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The Florida Keys real estate market has momentum after Hurricane Irma.
“Everyone thought we were going to have a ton of distressed properties,” said David Grego, president of the Middle and Lower Keys Real Estate Association. “The truth is, whatever was available got bought up pretty quickly.”
The same sentiment is echoed throughout the Florida Keys chain. There wasn’t enough inventory before the storm, and there still isn’t afterwards.
“We are still showing an all-time low on listed properties for our inventory and our average days on the market is 112, well below previous years,” said Jo Ann Cook, broker for RE/MAX in Marathon. “We definitely have more buyers right now than we do properties to sell.”
Based on the data collected by the real estate association, the Middle Keys market has stabilized after the hurricane. The number of new listings this January was 146, compared to last year’s 224. Reinforcing the lack of inventory and motivated buyers, 76 listings were sold this January compared to 57 from last year. “We are selling more properties than are being replenished by new listing inventory,” Cook said.
Regarding distressed properties, “we are still getting a few calls every day, but there are very few on the market right now and people are not doing fire sales on these listings,” said Cook.
Cook anticipates an active selling season based on the number of inquiries and web hits being received compared to last year. “Last year we had a very strong July and August for sales and I am hoping for the same this year,” she said.
Patti Stanley, broker associate at Moorings Realty in Islamorada, said it’s a positive seller’s market right now. Last month, she had four closings in 12 days. She said from a homeowner, agent, and construction standpoint, the most frustrating thing is the permitting process. “Some are staying away from properties that need work because the process takes so long,” she said.
She added that it has been a long time since a storm has been thrown into this market. “The strong survived,” she said referring to the houses with no damage. “That gives buyers a lot of confidence when looking for properties.”
Grego said there were plenty of differences between Hurricane Wilma and Hurricane Irma. “In 2005, the market was a lot different and already on a decline,” he said at a recent Marathon Chamber of Commerce luncheon. “It wasn’t until 2013 that the market stopped dropping.”
Nationwide, the inventory of homes on the market have fallen to the lowest point in the last decade and home sales are down 3 percent.
“I believe the continued story in the Keys and nationwide for 2018 will be fewer homes available among strong buyer demand, which places upward pressure on home prices.”
— Will Langley, Berkshire Hathaway Knight and Gardner
Will Langley, principal broker at Berkshire Hathaway Knight and Gardner in Key West and president of Key West Association of Realtors, said the statistics are very interesting when looking at them island by island. “You can absolutely correlate the market activity to the impact of Hurricane Irma,” he said.
For Key West, it continues to be a story of low supply and high demand. Total residential properties on the market are down 9 percent year over year for Key West, whereas for Big Pine Key, the inventory is up 11 percent. “In a typical year, these numbers trend closer together,” said Langley. “The good news on Big Pine is that while the supply is up, so is the demand.”
Another important number monitored is the average sale price. The average sale price for Big Pine is down from $420,061 last year to $348,471 this year. In most other areas, the average sale price is up. Cudjoe Key is up the most significant, followed by Summerland Key, Geiger Key, Sugarloaf, Saddle Bunch and Key West. Key West falls just about even with last year’s average sale price of $782,773.
Interest rates also have an effect on the real estate market. The average interest rate for a 30-year fixed loan is 4.75 percent, up from 4.125 percent this time last year. “We expect interest rates to rise, but historically they remain low,” said Langley.
“I believe the continued story in the Keys and nationwide for 2018 will be fewer homes available among strong buyer demand,” Langley said, “which places upward pressure on home prices.