Key West and Lower Florida Keys Market Update – November 2025
The Lower Florida Keys housing market—stretching from Key West to Big Pine Key—is showing clear signs of transition after several years of price acceleration. As of October 2025, total active listings rose 13% year-over-year, while sales volume held roughly flat. This increase in supply is giving buyers more options and slightly more leverage in negotiations, marking a shift from the tight seller’s market seen in 2024. With 580 homes now on the market and an 8.5-month absorption rate, the balance is tilting toward a buyer-friendly environment, especially for mid-priced homes between $700,000 and $1.2 million.
Median sale prices across the Lower Keys real estate market fell about 10% year-over-year to $900,000, while the average price remained stable around $1.25 million. This gap between median and average values highlights a cooling trend in mid-tier price brackets, even as luxury homes above $2 million continue to trade—albeit at a slower pace. The average sale-to-list price ratio dipped to 94.9%, suggesting that buyers are successfully negotiating discounts compared to last year’s highs. In contrast, entry-level price points under $700,000 saw stronger absorption and multiple sales surges, signaling continued affordability demand from both local residents and investors.
Homes are also taking longer to sell. The average days on market increased 17% to 108 days, reflecting a more deliberate pace of decision-making among buyers. Meanwhile, pending sales dropped 27%, reaching their lowest level since 2020. That decline in forward contract activity is a critical early indicator that closings may slow through early 2026 unless buyer confidence rebounds. Sellers who adjust pricing in line with current absorption trends are still achieving results within 90–120 days, while those holding out for 2024 valuations are seeing limited showing activity.
Looking forward, the Florida Keys housing outlook points toward a mild but extended normalization cycle. If interest rates remain near current levels, inventory could peak near 800 homes in early 2026 before tapering later in the year. Analysts expect median prices to soften another 3–7% by mid-2026, with total sales volume down slightly (0–5% year-over-year). However, if pending sales recover to above 60 transactions per month by spring, the market could stabilize earlier than expected—especially if rate cuts or renewed relocation demand boost seasonal activity.
For buyers, the next 90 to 120 days represent one of the best opportunity windows in years to negotiate favorable terms, particularly in the $800k–$1.2M range where inventory is highest. For sellers, pricing within 5–8% of comparable sales and listing before February may capture stronger seasonal momentum. As the Key West and Lower Keys real estate market continues to evolve, success will favor those who act strategically—balancing realistic pricing with professional presentation and data-driven timing.
