Luxury Island Properties is Coldwell Banker Schmitt’s exclusive program for marketing Florida Keys residential properties listed and sold in excess of $1M. During the past twelve months, luxury property listings represented 11% of the overall market (10% for the previous 12-month period) by number of sales and 32% by dollar volume (31% for the previous 12-month period), therefore, luxury residential sales account for almost one-third of all real estate sales in the Keys by dollar volume. The percent of change noted in the following paragraphs results from comparing the current 12-month period to the same period a year earlier (April 2016 - March 2017 vs April 2015 - March 2016).
KEYS-WIDE MARKET OVERVIEW
Sales rose 3% to 305 compared to 297. The increase continues the trend of the past three years of more luxury property sales each successive year. Of interest: Keys-wide, the sales of all property types priced below $1M declined -9% during the same period. (Please see the Spring 2018 edition of the Coldwell Banker Schmitt Real Estate Report for complete news and trends concerning the Keys market in the first quarter of 2018 for all property types.) Also, do read the second feature which provides insight into Keys luxury market sales activity prior to Hurricane Irma (September 10, 2017) and the status of the recovery from Irma, in order to have a complete understanding of the Keys luxury market in Q2 2018.
There were 461 luxury properties listed compared to 520 a year earlier an -11% reduction with an Average List Price of $2,364,827, up 8% from $2,183,624 the previous 12-month period.
The Average Sales Price declined -10% from $1,712,104 to $1,538,606.
The Dollar Value of Sales (DVS) totaled $469,274,957, an -8% reduction from $508,048,244 a year earlier. This is the result of the 3% increase in number of sales with a -10% drop in ASP.
With the current rate of sales over the past 12 months, the Months of Inventory (MOI) is 18 vs 21, a -10% reduction from the previous 12-month period. The figure for all property types is 12 MOI (MOI provides a measure of the rate of sales versus the supply of properties and is also known as the “absorption rate.”)
The Sale Price-to-Original List Price (SP/OLP) was down -1% to 86.82% from 88.33%. (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) of 90.32% was also a -2% decrease from 92.06% and discontinues the trend since 2010 for this market metric. (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 (86.82%) and SP/FLP (90.32%) is 3.5% which indicates, on average, a seller can anticipate price reductions during the term of the listing of about 3.5% from their original list price to the final list price prior to receiving a buyer’s offer. The lowest margin of 2.4% occurred at the end of Q3 2010. Correspondingly, sellers and buyers today can expect the contract price, on average, to be -9.7% less than the final list price and -13.1% less than the original list price. These discounts from the respective list price have increased in the past year.
Average Days to Sell (ADS) was 173 (5.7 months), down -6% from 183 a year earlier. (ADS is a measure of the number of days between the date the property was listed and the date of the closed sale.) For non-luxury residential properties, the ADS is 131 (4.3 months) which is a -9% reduction from the previous year. Therefore, on average, it takes 32% longer to sell a luxury property than a non-luxury property.
Pendings: The number of pendings are up in all market areas from 7% to 75% averaging 31% Keys-wide.
Listings: Are down in every market area from 1% to 38% averaging 11%.
What is ahead for the Keys luxury market? Sales within the luxury market increased 3% during the past 12 months. Luxury sales were up 16% at the end of Q3 2017, 20% in Q1 2017, 3% in Q3 2016 and 15% in Q1 2016. After reading the second feature in our newsletter, you’ll understand that sales within the luxury market over the past 12 months had the potential to have increased more than 3% had Hurricane Irma not arrived. The luxury market has weathered the storm and has recovered well with strong sales activity in the first quarter of 2018 increasing 28% over the prior year. Pending sales at the end of the Q1 2018 are up 31% as well which clearly indicates that the sales increases in 2018 will continue with listings down -11% and listing prices up 8%, Buyers will have fewer choices going forward with increasing sales prices.
We welcome your thoughts and comments concerning the type of information in which you’re most interested. We want to provide 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, message us via our Facebook page, or send postal mail to Coldwell Banker Schmitt, Luxury Island Properties Division, 11100 Overseas Highway, Marathon, FL 33050.
Hurricane Irma’s Impact on the Florida Keys
Luxury Residential Market
The accompanying chart provides some insight into the overall impact of Hurricane Irma on the Keys luxury market which experienced the smallest increase in sales over a twelve-month period since the third quarter of 2016. The chart compares sales for each submarket area for each of the four quarters of the past twelve months to the same quarter in the previous year. The first runs from April 2017 through June 2017 contrasted with that same period in 2016; the second is from July through September (Irma struck on September 10); the third goes from October through December; and the fourth includes January 2018 through March 2018.
The submarkets are defined as follows: The Upper Keys extends from Lower Matecumbe through Key Largo. The Middle Keys runs from the Seven Mile Bridge through Long Key. The Lower Keys lie between Bay Point and Big Pine Key. Key West includes everything between the Southernmost Point and Shark Key.
Here are the most noteworthy findings for each of the four periods:
· April through June 2017: Keys-wide sales increased 17% over the same period in 2016 -- 111 compared to 95 -- primarily due to a 41% increase in sales (55 versus 39) in the Key West market. Sales were up 3% in the Upper Keys, there was no change in the Lower Keys, and the Middle Keys was just one sale away from having no change, 17 versus 18 in 2016.
· July through September 2017: Keys-wide sales were off -2% -- 64 versus 65 -- as a result of the 32% increase in Upper Keys and 17% rise in Middle Keys sales despite the arrival of Hurricane Irma on September 10. Of note is that the Keys-wide market for luxury sales was up 16% at the end of August with 58 compared to 50 sales, however, September’s sales declined -60% with just 6 sales versus 15 in 2016, ending what had been an increasing sales market for the first half of the twelve-month period.
· October through December 2017: Keys-wide sales were off -37% -- 44 from 70 in 2016 -- as there were fewer sales in every submarket. The Middle Keys was down -56% followed by the Upper Keys at -54%, then -13% for the Lower Keys and -10% for Key West. Of note for this quarter is that October sales were -24% fewer than they were in 2016 while November through December sales were down -36% as the market had not overcome the impact of Hurricane Irma.
· January through March 2018: Overall, the Keys market increased 28% with 86 sales versus 67 in 2017 providing a positive indication the Keys market was no longer being negatively impacted by the aftermath of Hurricane Irma.
The foregoing information provides an indication that the luxury property market would have increased more than 3% had Hurricane Irma not arrived in September. This offers some confidence that the luxury market is more active than it appears to be just looking at the initial table in this edition of our newsletter. We’ll address that in our Luxury Island Property Report newsletter to be published at the end of Q3 2018.
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of Luxury Island Properties Keys-wide
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