Real Estate Market Report: Florida Keys 2023
General Market Conditions
The real estate market tides are shifting in the Florida Keys as they are nationally, although the specifics and timing differ. The sales prices have peaked in the Keys, as they have in the broader national market, but the Keys peak appears to have happened in the summer of 2022, while the national average, according to the National Association of Realtors, began its decrease much earlier in the year. I’m not sure if this slight delay in timing means much, but the biggest difference between the Keys and national market seems to be the change in inventory levels. While they have been increasing most of the year on a national level, they have remained relatively flat in the Keys, at historically low levels since mid-2021, only in the last quarter of the year have they started to increase.
If you own property here, and want to sell it, you probably missed the peak of the market and won’t get the top dollar for your property you may have six months ago, but inventories remain historically low, and if you price your home properly, chances are you will receive a fair offer in a relatively short time. The key is pricing your property to sell. It is possible you won’t get the price your realtor’s comparable sales are showing you from six months ago, but you won’t have to give your home away either. The pendulum may be starting to shift, but it is still a Seller’s market in the Florida Keys.
If you are looking to buy a property in the Florida Keys, you will still more than likely, be paying a premium price, and your choices remain limited, but changes are you won’t have to actively bid against multiple offers as was the case in 2021 and much of 2022, nor make inspection concessions to increase your chances of getting your offer accepted. When you find a property that works for you, make a fair offer. It is still a Seller’s market. If you are looking to steal a deal, you may want to remain on the side lines a bit longer.
If you are in the business of helping people buy and sell real estate, like me, you are feeling pretty good about your career choice, for even though the number of sales is settling to pre-COVID levels, prices are still strong and there are plenty of buyers chasing historically low inventories, at least in the Florida Keys.
How long will this Seller’s Market last? I am watching the sales prices. Traditionally, except during the market crash of 2007, the Keys have been stubborn in retreating from home price increases. Demand is softening, for several reasons, including affordability indexes, but if the number of available homes for sale stays low, I don’t anticipate much of a decline in pricing, although there is bound to be some.
If you are a chart person, you will find at the bottom of this page several PDF files displaying three years of Florida Keys real estate trends including the “number of sales”, “the median sales price,” “the number of days from listing to contract,” and “the number of properties for sale (inventory)”. I have kept single family homes separate from condominiums and the monthly data points are 6-month rolling averages, used to smooth out seasonal fluctuations and spikes created by outlying sales that can skew things in a relatively small market like the Keys. Mobil homes and vacant lots have been excluded from the data, but if you have an interest in these, reach out to me on the contact page and I will gladly share that information with you.
The Florida Keys Real Estate Market – 2022 Year End Update
Prices Sky Rocket as the Number of Residential Sales Decrease: Cash Purchases Up
According to Monroe County MLS (Multiple Listing Service) data, there was a significant decrease in the number of single-family and townhome/condo sales (-33.2%) in the Florida Keys in 2022. However, the prices paid for these properties continued to increase (+22.9%) reaching a median sales price of $933,350. Single family homes sold at a median price of over a million dollars ($1,027,500) while the average sales price sky rocketed to $1,460,845. Cash buyers accounted for 43.2% of single-family and townhome purchases, up from 38.2% in the prior year.
The ratio of sold price to list price is a key market statistic most real estate professionals watch closely, it being an indication of how strong the Buyer demand as shown by their offer price, compared to how much the Seller is hoping to receive as shown by their asking price. In 2021, the peak of the COVID driven Seller’s market, the median sold to list ratio was 97.5%, with many homes being purchased above their list price, often with several Buyers bidding for the same property and making concessions to the Sellers such as waving inspections. In 2022 this ratio mellowed a bit for single family homes to a year average of 96.3%. However, in the month of December this ratio dipped to 92.6%, close to the historical norm of just above 90%, indicating to most who watch these things that Buyers are pushing back some against the aggressive asking prices being set by Sellers. Interesting to note however, in the lower priced townhome/condo market, this ratio in 2022 was 98.2%, higher than the 97.5% in 2021, with even year-end December’s ratio coming in at a healthy (for Sellers) 95.5%.
Inventories are Increasing but Remain Historically Low
On the last day of 2022 there were 622 single-family homes and 134 townhomes/condos listed for sale in the three Florida Keys MLS services. This is an increase of 290 (62.2%) over the same day a year earlier. That is a pretty dramatic increase, and one might draw the conclusion that prices should be tumbling, prompting the question, “why aren’t they?” It’s because the 756 homes for sale on December 31, 2022, are still about 50% of the Florida Keys inventory in 2019, when at year end there were 1,508 homes for sale, the modern era norm.
Looking a little deeper into the numbers, we notice that the number of new single-family listings in the Florida Keys market has been fairly consistent the last seven years, ranging from a low of 1,856 in 2017 to a high of 2,283 in 2021, only a delta of 19%, or 12% if we ignore the 2017 outlier. The decrease in inventory is not due to people not wanting to sell their homes, but a decrease in time that the home is taking to sell. A statistic that makes Sellers and Realtors smile, the median time it takes between the listing date and the date the Seller accepts an offer, has been approximately 30 days for the last two years, while historically, more specifically between 2016 and 2020, it has averaged 94 days for single-family and 98 days for townhomes.
(Information for this report comes from Florida Realtors® with data provided by Florida’s multiple listing services compiled monthly from MLS feeds.)