2015 started hot with record 1st Qtr Old Town area sales but each following Qtr fell short of the previous year with Aug, Oct, Nov and Dec each closing less than 10 sales. 2015 sales were off 5% from 2014. Sale price per square foot of $626 topped $600 for the second year in a row (2014 was $608, first ever over $600) with both the smallest (1bed/1bath) and largest (4bed/4bath) topping $700 per square foot. Yet 2015 average sales price was off 6% from 2014. Length of time to sell also increased with 2bed/1bath, 3bed/3bath and 4bed homes averaging 170 days or more.

The below charts show sales of the seven most popular bed/bath combinations in Old Town Key West from January 1, 2006 to December 31, 2015.

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.

The twelve 1bed/1bath homes sold in 2015 is the most since 2001.

• Twelve 1Bed/1Bath homes have sold in the Old Town area thru 12/31/2015.
• Average sale price of $479,000 is 8% above the average sale price for 2014.
• In 2014, eleven 1/1 homes sold. Buyers are very choosey about buying smaller Old Town homes.
• The average size of the twelve sold is 674 sq.ft., 13% larger than the 2010 - 2014 average.
• The average sale price per sqft. of $713 is 15% higher, than the 2010 - 2014 average.

• Twenty-three 2Bed/1Bath homes have sold in the Old Town area thru 12/31/2015.
• Average Sold price of $583,000 is 25% more than 2014 which was 13% more than in 2013.
• Six 2/1 homes are for sale with prices from $535K to $995K.
• Fifteen 2/1 homes sold in 2011, sixteen in 2012 and twenty-one in 2013 but only fourteen in 2014 so twenty-three sales for 2015 is very encouraging.
• Since 2009, 2Bed/1Bath homes have been the 3rd most popular selling home in Old Town

And the winner is 2bed/2bath homes with 42 sold at an average sold price 81% above the 2009 low.

• Forty-two, 2Bed/2Bath homes have sold in the Old Town area thru 12/31/2015.
• Average sale price of $769,000 is only 3% above 2014 and 81% above the low in 2009.
• Eleven 2/2's are for sale, priced between $495,000 and $1.33M.
• Average sold price per sqft for 2015 is $662, 15% more than 2014.
• Since 2009, 2Bed/2Bath homes have been the biggest sellers in Old Town Key West.

Average sold price for 3bed/2bath homes was 3% Below 2014.

• Twenty-one 3Bed/2Bath homes have sold in the Old Town area thru 12/31/2015.
• Average Sold price of $932,000 is 3% below 2014 which was 30% more than 2013 and is up 102% from the 2009 low.
• Average sold price per sqft. is $623, up 11% from 2014.
• Twenty-one 3/2's sold in 2013 and twenty-seven sold in 2014.
• Since 2009, 3Bed/2Bath homes have been the second biggest sellers in Old Town Key West.

Average sold price for 3bed/3bath homes saw 0% appreciation above 2014 and took longest to sell at an average of 204 days.

• Nineteen 3Bed/3Bath homes have sold in the Old Town area thru 12/31/2015.
• Average Sold price of $1.218M is the same as 2014 which was 20% more than 2013. Average sold price per sqft. of $671 is 1% more than 2014 and is up for the 5th year in a row.
• Twenty-seven 3/3's sold in 2012, the highest recorded, and twenty-six in 2013.
• Since 2009, 3Bed/3Bath homes have been the fourth biggest seller in Old Town Key West

• Seven 4Bed/3Bath homes have sold in the Old Town area thru 12/31/2015.
• Average sale price of $1.551M is 10% lower than the 2014 average sold price which was 59% more than the average Sold price for 2013.
• This Bed/Bath configuration has yet to solidly reverse price decline. HOWEVER. The twelve sales in 2012, the highest since 2008, and eleven sales in 2013, with a climbing average sales price per square foot, shows strength.

• Six 4Bed/4Bath homes have sold in the Old Town area thru 12/31/2015.
• Average sale price of $2.047M is 30% above the 2014 average Sold price which was 4% above 2013, and 92% above the 2009 low.
• Average sold price per sqft of $750 is 24% above 2014.
• Since 2003, average number of annual sales is six, with nine sold in 2013 and 10 in 2014.
• Year to year price action is choppy as a limited number of annual sales causes large fluctuations in average sales price.

Summary - Only the dark blue line for Jan - Mar #Closed All shows more sales than 2014.

Wells Fargo reports that except for motor vehicles and student loans, new consumption is being financed primarily from income, not debt. This blends well with the report, here, that cash continues to play a significant role in Old Town home sales.

For many Old Town buyers, that income contains a high percentage of non-salary income.  Morgan Stanley expects the US economy to grow less than 2% for 2016 and 2017 with 1% average earnings per share growth for the S&P 500.  Dividends too are under pressure as US companies face high tax rates, a tightening labor market (increases in total compensation?) and sluggish international markets.

Hence, the typical buyer for Old Town homes may not receive the non-salary income they need to buy Old Town properties.

Foreign buyers are generally missing from Old Town sales.  An appreciating dollar makes foreign buyers even less likely to buy fully valued Key West real estate.

Conclusion? 

Sellers should price their homes, regardless of condition, TO SELL this Jan - Apr 2016 "season" or be prepared to hold the property till next year. 

Buyers should negotiate aggressively and buy only to hold.  Those who buy properties needing improvements should expect minor mark-up from their post-sale improvements; i.e., if you add $200K in fix-ups to your purchase, then the purchase price plus $230K is your new price.

If the number of sales continues to slide, then prices will have to pull back in order to bring buyers back to the market. 

If you have any coments or questions you can contact me here.

Welcome to 2016!  Good luck!