January 2017 was fifth month in a row, Sept 2016 - Jan 2017, with less than ten sales in the Old Town area. Not in the past ten years has there been five consecutive months of sales below ten. In 2016, 1 bedroom, 2 bedroom and 3 bedroom homes all showed drop offs in sales. Inventory increased significantly in January. On December 15, 2016 there were 84 single family homes for sale in the Old Town area. By February 1, 2017 that number was up 52% to 128 properties. Whether this inventory boost will encourage sales through price competition as hypothesized in my 2016 End of Year Report is uncertain.
The below charts show sales of the seven most popular bed/bath combinations in Old Town Key West from January 1, 2007 to January 31, 2017.
These charts are for single family homes sold south and west of White St. and cover the neighborhoods of The Meadows, Old Town, Truman Annex and Casa Marina but not Sunset Key. You can view a neighborhood map here. The seven bed/bath combinations below contain enough sales to measure and evaluate trends after the 2004-2006 real estate Bubble.
- Zero, 1Bed/1Bath homes sold in the Old Town area thru 1/31/2017.
- The 2016 average sale price of $498,000 was 4% above the average sale price for 2015.
- In 2015, twelve 1/1 homes sold, the most since 2001. In 2016, 11 sold.
- The average size of the 2016 Solds was 621 sq.ft., slightly smaller than 2015; however, the 2016 average sale price per sqft. was $802. This figure was 12% higher than 2015 and highest since 2005.
- One, 2Bed/1Bath home has sold in the Old Town area thru 1/31/2017. The number of Days on Market was 79 days.
- The Sold price of $520,000 is 11% less than 2016 which was the same as 2015.
- Seven 2/1 homes are for sale with prices from $547K to $1.38M.
- Twenty-three homes sold in 2015, sixteen in 2016.
- Since 2009, 2Bed/1Bath homes have been the 3rd most popular selling home in Old Town with 147 sales.
2 Bath/2 Bed sales in Old Town went from 42 in 2015 to 26 in 2016.
- One, 2Bed/2Bath has sold in the Old Town area thru 1/31/2017. The Days on Market was 120 Days.
- The sold price of $910,000 is 32% above 2016 and 114% above the low in 2009.
- Twenty 2/2's are for sale, priced between $569,000 and $2.995M.
- The Sold price per sqft for the sale so far is $590, in 2016 the average was $614.
- Since 2009, 2Bed/2Bath homes have been the biggest sellers in Old Town Key West with 234 sales.
3Bed/2Bath home sales in Old Town went from 27 in 2014 to 21 in 2015 to 15 in 2016.
- Two, 3Bed/2Bath homes have sold in the Old Town area thru 1/31/2017. The average Days on Market was 54 Days.
- The average Sold price of $946,000 is 9% below 2016 which was 11% above 2015 and is 105% above the 2009 low.
- Average sold price per sqft. is $639, down 8% from 2016, primarily because the two homes sold are the smallest 3/2 homes sold since 2012.
- Twenty-seven 3/2's sold in 2014, twenty-one sold in 2015 but only fifteen in 2016.
- Since 2009, 3Bed/2Bath homes have been the 2nd biggest sellers in Old Town with 155 sales.
- One, 3Bed/3Bath home has sold in the Old Town area thru 1/31/2017. The Days on Market was 218 Days.
- The sold price of $1.08M is 24% below 2016 which was 20% above 2015.
- The Sold price per sqft. of $630 is down 15% from 2016 which, at $737, was the highest since 2008.
- Twenty-three 3/3's sold in 2014, nineteen in 2015 and nineteen in 2016..
- Since 2009, 3Bed/3Bath homes have been the fourth biggest seller in Old Town Key West.
- One, 4Bed/3Bath home has sold in the Old Town area thru 1/31/2017.
- The sale price of $1.22M is 40% below 2016 which was 31% above 2015. The 2016 average sold price of $2.038M was 141% above the 2009 low.
- The Sold price per sq.ft. is $718, 15% below 2016 which, at $846, was the highest since 2005.
- Number of sales and sales prices for 4Bed/3Bath homes is very choppy though there has been an upward trend in average sale price since 2013.
- Zero, 4Bed/4Bath homes have sold in the Old Town area thru 1/31/2017.
- In 2016 the average Sold price of $2.132M was 4% above the 2015 average Sold price which was 30% above 2014 and was the highest recorded.
- The 2016 average sold price per sq.ft. of $815 was 9% above the 2015 average sold price per sqft which was 24% above 2014.
- Since 2003, average number of annual sales is six, with nine sold in 2013, ten in 2014 and six in 2015.
- Year to year price action is choppy as a limited number of annual sales causes large fluctuations in average sales price.
There is no doubt that 99% of Sellers are asking full value or more for their properties, that their Realtors are encouraging such valuations and that Buyers are hesitant to pull the trigger on properties whose prices have returned to pre-bubble levels.
I strongly encourage Buyers to use all available tools, including Zillow and Realtor.com, to investigate properties and pricing so they see ALL candidate properties. There are some well priced properties available but Buyers may have to guide their Realtors to them.
An item to recognize is, buyers of Old Town homes in the pre-bubble timeframe of 2001 - 2005 were often buying primarily to flip. Many did not have the financial wherewithall to survive a shock to the market - aka Easy Money plus Hurricane Wilma in October 2005. Many abandoned their properties.
Conversely, the buyers of Old Town real estate 2011 - 2016 do have the financial wherewithall to survive a shock to the market. Most buyers have been buying to hold property - as evidence by the fact that regardless of sales price, during this period 60% of home sales have been in cash. You don't invest that much cash if you plan to sell in 12 months.
In conclusion, I do not see a bubble at this time. I do not see any domestic or foreign events shaping up to cause a bursting of the stock market, bond market or confidence market. A nasty BOOM notwithstanding, what I do see is a sagging of prices as Sellers reluctantly move their sales prices towards Buyers.
If you have any comments or questions, please contact me here.