Volume 17, Number 1
Keys-Wide Overview of Sales and Listings for All Property Types
Pending Transactions (properties under contract that have various contingencies to complete prior to closing, usually within the next 30 to 60 days) provide an indication of the number of properties that will close in that time frame. On December 31, 2017, 309 properties were pending, a -13% decrease from the same date in 2016.
The 2,286 Properties for Sale at the end of December 2017 was -18% less than the 2,782 in 2016 and -8% less than the 2,488 on that date in 2015. It is a -55% reduction from the peak of 5,084 in March of 2007. This is the single most important measure of our market. Based on the historical relationship between listings and sales, the number of sales cannot increase over prior periods until the number of listings decreases over prior periods. See the page two feature for additional information concerning this rule of Keys real estate.
The $571K Average Sale Price (ASP) was -2% less than the $581K for that same time frame last year, yet 8% higher than the $527K of 2015 which places the 2017 ASP in the range of the 2008 price of $588K. The peak to date for this century was $805K in 2006. The low was $273K in 2000.
The Average Listed Price (ALP) for 2017 of $910K is up 6% from $855K last year and 10% over $828K at the end of 2015. The ALP peak was $990K at the end of 2007, however, overall the ALP has steadily increased since the 2012 low of $695K.
The Dollar Value of Sales (DVS) declined -7% to $1.48B compared to $1.59B for 2016 and $1.70B for 2015 reflecting -5% fewer sales and a -2% drop in ASP. However, this is the third consecutive year of sales exceeding the billion-dollar mark which was last achieved in 2006. The record year occurred in 2005 at $2.3B in sales when the ASP was $782K and 2,752 properties sold. The lowest DVS occurred in 2008 with $685M from 1,166 sales with an ASP of $588K.
The Average Days to Sell (ADS) increased 7% to 153 days from 143 of 2016. The 2015 ADS was 158. The increase results from the Middle Keys market ADS increasing 49% to 201 from 135 ADS in 2016. The peak was 264 days in 2012 with a low of 140 days in 2004. (ADS reflects the number of days between the date the property was listed and the date the sale closed.)
The 11 Months of Inventory (MOI) is a -8% decrease from the 12 months in 2016 and a 22% rise over the 9 months of inventory at the end of 2015, and is -80% below the 55 months of March 31, 2008. The lowest MOI to date was 3 and it happened at the end of Q2 in 2004. (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) of 90.54% was virtually the same as the 2016 record high of 90.73%, and was 89.33% in 2015, the previous high. The record low of 62.49% came in 2009. (The OLP/SP compares the sale price of the property to the list price of the property at the time it first came on the market and provides a measure of the difference between many sellers’ initial list price and the market price acceptable to buyers.)
The Sale Price-to-Final List Price (SP/FLP) of 94.38% also was virtually the same as the 94.26% last year and a very slight increase over the 93.71% of 2015. (The FLP/SP 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, and reflects the average percentage of the final listed price that buyers are paying for properties that have sold.) The peak for this rate was 94.85% for 2004 and the low, 87.10%, occurred in 2009.
The margin between the OLP/SP (90.54%) and FLP/SP (94.38%) is 3.84%. That margin indicates, on average, that sellers can anticipate a price reduction of about 3.8% from their original listing price during the listing term prior to receiving a buyer’s offer. The previous low of 7% occurred in 2001 and 2005, with the largest variance being 25% at the end of 2009. Similarly, sellers and buyers today can expect the contract price, on average, to be -5.6% less than the final list price and about -9% less than the original list price. From 2001-2005, the average margin for FLP/SP was nearly -5% with the high being -13% for 2009 when the OLP/SP was -37.5%.
What do the Numbers Forecast? As noted above, the single best barometer of the market is the number of listings for sale and that number remains the lowest since the beginning of 2005. See the next feature to understand why we feel 2018 will be a good year for Keys real estate as interest rates remain low, buyer interest continues to be steady and there hasn’t been a dramatic increase in the number of listings on the market as we saw following Hurricane Wilma.
Hurricane Irma’s Influence on the Keys Real Estate Market
vs. Hurricane Wilma’s in 2005
We’re often asked how Irma has impacted the real estate market. Many people anticipated conditions would be analogous to those following Hurricane Wilma in 2005 which led to a doubling of the properties for sale and a similar decrease in the number of sales. The response to Irma, however, has been completely different with fewer properties for sale and increased sales levels vs. the post-Wilma levels.
The accompanying chart which presents the Keys-wide real estate market from January 2003 through December 2017 was developed to assist in understanding those differences. The blue line on the chart represents the number of listings on the market for each month. The yellow lines mark October 2005 when Wilma struck and September 2017 when Irma blasted the Keys. The red line shows the number of sales for each month throughout those 14 years.
Historically, the Keys market hasn’t experienced an increase in the number of sales without a preceding decrease in the number of listings. Otherwise stated, there’s an inverse relationship between the number of buyers and the number of sellers. There’s also a yearly cycle to the Keys market: Listings start to increase late in each year and then peak in the first quarter of the following year. Sales peak in April or May and decline through the third and fourth quarters. As you can see on the chart, a comparison of the blue listing line and the red sales line shows when the number of listings is low, sales are high, and when the number of listings increase, sales decline. It’s the number of listings (sellers) which precedes and essentially dictates the number of sales.
