Home Sales in the Florida Keys - Market Report (May 2015 Update)
Upper Florida Keys Real Estate Market Continues to Make Large Gains
Compared to the same period last year, the first 5 months of 2015 strongly support the opinion that the real estate sales market is continuing to strengthen in the Upper Florida Keys. The number of residential sales in up 19% while the average sales price has increased from $507,577 to $580,366, or 14%. The overall sales volume has increased a whopping 36%.
The number of foreclosures and short sales also continue to decline. The number of distressed property closings in the first five months of 2015 was was 11% of total sales, down from 20% in 2014.
Graphic representations of these market trends can be seen by opening the PDF attachments at the bottom of this page. (coming soon)
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 Increasing through May
The number of residential home sales in the Upper Keys in the first five months of 2015 total 359. In 2014, the number of residential sales total 302. So the number of sales has increased 19%. This can be seen graphically on the PDF at the bottom of this page titled "Number of Sales 2008 through May 2015 - (coming soon) (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 May 2015 - coming soon") it jumps quite a bit and is difficult to determine a trend. Through May 2015, the average residential home sales price was $580,366. In 2014 it was $507,577. So in the Upper Keys we are seeing an increase of 14%. By removing the foreclosures and short sales from the calculation, the average home sold thus far in 2015 was $594,434 an increase of 10% for similarly classified 2014 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 and Short Sales are Decreasing Dramatically
Foreclosures and Short Sales are still a part of this market, but the inventory now represents less than 7% of the real estate homes for sale inventory in the Upper Florida Keys. Less than 24 months ago they represented as much as 14% of the inventory and 27% of the closings. 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 around 2010 and early 2011, and have been trending up for the last 5 years. How a fragile US and world economy will play into the future real estate equation is anyones guess.