Performance Analysis of Key Biscayne Real Estate Investments

Jacqueline Gallardo Group May 20, 2024

Performance Analysis of Key Biscayne Real Estate Investments

Located 10 minutes from Downtown Miami via the Rickenbacker Causeway, Key Biscayne is a stunning and unique barrier island community embodying South Florida's upscale coastal living. Known for its pristine beaches, championship tennis facilities, and prestigious schools, Key Biscayne perfectly balances laid-back island charm and vibrant city sophistication. The island is also home to world-class hotels and restaurants, making it a sought-after destination for tourists and business travelers.

Key Biscayne's Island Lifestyle

Key Biscayne's extraordinary lifestyle drives its enduring appeal. The community is known for beautiful beaches and a relaxed, laid-back lifestyle, boasting a thriving cultural scene. Art galleries, boutique shops, and gourmet restaurants feature across the landscape, offering residents and visitors a taste of the island's vibrant culture.

The island's prestigious residents include athletes, celebrities, and business moguls drawn to Key Biscayne's natural beauty, seclusion, and exclusivity—even with the urban conveniences of Miami moments away, this is genuine island living at its finest. Whether you are a beach enthusiast looking to soak up the Florida sun, a nature lover exploring Crandon Park or Bill Baggs Cape Florida State Park, or someone enjoying the good life, Key Biscayne has something to offer everyone.

Real Estate in Key Biscayne

Buoyed by its unique location and status, the Key Biscayne real estate market is a trove of exceptional properties catering to diverse tastes seeking out the town's celebrated lifestyle. Whether searching for a cozy beachfront condo, a luxurious oceanfront estate, or anything in between, this island community offers something to suit every need. Given the area's desirable location and impressive amenities, the housing market is competitive, with properties ranging from chic modern residences to sprawling waterfront compounds.

Performance Analysis of Key Biscayne Real Estate Investments

Given its location and finite land area sandwiched between two popular and protected parks, Key Biscayne real estate is highly valued. Vacant land is scarce, and any new development is of the teardown and build new variety. The marketplace itself is defined by its two halves—homes to the west of Crandon Boulevard, the town's main artery, and condos to the east.

1st Quarter Market Trends

Compared to Miami-Dade County's mainland luxury enclaves, the Key Biscayne luxury market has begun the year on a relatively benign note. For Q1 2024, the median sales price for a Key Biscayne single-family home closed at $3.2 million, down 4% from Q1 2023. Single-family transactions, however, were up by 300%, an increase from three in Q1 2023 to 12 for the first three months of this year. Homes spent an average of 93 days on the market in Q1 2024. More volume at a slightly lower price point proved a boon for buyers seeking transactions in the market's slower months.

Key Biscayne's condo market fared slightly worse in the year's first quarter. Though condos saw a similar 4% decrease in the median sales price from Q1 2023 to Q1 2024—from $1.75 million to $1.68 million—condo transactions were down 52%, from 27 in Q1 2023 to 13 in Q1 2024. Condo listings spent an average of 100 days on the market in Q1 2024.

Current Market Activity

Although market reporting has yet to be finalized for April 2024, preliminary numbers show a significant increase in condo transactions. For April, there were 21 reported condo sales in Key Biscayne, with another five reportedly sold the first week of May. Key Biscayne homes are selling much slower, with only four reported home sales in that same April 1 to May 7 timeframe. However, one of those sales was an $18 million waterfront property on Mariner Drive with 300 feet of canal access and views of the adjacent Cape Florida State Park.

As of the first week of May, the Key Biscayne market features 30 active single-family home listings with a median list price of $5.425 million and 102 condos for sale with a median list price of $1.48 million.

Advice for Buyers

Buyers seeking Key Biscayne Real Estate Investments, whether as a permanent residence, vacation home, or income property, consider the following:

Leverage Growing Inventory: With more options becoming available than in previous years, particularly in the market's ultra-high-end luxury segment, take the time to assess and compare properties to ensure you're getting the best value. This is especially true in the ballooning condo segment, which has seen several new listings since May 1.

Watch for Price Corrections: Be aware of price corrections, especially in single-family homes priced below $8M, as increasing inventory may push prices down in the coming months. Of the market's 21 listings priced below that threshold, 57% have been on the market for more than 100 days, an average of 175 days among them. Less of a concern is the condo market, where new listings are showcasing highly competitive prices.

Evaluate Premium Listings: Not all listings priced at a premium level justify their asking price, particularly with high mortgage rates complicating the purchase process. Work with a knowledgeable local agent to distinguish between genuinely premium properties and those overvalued due to current market trends.

Advice for Sellers

As 2024 sees the Key Biscayne market far more balanced than in years past and buyers much more risk-averse, sellers must be strategic in their positioning and pricing strategies.

Fair Pricing is Key: With continued high mortgage rates, the market favors sellers less and less. For sellers, this means that competitive pricing is essential. Regardless of price points that fall under the $10 million threshold, a competitive price structure will continue to invite broad interest and multiple offers. In addition, emphasize your property's unique qualities to distinguish it from properties still clinging to record-high, pandemic-era listing prices without offering the amenities or justification to do so.

Maximize Opportunities in High Demand Segments: Dig deeper into your property's specific listing segment to see if your residence is in high demand. While overall inventory remains relatively low, some segments are outpacing demand. Finding out where your property fits can inform when and how much you should list it to maximize its sale.

Be Prepared for Market Shifts: Monitor market dynamics closely and be prepared for price adjustments, particularly in the top-tier segment. Current predictions still foresee a drop in interest rates as the year progresses, bringing more buyers into the market. It could prove a lucrative time to list a sought-after Key Biscayne house or condo.

Explore Key Biscayne Real Estate Investments with a Trusted Partner

Are you a buyer interested in learning more about Key Biscayne's unparalleled island lifestyle? Or a seller seeking insight on how to best position a property to sell amidst shifting market dynamics? Contact the Jacquie Gallardo Group today to explore your Key Biscayne real estate investment options.

*Header photo courtesy of the Jacquie Gallardo Group’s website

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