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 12 months, such listings represented 10% of the overall market by number of sales and 31% 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). This rolling 12-month comparison increases sample size, increasing statistical accuracy.
KEYS-WIDE MARKET OVERVIEW
Sales rose 20% to 297 compared to 248 a year ago. The increase continues the trend of the past three years of an escalating number of luxury property sales each successive year. Of interest: Keys-wide, the sales of all property types priced below $1M declined 8% during the same period. (Please see our Coldwell Banker Schmitt Real Estate Report January-March 2017 vs. 2016 for complete news and trends concerning the Keys market for all property types.)
The Average Sales Price rose 5% from $1,625,544 to $1,710,600.
The Dollar Value of Sales (DVS) totaled $508,048,244, up 26% from $403,134,844. This is a consequence of the 20% increase in number of sales and 5% rise in ASP.
The Sale Price-to-Original List Price (SP/OLP) rose by 1% to 88.33% from 87.20%. (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 92.06% was a 1% increase from 91.57% and continues the upward trend since 2010 for this important 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 (88.33%) and SP/FLP (92.06%) is 3.73% which indicates, on average, a seller can anticipate price reductions during the term of the listing of about 3.7% from their original list price to the final list price prior to receiving a buyer’s offer. Correspondingly, sellers and buyers today can expect the contract price, on average, to be 8% less than the final list price and 11.6% less than the original list price.
Average Days to Sell (ADS) was 183 (6 months), down 26% from 246 a year earlier. (ADS is a measure of the number of days between the date the property was listed and the date of the sale.) For non-luxury residential properties, the ADS is 134 (4.5 months) and represents no change from the previous year. Therefore, on average, it takes 33% longer to sell a luxury property.
There were 520 luxury properties listed with an Average List Price of $2,183,624. With the current rate of sales over the past 12 months, the Months of Inventory (MOI) is 21 vs 22 (-5%). The figure for all property types is 15 MOI. (MOI provides a measure of the rate of sales versus the supply of properties and is also known as the “absorption rate.”) Therefore, the absorption rate for luxury properties is also 33% longer.
What is ahead for the Keys luxury market?
Sales within the luxury market increased 20% during the past 12 months. Luxury sales were up 15% at the end of Q3 2016. We had anticipated the luxury market would soften, however, that has not occurred to date. The continued increase in listings in all areas of luxury homes is an indicator that a slowing of sales in this sector cannot be far behind. We will report on what occurs with our next Luxury Island Property Report at the end of Q3 2017.
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.
HOW IS IT THAT AVERAGE SALE PRICES ARE UP
IN THE FACE OF FEWER SALES?
Month-to-month, throughout 2016, the number of sales for all property types decreased compared to the preceding year, while the Average Sales Price (ASP) increased, as did the inventory of listed properties (LP). Not until January of this year did the number of sales increase, 20% in January, 1% in February, then down -1% in March. Traditionally, the ASP declines with declining sales, particularly when buyers have more choices available due to increases in LP. Why didn’t the ASP decline this time? What impact has the luxury property market had on the ASP of the overall Keys real estate market? The accompanying table provides answers: It shows the number of Sales and ASP for each of the four major
sub-market areas as well as for the entire Florida Keys market between April of 2016 and March 2017 compared to the same period over the previous 12 months, (April 2015 - March 2016).
Section 1 of the chart displays All Property Types and Section 2 presents All Property Types with an ASP less than $1M. The remaining sections show activity for the luxury market as a group and the three predominant price ranges: $1M-$1.9M, $2M-$2.9M and $3M .
Overall. the number of sales declined -6% Keys-wide: Key West -12%, Upper Keys -10%, Lower Keys -1% and Middle Keys 2%. Nevertheless, the ASP was up 5%: 18% in the Middle Keys and Key West, 12% in the Lower Keys while the Upper Keys was off -13%.
All property types with an ASP less than $1M experienced an -8% decline in number of sales: -15% for KW, -11% in the UK, -3% in the LK and -1% in the MK. Overall the ASP up 2%: 9% for the MK, 5% in the LK, no change in the UK and -1% in KW.
Luxury properties, as a composite group, continued the trend started in January 2016 with increased numbers of sales each month, except for -6% in June and July, increasing to 22% in December, 25% in January 2017, 20% in both February and March. The March increase resulted from increases of 76% in the MK, 58% in the LK, 22% for KW, with only the UK declining -11%.
Despite luxury properties accounting for just 11% of all Keys-wide sales: 10% UK, 11% MK, 5% LK and 15% KW, the ASP for each submarket area is significantly higher than that for all properties: 70% UK, 64% MK, 68% LK and 57% KW. When combined with increasing sales produced a higher ASP for all submarkets except the UK that had -11% drop in luxury sales.
Which price brackets within the luxury property market had the greatest impact on the overall Keys market? Overall the $1M-$1.9M price bracket accounts for 75% of luxury sales: 62% UK, 88% MK, 93% LK and 73% KW. Sales increased 103% in the MK, 65% in the LK, 1% in KW and declined -30% in the UK. The ASP increase for the MK and LK came primarily from this price bracket.
The $2M-$2.9M price bracket sales rose 125% in KW and 31% in the UK while declining -100% in the LK (0 vs 1 sale previous year) and -14% in MK.
For the $3M price bracket, sales were up 123% Keys-wide: 300% KW (12 vs 3), 100% LK (2 vs 1), 86% UK with no change in the MK.
In summary, the luxury property market has played a significant role in the overall increase in ASP across the Keys:
· Keys-wide: All Property Types ASP increased 5% while All Property Types ASP less $1M rose 2%.
The 20% increase in luxury properties sold accounted for the overall increase.
· Upper Keys: All Property Types ASP decreased -13% while All Property Types ASP less $1M had no change.
The -11% decrease in overall luxury properties sold accounted for the overall decrease.
· Middle Keys: All Property Types ASP increased 18% while All Property Types ASP less $1M rose 9%.
The 76% increase in luxury properties sold accounted for the overall increase.
· Lower Keys: All Property Types ASP increased 12% while All Property Types ASP less $1M rose 5%.
The 58% increase in luxury properties sold accounted for the overall increase.
· Key West: All Property Types ASP increased 18% while All Property Types ASP less $1M declined -1%.
The overall 22% increase in luxury properties was driven by the 173% growth in $2M properties sold accounted for the overall increase.
Whether the luxury market will start to slow, as has the overall market, remains to be determined and will be addressed in our next Luxury Island Properties Report at the end of September.
The Leading Company for Sales & Listings of
Luxury Island Properties Keys-wide.
We welcome your thoughts and comments concerning the nature of the information in which you're most interested when planning the sale or purchase of a Luxury Island Property. Please email us at LuxuryIslandProperties@cbschmitt.com or write us at Coldwell Banker Schmitt, Luxury Island Properties Division, 11100 Overseas Highway, Marathon, FL 33050.