Keys Homes are selling, but for less

Echoing trends around the region and throughout much of the nation, area real estate sales were up in the second quarter compared to the same period last year, though prices continued to decline.

From April 1 to June 30 there were 249 residential sales between Key West and Mile Marker 107 in Key Largo, up 20 percent from the last year. But the average home price dropped 24 percent, from $640,000 to $483,000.

Total Keys real estate sales, including commercial properties and boat slips, trended similarly during the second quarter. From Key Largo to Key West, 396 properties were sold in April, May and June, 11 percent more than last year. The increase was the first since the market peaked in 2005, but it came along with a 23 percent decline in the average sales price, to $480,000.

The news wasn't quite as good in Key West, where total home sales fell 5 percent in the second quarter of this year compared to 2008. However, that represents only six fewer home sales in the second quarter of 2009, dropping to 121 from 127 last year during the same three-month period.

The average sales price in Key West dropped 20 percent, from $651,000 to $519,000.

The majority of sales in Key West -- 73 percent -- have occurred on homes priced at $499,000 and under. Another 15 percent occurred among homes prices from $500,000 to $999,000. The other 12 percent was for homes prices $1 million and up, which accounted for 15 home sales.

Upper Keys residential prices remained higher over the spring than other parts of Monroe County.

The average residential sales price from April through June was $562,000, which is $82,000 more than the county as a whole, but off 21 percent from last year, according to the American Caribbean analysis.

The number of Upper Keys residential sales -- Ocean Reef not included -- increased from 90 to 109, with the gains spread across various types of properties, from open-water homes and dry lots to condos and mobile homes.

The average price of the 26 condos that sold, however, decreased 29 percent, from $526,000 to $373,000.

Drops in housing prices, and increases in the homes sold, extend beyond the Keys into the rest of Florida and much of the country. Nationwide, home sales were up 3.8 percent in the second quarter when compared to the first quarter of this year, according to the National Association of Realtors.

In Florida existing homes sales in June were up 28 percent over last year while prices dropped 28 percent. In addition to low prices, friendly interest rates and tax incentives have fueled demand, leading many economists to be optimistic that, though distressed home and foreclosure rates remain high, the housing market is beginning to right itself.

In the Keys, the inventory of properties offered for sale was down 21 percent during the first half of 2008, a positive sign for a market that's been oversaturated with supply. The backlog of properties stood at 34 months, the lowest since 2006 but still way above the three to 10 months that presided from 2002 through much of 2005.

The Keys market is on a slow but steady course to recovery, but is still burdened by foreclosures and short sales as well as the tight lending market. Price stabilization is 18 to 24 months away given the current market and economic factors at play.