[StarfishKey]

This article is not really a surprise. Anyone following the real estate sales in the Keys in the last few years can see a startling increase in prices for the type of homes for sale, and with respect to square footage. The economy has been rebounding strongly, with plenty of (wealthy) people now able to pay these higher prices, where a few years ago they did not have the extra money, or had to be cautious and save it instead.

Overall Keys property values rise $1.49 billion to $22.81 billion | News | KeysNet

This comes with good and bad news. For those who bought property during the crash, at least they did not lose money on their investment. But, property taxes will increase accordingly, and if one does not have a Homestead exemption (primarily because they are only seasonal residents, and/or own a second home), there is no cap on how much more they will have to pay as the economy continues to improve. Moreover, hazard insurance costs are going up every year, and for most homes are costing in the range of equal to the mortgage per year when added to the taxes. That makes it harder and harder to keep a home that you buy in the Keys with each passing year, assuming your finances are steady - which is not a given for many people.

The costs of govt. marketplace health insurance, car insurance, food, and supplies in the Florida Keys continue to be among the highest in the state (and the mainland US overall).

Additionally, rising housing costs mean that it is harder and harder for anyone but the 1% to buy, or in many cases even to RENT, homes here. It also pushes more people to buy below-flood housing, which in the case of pre-FIRM (older) houses, means it is legal - but the initial lower price tag never includes the extremely high flood insurance costs, plus cost to your health of mold that is likely in the house in air ducts or behind walls, plus costs of loss that insurance will do everything they can to avoid paying for in a storm. In many cases, below-flood houses here will flood (or their yards will) for long periods of time with no storm, simply because of sea level rise combined with some high tide event.



The Keys are all about dreamers, and this sharp increase means fewer people will be able to reach their dream (at least for now) of living in the Keys. If we get a bad hurricane as we are well overdue for experiencing, prices could plummet again and possibly even be lower than before - but then, you have to deal with whatever damage may have occurred to the prospective home due to the storm, and the certainty that hazard insurance costs will rise yet again.

For as long as that hurricane doesn't hit, prices will probably continue to increase. Meaning that Keys houses are to some extent a great investment, if you can afford the price tag in the first place. And certainly, every above-flood home also has great potential as a rental. But that too comes with complications, as the renter pool down here is likely to be irresponsible, underemployed, and generally of a partying state of mind. People will pay good money to rent even a room in a Keys house monthly (renting below-flood is illegal), but finding people who won't trash your place in the process, bring criminal activity to your property, and who will consistently pay the rent, will be a big challenge.

In the meantime, people who work hourly low-skill or no-skill jobs in the Keys are increasingly getting forced out due to the rising prices, which affect not only purchase costs, but rental prices. We have an official affordable housing crisis here, even before this latest news of property values on the rise. If you come down to rent, expect to work 2-3 jobs, and have have several roommates, just to afford to live in the Keys - that is the norm here for hourly workers. Even skilled positions like local teachers generally do not have enough money to pay for a full apartment on their salary alone, and even with a 2-income household will struggle to pay for housing if they have several kids. The rising prices also mean that landlords are even less flexible than before, so renting in the Keys with even one pet (much less multiples) becomes nearly impossible. One also will need to have good credit, no criminal background, and proof of local employment, as well as first, last, and security equal to 3x the rent, to rent nearly anywhere in the Keys. Vacation rental prices will also increase, but keep in mind some 98% of vacation rentals in the Keys are illegal, and code enforcement is cracking down - particularly on repeat offenders. That means hotel prices go up too.

The Keys are a beautiful place, with many plant and animal species unique to these islands and nowhere else in the world. Many people clearly feel these prices are worth it. But, for those who want to move here, you will have to assess if the sacrifice is worth it to you personally, and if it is even doable, given that there are few decent paying local jobs here. If you don't have a ton of savings, and you don't work remotely/telecommute either, this may be an unreachable dream for now.



The dream and the reality are for most people two very different things.

[bigh110]

I am so looking forward to moving to the Florida keys later this year!!!! Not sure yet about the job but who cares when ya have a place to live with a working A/C, a shower and a bathroom for dirt cheap. Plus i can also park a boat in the water too!! i got a little bit o savings to tide me over for a bit so i don't need work right away. I plan on getting in good with the local mangrove peoples population to find out the best practices for survival on very little money!!!

[City Guy997S]

I have to be honest......the FL keys seems like a bubble that is going to burst!

Traffic sucks, the tourists are ruining it, it is full of trailer parks and roadside t-shirt shops. The environment is paying the price for sure. The place is a zika virus or hurricane away from being the next Chernobyl wasteland.

[City Guy997S]

just as a reference point, I was down there 3 weeks ago (got to Marathon). My thought was, "I would never own real estate this far down (Duck Key) unless I had an airplane to avoid all this traffic!

[BNBR]

Originally Posted by City Guy997S

just as a reference point, I was down there 3 weeks ago (got to Marathon). My thought was, "I would never own real estate this far down (Duck Key) unless I had an airplane to avoid all this traffic!

Get an airplane

Marathon and Key West are both excellent airports. I fly there all the time. 1 hour from Ft. Lauderdale to Key West sure beats 4 hours driving. We do day trips and back by 4.

[Sugah Ray]

Originally Posted by City Guy997S

The place is a zika virus or hurricane away from being the next Chernobyl wasteland.

Yep, those radioactive Zika infected mosquitoes and Uranium hurricanes will destroy every living organism from Key Largo to Key West.

[floridarebel]

Houses in the Keys are expensive yet most of the homes there look like s***.

[katskill]

Ive considered Keys in the past but all it takes is ONE hurricance to upend your home value and market to tank.

[City Guy997S]

Originally Posted by BNBR

Get an airplane

Marathon and Key West are both excellent airports. I fly there all the time. 1 hour from Ft. Lauderdale to Key West sure beats 4 hours driving. We do day trips and back by 4.

That is very cool!

[Scratch33]

In the future, if & when Cuba becomes a regular resort (and investment) destination for Americans, I wonder what impact that would have on the economy of the Florida Keys? Obviously prices would have to come down to be competitive.