Favorable inventories and interest rates helped inoculate the Florida Keys real estate market from the economic impacts of COVID-19 in 2020, one of the best years for sales in recent decades, local industry experts say.
Approximately $2.2 billion in property sales were recorded in 2020, falling just shy of 2005, when $2.3 billion in sales took place, according to Coldwell Banker Schmitt’s just-released real estate report.
The year began strong, but sales declined when the Keys were closed temporarily to non-residents to limit the spread of coronavirus. Once the island chain reopened in June, sales took off.
The 3,290 sales Keys-wide in 2020 was up 14.2% from 2,822 in 2019, nearly hitting the high-water marks of 2003 and 2004, when sales peaked at 3,510 and 3,370, respectively, according to the report.
The average sale price of $671,703 was up 7.8% from $619,048 in 2019 but was less than the highest on record of $802,000 in 2006.
The Middle Keys led in average sale price with an 11.9% increase over the prior year, followed by the Upper Keys at 11.6%, the Lower Keys at 10.6% and Key West at 6.6%, the report found.
The inventory of properties for sale reached its third lowest annual level with 1,817, a 31.4% drop from 2,459 in 2019. The lowest ebbs were 1,545 in 2003 and 1,818 in 2004.
“With continued low inventories and interest rates, the real estate market will continue to perform well in 2021,” according to Coldwell Banker Schmitt’s report. “The first sign of any change in the market will be increasing inventories, which will signal a decrease in sales as it did in 2005 when that occurred and went undetected until [Hurricane] Wilma emphasized the trend for more listings, resulting in fewer and fewer sales as inventories increased.”
There were 404 pending sales Keys-wide at the end of 2020, compared with 266 at 2019’s end and 271 in 2018.
“The level of pending sales is the best predictor of what the months ahead hold in store,” according to the report. “The number at year end is well ahead of what we’ve experienced in recent years, underlining the Keys’ appeal as a destination with an attractive lifestyle for location-independent buyers.”
Keys-wide, the average time a property sat on the market did not change from 2019’s figure of 120 days.
The number of properties listed for sale at the end of 2020 was lower than in 2019. The fall-off was most dramatic in the Upper Keys, where inventory was down more than 40%. It was lower by 26% in the Lower Keys, 19% in the Middle Keys and 4% in Key West, the report found.
A recent economic report by Lawrence Yun, chief economist for the National Association of Realtors, characterized the United States market as “roaring” over past activity despite the nation losing 10 years of job growth last April.
Nationwide, pent-up demand, low inventories and an average mortgage rate of 2.65% have been driving the market, according to Jim Larson, a residential specialist with Keller Williams Premier Properties.
“In Florida, we are continuing to see an influx of global and out-of-state buyers, mostly from high-tax northern states,” Larson said. “The bottom line is this growth is expected to continue well into the year.”