Some people claim Key West is headed for a bubble.  I say no. The 2004 - 06 run up and burst was caused by easy money. Prices rose rapidly. Diminishing sales could not support the runup and boom. Bust. Not today. 3 reasons. Many sales are cash. Second, since the 4th Qtr of 2014, average sales prices for single family homes in the Old Town area are flat. Third, yet number of sales per month is UP. For every month in 2015, the number of sales is 21%-71% above the 2010 - 2014 same month average. May had 24 sales, second only to 26 sales in March 2013.

The below charts show sales of the seven most popular bed/bath combinations in Old Town Key West from January 1, 2006 to May 31, 2015.

These charts are for single family homes sold south and west of White St. and cover the neighborhoods of 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 after the 2004-2006 real estate Bubble

The primary trend continues - Buyers demand and will pay for Quality.

Five, 1Bed/1Bath homes have sold in the Old Town area thru 5/31/2015.  The average sale price of $539,000 is 21% above the average sale price for 2014. In 2014, eleven 1/1 homes sold, the most since 2010! Buyers are very choosey about buying smaller Old Town homes. The average size of the four for sale is 814 sq.ft., 31% larger than the 2010 - 2014 average. Yet, the average sale price of $636,000 is 70% higher, than the 2010 - 2014 average of $375,000.

Thirteen, 2Bed/1Bath homes have sold in the Old Town area thru 5/31/2015.  The average Sold price of $536,000 is 15% more than 2014 which was 13% more than in 2013. Three 2/1 homes are for sale with prices from $499K to $799K. Fifteen 2/1 homes sold in 2011, sixteen in 2012 and twenty-one in 2013 but only fourteen in 2014! Thirteen sales thru May is very encouraging. Since 2009, 2Bed/1Bath homes have been the 3rd most popular selling home in Old Town

Twenty-four, 2Bed/2Bath homes have sold in the Old Town area thru 5/31/2015. The average sale price of $749,000 is 1% above 2014 yet 76% above the low in 2009. There are fifteen 2/2's for sale, priced between $399,000 and $1.15M. Average price per sqft of these fifteen is $595, 26% more than the five year average of $470 per sqft.  Since 2009, 2Bed/2Bath homes have been the biggest sellers in Old Town Key West.

Seven, 3Bed/2Bath homes have sold in the Old Town area thru 5/31/2015. The average Sold price of $866,000 is 10% below 2014 which was 30% more than 2013 and is up 88% from the 2009 low. The average sold price per sqft. is $597, up 6% from 2014. Twenty-one 3/2's sold in 2013 and twenty-seven sold in 2014. The fifteen For Sale offer a wide range of price and matching quality. Since 2009, 3Bed/2Bath homes have been the second biggest sellers in Old Town Key West.

Eleven, 3Bed/3Bath homes have sold in the Old Town area thru 5/31/2015. The average Sold price of $1.086M is 11% less than 2014 which was 20% more than 2013. The average sold price per sqft. of $643 is 3% less than 2014 yet 6% above the 2009-2013 average. Twenty-seven 3/3's sold in 2012, the highest recorded, and twenty-six in 2013.  There are nine 3/3's For Sale from $760K to $2.5M. Since 2009, 3Bed/3Bath homes have been the fourth biggest seller in Old Town Key West.

Three, 4Bed/3Bath homes have sold in the Old Town area thru 5/31/2015. The average sale price of $1,697M is 2% lower than the 2014 average Sold price of $1.723M which was 59% more than the average Sold price for 2013. 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 square foot, shows strength. There are eleven 4/3's For Sale priced between $750K and $2.9M

Three 4Bed/4Bath homes have sold in the Old Town area thru 5/31/2015. The average sale price of $2.45M is 55% above the 2014 average Sold price which was 4% above 2013, and 120% above the 2009 low. The average sold price per sqft of $851 is 40% above 2014. Since 2003 the average number of annual sales is six, with nine sold in 2013 and 10 in 2014. Year to year price action is choppy as a limited number of annual sales causes large fluctuations in average sales price.

Summary

Boomers continue to reward themselves and their families for decades of hard work by buying second homes in Key West.  A stronger dollar may make foreign purchases cheaper but increasing air travel costs and civil uncertainties abroad makes Florida, the Keys and Key West safe and desireable destinations.

Overwhelmingly, homes purchased are well renovated. But - is the total cost of purchase to buyer much different from when they bought fixer-uppers and then paid for renovations?

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

Good luck!

Postscript

Do high prices squeeze out the first time buyer?  Often, yes. 

But for the first time buyer who, like me and many of us, bought a fixer-upper as their first home, the rewards of home ownership are not so much "Look what I just bought", but "Look what I am going to do". 

Congratulations to this young lady and her first home, a fixer-upper in a superior location in Old Town!