Home Sales in the Florida Keys - Market Report (March 2013 Update)
Upper Florida Keys Real Estate Market Strong in First Quarter 2013
We are 3 months into 2013 and statistics show that the real estate market in the Florida Keys continues to improve. First quarter residential sales volume in the Upper Keys (Key Largo and Islamorada) is up 11.1%. Although the average sales price was down 5.8%, the number of sales increased 17.9%.
Perhaps a more telling look compares the last 12 months, through March 2013, with the prior 12 months. The average sales price is up 6.7%. The number of residential sales is up 10.0% and the overall residential real estate volume is up 17.4%.
Foreclosures and Short Sales also played a smaller part. The number of distressed property closings in the first quarter 2013 was 25.9% of total sales, down from 29.0% in 2012.
Graphic representations of these market trends can be seen by opening the PDF attachments at the bottom of this page.
So You Want My Opinion about the Florida Keys Real Estate Market?
I am asked by almost every Buyer, "Have Florida Keys real estate prices hit the bottom? Is it a good time to buy, or will I be able to get if cheaper next year?"
Before I answer that question, I qualify my response by explaining that I bought my current Florida Keys home at the peak of the real estate market in 2005, and that it is now worth about half of what I paid for it. If they are still interested in my opinion, I continue.
What's in a Real Estate Market Statistic?
Statistics are just statistics and sometimes you can spin them to support what you want. I ran into this while trying to convince myself that what I have been feeling, and more importantly telling my clients, was in fact true. Have the prices started to increase? That's what I've been saying. Are the numbers of sales still improving? Are there indeed signs that the market is starting to rebound in the Upper Keys?
Florida Keys Home Sales Flatten
After three years of trending up, the number of residential home sales in the Upper Keys appears to have leveled out. In 2012, the number of residential sales totaled 591, compared to 578 in 2011. This is a 2.3% increase and the trend over the last several years can be seen graphically in the PDF at the bottom of this page titled "Number of Sales 2008 through February 2013 (6 Month Rolling Average)"
Home Prices are Increasing
If you look at a straight graph of monthly data (Attachment "Upper Florida Keys Monthy Sales Statistics 2008 - through February 2013") it jumps quite a bit and is difficult to determine a trend. Through December 2012, the average residential home sales price was $473,340. In 2011 it was $415,319. So at least in the Upper Keys we saw an increase of 14.2%. If you remove the foreclosures and short sales from the calculation, the average home sold in 2012 was $530,439, an increase of 10.1% for similarly classified sales.
I use a rolling average approach in order to smooth out the seasonality of the statistics. I use a 6 month rolling average because 12 months, although it eliminates seasonal trends, is too slow to reflect trends within the year. 3 months still has too much seasonality and jumps in the same way a straight month to month graph does. A 6 months rolling average seems to work. The graph is smoother and definitely shows trends within the year. And better yet, supports what I have been telling my customers.
Of course there are other factors that influence this data. How many foreclosures and short sales are there now compared to last year? The Upper Keys is still a relatively small sample and a few large estate sales, or an increase in mobile home sales can have a significant impact on monthly data. But at some point I have to let it go and hope that I am a better Realtor® than a statistician and believe that it will all "come out in the wash."
Foreclosures are Decreasing, but with Short Sales, Still Play a Big Role
Foreclosures and Short Sales are still a major part of this market. While representing less than 16% of the real estate home inventory in the Upper Florida Keys, 28.6% of the closings in 2012, were either Lender Owned of Short Sales. However, in 2011, distressed properties were 39.1 % of the total sales. For more information, including a list of distressed properties, visit foreclosures and short sales.
These factors, coupled with a decreasing trend in days-on- the-market of sold homes, are indicators that sales and prices have stabilized, and appear to be trending up. How the fragile US economic recovery, exploding stock market and puttering global economy will play into the equation is anyones guess. The Obama administration is now proposing to lower the criteria for mortgage qualifications and supporting these loans with federal quarantees. Although this would certaining help the short time housing market, isn't that how we got into this mess in the first place? I never did claim to be the "sharpest knife in the drawer", and maybe I am missing something, but fool me once, shame on you. Fool me twice ... well you know how it goes.