Coldwell Banker Schmitt's Luxury Real Estate Report

Coldwell Banker Schmitt continues to be the market share leader for listings and sales of million dollar-plus properties from Key Largo to Key West, as it has for many years. Accordingly, we publish the Luxury Island Properties newsletter at the end of the first and third quarters each year to provide sellers and buyers of high-end properties with up-to-date information concerning this important segment of the Florida Keys real estate market

KEYS-WIDE MARKET OVERVIEW

Sales of luxury properties increased 11% to 228 compared to 206 a year ago. Luxury sales accounted for 11% of the sales Keys-wide versus 8.3% last year. Note: See the chart on page 3 for the history of luxury property sales since 2000.

Average Sales Price rose by 7% to $1,710,031 from $1,605,022 a year ago. The increase in luxury sales and luxury average sales prices is largely responsible for the overall increase in average sales prices Keys-wide in 2016.

Dollar Value of Sales (DVS) totaled $389,887,141, up 18% from the $330,634,509 recorded during the same period in 2015. Luxury property sales accounted for 31% of the Keys-wide total DVS during the past nine months, compared to 26% over the same period last year.

The Sale Price-to-Original List Price (SP/OLP) did not change appreciably: 87.70% versus 87.77% at the end of September 2015. The highest SP/OLP, 95.78%, occurred in the first nine months of 2000. (The SP/OLP compares the sale price of the property to the list price of the property at the time it first came on the market. It provides a measure of the mismatch between many sellers’ initial list price and the market price acceptable to buyers.)

The Sale Price-to-Final List Price (SP/FLP) rose 1% to 92.21% compared to 90.96% in 2015. (The SP/FLP compares the sale price of the property to the list price of the property at the time the contract was written instead of the time the property was first listed. It reflects the average percentage of the final listed price that buyers are paying for properties that have sold.)

The margin between the SP/OLP (87.70%) and SP/FLP (92.21%) is 4.5%. That margin indicates, on average, a seller can anticipate price reductions during the term of the listing of 4.5% from their original list price to the final list price prior to receiving a buyer’s offer. The highest margin was 24.2% at the end of Q3 2010; the low of 2.5% came at the end of last September. Correspondingly, sellers and buyers today can expect the contract price, on average, to be 7.8% less than the final list price and 12.3% less than their original list price.

The 352 luxury property listings accounted for 14% of all listed properties. For the first nine months of 2015, they accounted for 21% of all listings Keys-wide.

The Average List Price was $2,270,636 at the end of September, down 7% from $2,446,178 last year. With the rate of sales for the past 12 months, the Months of Inventory (MOI) is 14, down 30% compared to 11 MOI for all property types. (MOI provides a measure of the rate of sales versus the supply of properties and is also known as the “absorption rate.”)

Luxury Pending Transactions were 41 at the end of September, accounting for 11% of the Keys-wide total.

Summarized Sub-Market Area Details Q1 2016 vs. 2015

With our initial Luxury Island Properties newsletter, we provided readers with a history of luxury property sales ($1M ) for the Keys during the first nine months of the past 16 years. That era encompasses periods of record growth for the overall Florida Keys real estate market (1999 to 2005), followed by the collapse of the market due to the impact of Hurricane Wilma in October of 2005 and the national recession (2006 to 2009), followed by an improving Keys real estate market (2010 through the first three quarters of 2015), and, now, commencing with Q4 2015, an overall reduction in sales each quarter. As of Q3 2016, sales are down 14% with properties for sale up 17% (as addressed in the Q3 CBSREC Real Estate Report, which includes all property types.) What is unusual about the Keys market during this period is the 16% increase in Average Sales Price (ASP). Normally, when sales decrease and listed properties increase, the ASP decreases due to an increasing inventory with fewer properties selling. The following chart provides insight into the anomaly of why we’re experiencing increased ASP in a slowing market.

Luxury Sales have consistently increased since 2012. 2016’s level was the third-highest on record with 228, thereby accounting for 11% of sales at all price points from Key Largo to Key West. Additionally, the 27.2% of luxury property sales valued at $2M  is the second-highest on record behind 2001’s 30%. So is the 8.8% of luxury property valued at $3M  sales to 2001’s 15%. The increase in total sales resulted in a $389M Dollar Value of Sales. That figure is also the second-highest on record and accounted for 31% of the dollar value of all sales owing to the ASP rising 7% coupled with total sales growing 11%. Consequently, the luxury sector performance is a primary factor in causing the increase in the ASP for the overall Keys-wide market.

Also of note: over the past nine months, the luxury property SP/OLP of 87.70% was the third-highest to the 88.01% of 2000 and the 87.77% of last year. When combined with the 92.21% SP/FLP (fourth-highest on record) it results in a margin between the two of 4.5%, the third-lowest on record to the 2.6% in 2014 and 3.1% last year.

The Leading Company for Sales & Listings of Luxury Island Properties Keys-wide.

We welcome your thoughts and comments concerning the type of information in which you’re most interested. We want to provide you with information relevant to any decision you may be facing about the sale or purchase of a Luxury Island Property. Please email us at LuxuryIslandProperties@cbschmitt.com or send postal mail to Coldwell Banker Schmitt, Luxury Island Properties Division, 11100 Overseas Highway, Marathon, FL 33050.