Please notice that the Keys had a low listing inventory from 2003 through 2005 until Q2 of 2005 when the number of listings began to increase over prior years. Also, note that the number of sales was high in 2003, 2004 and the first half of 2005 before starting to decline as the number of listings started to increase just prior to the arrival of Wilma. The result of that strong buyer market was that the ASP increased 31% in 2003, 30% in 2004 and 39% in 2005 as numerous buyers were flipping, which meant they quickly placed their purchases back on the market with an increased list price. Average sale prices went from $433K during 2003 to $910K in Q3 of 2005, a 110% increase. The dramatic increase in ASP priced many buyers out of the market, hence the steady decline in sales prior to the arrival of Wilma. Simultaneously, the Keys had, for the previous two years, experienced the most active hurricane seasons on record. When Wilma arrived in late October there were 2,700 listings on the market. That rapidly grew to 3,500 by December and to over 4,500 in January 2006. Why all the listings? The psychological state of many home owners after so many recent close calls from hurricanes, the widespread flooding from Wilma and the decline in buyers caused them to put their properties up for sale, many leaving the Keys. At the same time, Buyers felt reluctant to purchase with so many people selling and leaving the Keys. Then came the great recession which continued the decline in sales for years after.
The turning point commenced at the beginning of 2009. Sales steadily increased during the year and listings declined below 4,000. They continued declining to a low of 2,137 in October 2017 -- the lowest number of listings since January 2005 -- while sales increased at a modest rate each year through 2015. Then, after almost 7 years of declining listings, we experienced a 12% increase in listings in 2016 which resulted in a –10% drop in sales over the prior year.
What is different about the post-Irma market? First, the market has been relatively stable, i.e., the number of listings has declined about -5% per year on average since 2011. Meanwhile, the ALP has increased, on average, by 4% per year; the number of sales has increased, on average, 4% per year; and the ASP has been rising, on average, 6% per year. Second, the Keys has not been subject to serious hurricane threats year-after-year. Irma was the first major hurricane to strike the Keys in 12 years. Unlike after Wilma, most owners have significant equity in their properties and there are virtually no distressed properties. As a result, the mindset of most owners to date has been to repair their property and remain in the Keys. For that reason, the number of listings on the market since September 2017 has remained below the number of listings on the market each month since January of 2005 and the modest increases we’ve seen follow the normal annual cycle of the market: they start increasing late in each year and peak during the first quarter of the following year. We, therefore, look forward to 2018 being a good year for the Florida Keys real estate market with more sales and, ultimately, improving average sales prices.
Visit Our New RentalsFloridaKeys.com Site
Florida Keys Vacation Rentals Inc. (FKVR), our sister company, has just relaunched its website, RentalsFloridaKeys.com, with a new, mobile device-friendly interface, simplified vacation home search, and new features intended to make it a resource to help visitors get the most out of their time in the Keys as well as for finding their ideal vacation home.
FKVR manages rentals for hundreds of short-term vacation rental properties and, like Coldwell Banker Schmitt, operates from one end of the Keys to the other. Rental agents are present in our Key Largo, Islamorada, Marathon, Big Pine Key and Key West offices.
In addition, the site offers live chat available 24/7/365, a click-to-call option that directly connects visitors with a rental agent by phone during business hours, and contact forms on each property page.
Site visitors will find a simplified search app on the home page. Select a Keys area, enter the number of guests and dates (optional) then view results that show map locations and can be sorted by price and number of bedrooms.
The Rental Search page lets visitors fine-tune their search parameters by city/key, type of residence, bedrooms, baths and preferred amenities.
Property pages carry photos, virtual tour/video links, descriptions, a list of amenities, availability calendar and map location. Visitors can tag properties as Favorites for later review.
The site Keys Guide presents detailed information about each area with suggested activities and attractions, up-to-the-minute weather information, and a Yelp interface which lets visitors see reviews and rankings for restaurants, shopping, diving, fishing, arts & entertainment, beaches, bike rentals, boating, parks, kayaking, coffee/tea, tours and nightlife. It also carries the live Keys-wide calendar of events maintained by the Florida Keys Tourism Development Council.
New to the site is a portal through which guests can pay online once they’ve received a confirmation code from us, making it a safe, secure and simple process.
Our owner portal lets property owners view their availability calendar integrated with the time they’ve blocked out, statements and reports, and current reservations in the system.
The Vacation News page carries our blog and a feed from our Facebook page (Facebook.com/FLKeysVacationRentals/). Please visit and let us know how you like it.
Get an instant estimate of your home’s value here.
|Key Largo||(877) 289-0035||100430 Overseas Highway|
|Islamorada||(800) 207-4160||85996 Overseas Highway|
|Marathon||(800) 366-5181||11050 Overseas Highway|
|Big Pine Key||(800) 488-3050||29967 Overseas Highway|
|Key West||(800) 598-7727||1201 White Street, Suite 101|
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