Home Sales in the Florida Keys - Market Report (July 2014 Update)
Upper Florida Keys Real Estate Market Continues to Rebound
We are 7 months into 2014 and statistics show that the real estate market in the Florida Keys continues to improve. Although year-to-date residential units sold in the Upper Keys (Key Largo and Islamorada) is only up 1% the average sales price is up 4%. The overall sales volume has increased 6% to over $221,000,000.
The number of foreclosure and short sales is declining. The number of distressed property closings in the first six months of 2014 was 18.2% of total sales, down from 21.8% in 2013.
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 my opinion of the market trends by almost every Buyer, "What is happening to the Real Estate Market in the Florida Keys? Is it a good time to buy? Are prices going up?"
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 70% 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. Are there indeed signs that the market is rebounding in the Upper Keys?
Florida Keys Home Sales Flat through May
The number of residential home sales in the Upper Keys in the first six months of 2014 total 373. In 2013, the number of residential sales total 372. So the number of sales has been the same. This compares to an 18% increase in the first six months from 2012 to 2013. This can be seen graphically on the PDF at the bottom of this page titled "Number of Sales 2008 through July 2014 (6 Month Rolling Average)"
Home Prices are Increasing in the Florida Keys
If you look at a straight graph of monthly data (Attachment "Upper Florida Keys Monthy Sales Statistics 2008 - through July 2014") it jumps quite a bit and is difficult to determine a trend. Through June 2014, the average residential home sales price was $511,703. In 2013 it was $488,131. So in the Upper Keys we are seeing anincrease of 5%. By removing the foreclosures and short sales from the calculation, the average home sold thus far in 2014 was $541,017, an increase of 3% for similarly classified 2013 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.
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 13 of the real estate home inventory in the Upper Florida Keys, 22% of the closings in 2013, have been either Lender Owned of Short Sales. As of the end of June, distressed sales represented only 8% of the listings, and have accounted for 18% of 2014 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 and declining inventories are indicators that sales and prices stabilized in around 2010 and early 2011, and have been trending up for the last 3 years. How the fragile US and world economy will play into the equation is anyones guess. The Obama administration is now supporting lowering criteria for mortgages with more federal quarantees to lenders. Although this would certaining help the short term 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.