The Real Deal Miami

Keys sales knot unlocks

By Alexander Britell | May 22, 2009 12:46PM

As mainland South Florida sees a spike in sales, the tropical archipelago to the south, already affected by the crash, can claim a bit of a pickup as well. Both investors and primary homebuyers now see the Florida Keys as a source of bargains.

There were 278 sales Keys-wide in the first quarter of 2009, a 4 percent increase over the first quarter of 2009, the first time sales rose for the first three months of the year since 2004, according to a report by Coldwell Banker Schmitt Real Estate.

“We are really picking up down here, and a lot of stuff is going off the market,” says Margo Newman, of the Newman Team Coldwell Banker in Islamorada. “People who were here are coming back and finding that what they saw before is gone.”

“[The market] was bad, maybe not as bad as other areas, but this year was definitely better than last year first half, we’ve seen movement.”

Ms. Newman said buyers included not just investors as in previous years, but people looking to make Keys properties their primary residences.

“Our phones have been ringing off of the hook the last couple of months, from people that are looking. Sometimes it’s seemed like 2004-2005.

“For us it’s because we’re a very unique area, and a very small area. I do think we’re going to turn around a lot faster than anybody else.”

Approximately 260 residential properties were sold in the first quarter of 2009, with an average sale price of $497,659, working out to an average of $325 per square foot.

The Upper Keys, closest to mainland South Florida, including Key Largo and Islamorada, had the highest average sale price at $545,369, according to data provided by Tracy Larson of American Caribbean Realty.

“I’m definitely seeing and getting the feeling that our market is stabilizing here,” said Bascom Grooms, a broker in Key West. “Our inventory has decreased recently, we’re seeing a lot of lower-end properties going under contract, and ones that are priced appropriately seeing multiple offers on a lot of them. We’re starting to turn a corner.”

Grooms said the Keys might rebound quicker because its real estate fall started earlier compared to the rest of the country.

“I think we actually started our downturn sooner, in around 2005, where a lot of the country didn’t feel it until 2006. Our prices rose significantly from 2002 to 2005, we were experiencing 30 to 40 percent appreciation every year. In 2005, we hit a point where interest rates had gone up, property taxes were high, insurance was through the roof, so I think we had kind of the perfect storm for a real estate downturn.”

Grooms attributed the recent first-quarter spike to comfortable price levels.

“Prices have reached a level where people feel comfortable moving forward and making a purchase.”