up "value" properties. Historically popular two bedroom homes have not maintained their sales leadership and one bedroom home sales are flat. Some stock market watchers are expressing anxiety over an extended market and are cautioning "Sell in May and Go Away". If the market stumbles this summer will big money dry up, taking Key West's real estate market with it? Number of sales in both 4Q 2013 and 1Q 2014 broke rising trend lines. If number of sales fall will prices follow?
The below charts show sales of the seven most popular bed/bath combinations in Old Town Key West from January 1, 2006 to April 30, 2014.
These charts are for single family homes sold south and west of White St. and cover the neighborhoods the Meadows, Old Town, Truman Annex and Casa Marina but not Sunset Key. You can view a neighborhood map here. The seven bed/bath combinations below contain enough sales to measure and evaluate trends before, during and after the 2004-2006 real estate Bubble.
One, 1Bed/1Bath home has sold in the Old Town area thru 4/30/2014. (The first since August 2013). This is a genuine one-of-a-kind home surrounded by a 10,000 sqft tropical rain forest in the middle of Old Town; hence its sale price of $1.24M! Otherwise, first time buyers have turned away from small Old Town homes, buying elsewhere or renting. Average number of days on the market (DOM) for the eight 1/1 homes for sale is 300+ days!
Two, 2Bed/1Bath homes have sold in the Old Town area thru 4/30/2014 (both in January). The average Sold price of $365,000 is 12% less than 2013. Price per sqft. of $439 is the same as 2013. Seven 2/1 homes are for sale with prices up to $600,000. Fifteen, 2/1 homes sold in 2011, sixteen sold in 2012 and twenty-one sold in 2013. Historically 2/1 homes have been the 3rd most popular selling home in Old Town.
Seven, 2Bed/2Bath homes have sold in the Old Town area thru 4/30/2014, one in Feb., six in March. The average sale price of $778,000 is 83% above the low in 2009. There are twenty 2/2's for sale, priced between $469,000 and $1.2M. Average price per sqft of these twenty is $675, 44% more than the five year average of $470 per sqft. Twenty-eight, 2/2 homes sold in 2012, the second highest since 2004, and twenty-three in 2013. Historically, 2Bed/2Bath homes are the biggest sellers in Old Town Key West.
... leading the pack ...
Eight, 3Bed/2Bath homes have sold in the Old Town area thru 4/30/2014. The average Sold price of $886,000 is 20% more than 2013 which was 25% more than 2012 and is up 91% from the 2009 low! The average sold price per sqft. of $627 is the highest since 2005. Eighteen 3/2's sold in 2012 and twenty-one sold in 2013. The twenty For Sale offer a wide range of price and matching quality. The ten year average of number sold per year is 18. Average number of days to sell has fallen 44% from 2013 to 100 days.
Eight, 3Bed/3Bath homes have sold in the Old Town area thru 4/30/2014. The average Sold price of $1.211M is 20% more than 2013 and is 65% above the 2010 low. The average sold price per sqft. of $660 is 22% more than 2013 and 46% above the 2009-2013 average. Twenty-seven 3/3's sold in 2012, the highest recorded, and twenty-six in 2013. There are nineteen 3/3's For Sale from $675K to $3.75M. Average number of days to sell is up 5% from 2013 to 112 days.
Two, 4Bed/3Bath home sold in the Old Town area thru 4/30/2014. The Sold price of $2.1M is 94% more than the average Sold price for 2013. Both homes sold very quickly indicating pre-listing sales. This Bed/Bath configuration has yet to solidly reverse price decline. HOWEVER. The twelve sales in 2012, the highest since 2008, and eleven sales in 2013, with a climbing average sales price per sqft foot, shows strength. There are twelve 4/3's For Sale priced between $699,000 and $3.5M.
Six, 4Bed/4Bath homes sold in the Old Town area (four in Jan., two in Apr) thru 4/30/2014. The average Sold price of $1.695M is 11% above 2013, 22% above the 10-year average and 53% above the 2009 low. The average sold price per sqft of $645 is 13% above 2013 which was 47% more than 2012. Since 2003 the average number of sales is six homes, so nine sold for 2013 was excellent. Year to year price action is choppy as a limited number of annual sales causes large fluctuations in average sales price.
Conclusion
Old Town sales will stall if the buyer base is not grown. Florida is the #1 state for real estate sales to foreigners with 84% of these sales are in cash. BUT - sales of Key West real estate to foreigners is a minor percentage. Who can best bring the non-US buyer to Key West? And how?
European, Russian, Asian and Middle Eastern buyers view the US real estate market as safe, open and liquid. Statistics show the non-US buyer pays up the price of Florida real estate because they know Florida is worth the investment.
The ONLY real estate company in Key West specifically engineered to reach the domestic AND international buyer and seller is Engel & Volkers Florida Keys. Eighty-five percent of our 550 offices are OUTSIDE of the US and all are linked via email and a closed circuit broadcast of properties. Sale of real estate across cultures, languages and borders is our specialty.
If you have any comments or questions, please contact me here.
Good luck!