Monday, October 30, 2006

Key West Real Estate Bubble At Risk of Bursting

If the laws of supply and demand are to be believed, then Key West's real estate market may be in trouble. Economic law says that too much supply in the market leads to falling prices.

Statistics recently released show that the number of properties listed for sale in Key West has hit a 5 year high - now over 1400 properties. This number is roughly three times the number of houses normally on the market, and 40% above a year earlier.

The rapid increase in the number of properties is astounding, but may be understating the weakness in the market. Many properties have been removed from the mls listings waiting for better prices. The wait for better prices may be significant, especially when the large number of developments underway begin to hit the market.

After the jaw-dropping rise in home prices over the past 5 years, there is plenty of room on the downside.

Currently, I've noticed Key West home prices have already been reduced by at least 20%, and the few that are selling are seeing increased selling times and further sales price discounts.

Next week is a well advertised auction for 22 Key West properties signaling the abundance of sellers.
Like this post? Let us know:


Anonymous said...


Key West has always been a feast and famine kind of town.

It almost sounds like you're hoping that Key West real estate will crash. That could hurt some people.

Do you own any property in Key West?


Cayo Dave said...

Yes, I hope that the real estate market in this town crashes. It is the only thing that will save the workforce and tourism.
And if the speculators that drove up the prices are hurt - than that is their problem. A fool and his money are bound to be parted.

Anonymous said...

let me see if i understand you.
you wish that the real estate market in key west crashes. that must mean that you don't care that people who own their homes (homesteaders) will see a significant decrease in their largest investment which will hamper their ability to borrow based on their homes worth. it also follows that the city will lose in real estate assessments which make up the majority of their taxes and income. this will necessitate raising taxes to pay in part for the foolish suits the city has lost and will lose as well as other foolishness the city plans( ie. $1.3 million to sink the vandenberg)
but wait a minute. it's ok. you don't own property here. you don't pay taxes to the city. you just look after yourself and the hell with the fools who pay taxes to this city. it's ok that you get a free ride on the back of those of us who work, live here and own homes here.

Cayo Dave said...

If you are borrowing based on your homes worth than you are on a path to financial disaster.
I don't care about what happens to the speculators that drove much of the workforce off the island.
It's attitudes like anonymous's that is least welcome - that only landowners have a vote. Go back to England and the 17th century!
Sounds like anonymous is a little leveraged?
Oh, and by the way, I think that taxes have no where to go but significantly higher - crash or no crash.