Home Sales in the Florida Keys - Market Report

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 stabilized?  That's what I've been saying.  Are the numbers of sales improving dramatically?  I was pretty sure of that.  Are there indeed signs that the market is starting to rebound, at least in the Upper Keys?

Florida Keys Home Sales Increase

The number of sales are on an upward trend.  In the Upper Florida Keys, although the last five months have trended downward, the number of home sales ithrough January of 2012 were up 5.4% over the same period last year.  Any of the PDF graphs at the bottom of this page will show that, but I think it is best seen in the attachment titled "Number of Sales 2008 through January 2012 (6 Month Rolling Average)".

Have Home Prices Bottomed in the Upper Florida Keys?

Are prices bouncing on the bottom as I have been saying?  If you look at a straight graph of monthly data (Attachment "Upper Florida Keys Monthy Sales Statistics 2008 - through Janauray 2012") it jumps a lot and is difficult to determine a trend.  Last six months through January 2012, the average residential home sales price was $409,131.  The same period a year earlier it was $393,171.  So we are seeing an increase of 4.1% in the average prices of homes in the Upper Florida Keys.

I decided that I would use a rolling average approach in order to smooth out the seasonality of the statistics.  I tried 12 moths, and although that would minimize any seasonality trends, it seemed too slow to show a trend within the year.  I tried 3 months, but that still had too much seasonality and jumped much in the same way as a month to month graph.  But a 6 months rolling average seemed to work.  The graph was smoother, and definitely showed trends within the year, and more importantly (at least to me), it supported what I was saying!!!   At least for now.

According to the 6 month rolling average, sales prices increased monthly from January through September. October through January 2012 shows decreases, taking a bit of an edge off the annual trend.  But after three years of declining prices, there seems to have been a bottoming at the end of 2010.  To see this trend graphically, take a moment and open up the top PDF below titled "Average Sales Price 2008 through January 2012 (6 Month Rolling Average)."

There is also a graph showing a plot of median prices, and the trend is similar, showing a bottoming in February of 2011. (See Median Sales Price 2008 through January 2012 (6 Month Rolling Average).

Other Factors

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 Still Play Big

Foreclosures and Short Sales are still a major part of this market.  While representing only 17% of the real estate home inventory in the Upper Florida Keys, 39% of the closings in 2011, were either Lender Owned (20%) or Short Sales (19%).  For more information, including a list of distressed properties, visit foreclosures and short sales. 

The average residential sales price "6 month rolling average" shows the decline in prices continues from September 2011's peak.  However it still reflects year-over-year increases.  In 2011, foreclosures  represented 19.6% of the closings compared to 25.7% in 2010.  Short Sales accounted for 19.9% of the sales compared to 19.3% in 2010.  These factors, coupled with a decreasing trend in days-on- the-market of sold homes, are indications that prices and sales are stabilizing, at least in the Upper Florida Keys.  How the sputtering global economy and eratic financial markets will affect this stabilization remains to be seen.

File Type	Attachment	Size
	Number of Sales 2008 through January 2012 (6 Month Rolling Average)	295.81 KB
	Average Sales Price 2008 through January 2012 (6 Month Rolling Average)	408.68 KB
	Median Sales Price 2008 through January 2012 (6 Month Rolling Average)	295.44 KB
	Upper Keys Sales Volume 2008 through January 2012 (6 Month Rolling Average)	289.15 KB
	Upper Florida Keys Monthly Sales Statistics 2008 - through January 2012	1.52 MB
	Upper Florida Keys Annual Market Statistics 2002 through 2010	489.15 KB
	2011 Upper Florida Keys Sale Statistics by Month	1.35 MB
	2010 Upper Florida Keys Sale Statistics by Month	827.08 KB
	2009 Upper Florida Keys Sale Statistics by Month	507.97 KB