Only eight single family homes sold in Feb 2014 in the Old Town area of Key West.  The larger three and four bedroom homes are mostly holding their own, but the smaller two bedroom homes, historically the most popular, are not in the game. Reasons? A limited, overpriced inventory. A tired, narrow buyer base.  Economic uncertainty.  Young boomers, for whom a Key West second home would be a luxury, are prioritizing other co-costs; i.e., the unpaid tuition, business, home and healthcare costs of their Millennial children. Still, the heart of the 2014 season lays ahead; but, can the 4-year rebound (from 2009 lows) continue? And if so How?

The below charts show sales of the seven most popular bed/bath combinations in Old Town Key West from January 1, 2000 to February 28, 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 2/28/2014.  (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 sale for these three homes is 530+ days, 200+% above 2013!

Two, 2Bed/1Bath homes sold in the Old Town area thru 2/28/2014. The average Sold price of $365,000 is 12% less than 2013.  Price per sqft. of $439 is the same as 2013. Nine 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.  This trend bodes well for future sales of the 3rd most popular home in Old Town. Average number of days to sell is up 18% from 2013 to 181 days.

One, 2Bed/2Bath home has sold in the Old Town area thru 2/28/2014. There are fifteen 2/2's for sale, priced between $469,000 and $1.2M. Average price per sqft of these fifteen is $559, 20% more than the 2013 average. The five year average is $448 per sqft. Twenty-eight, 2/2 homes sold in 2012, the second highest since 2004, and twenty-three in 2013.  2Bed/2Bath homes are the biggest sellers in Old Town Key West. Average number of days to sell fell last year 23% to 117 days.

Four, 3Bed/2Bath homes sold in the Old Town area thru 2/28/2014. The average Sold price of $826,000 is 11% more than 2013 which was 25% more than 2012 and is up 70% from the 2009 low! The price per sqft. of $599 is the highest since 2007. 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 24% from 2013 to 136 days.

Four, 3Bed/3Bath homes have sold in the Old Town area thru 2/28/2014. The average Sold price of $1.213M is 20% more than 2013 and 79% above the 2010 low. The price per sqft. of $640 is 19% more than 2013 and 42% above the five year (2009-2013) average. Twenty-seven 3/3's sold in 2012, the highest recorded, and twenty-six in 2013.  There are fifteen 3/3's For Sale from $869K to $2.9M. Average number of days to sell is up 24% from 2013 to 132 days.

One, 4Bed/3Bath home sold in the Old Town area thru 2/28/2014. The Sold price of $2.22M is 103% more than the average Sold price for 2013. The 3000 sq. ft. mansion was sold before it was listed.  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 eight 4/3's For Sale priced between $869,000 and $3.5M.

FOUR, 4Bed/4Bath homes sold in the Old Town area (all in January) thru 2/28/2014, the first since August 2013. The average Sold price of $1.683M is 11% above 2013 and 20% above the 10-year average. The average cost per sqft of $712 is 25% 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. The average number of days to sell is up 92% to 309 days. (One house was on market 1000+ days).

Conclusion

For Old Town sales to continue recovering, it is imperative to expand the buyer base.  Florida is the #1 state for real estate sales to foreigners.  84% of these sales are in cash. European, Asian and Middle Eastern buyers view the US real estate market as safe, open and liquid and as such, pay up the price as they know Florida real estate is worth the investment.

For Sellers to receive the highest possible price, they must work with a real estate company that is engineered to attract not just domestic but non-US buyers to the Key West real estate market. Do you hear all the foreign languages in town!

With 550 offices in 38 countries on 6 continents, the ONLY real estate company in Key West engineered to reach the domestic AND international buyer and seller is Engel & Volkers Florida Keys.

If you have any comments or questions, please contact me here.

Good luck!

Additional Resources: