Housing market continues to show signs of improvement

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UPPER KEYS -- Local home prices saw healthy increases during the first quarter of this year, while the total number of sales dropped.

Still, the rising prices reinforced views that the market has bottomed out.

"We believe that the only mistake a buyer can now make is not to buy a property in the Florida Keys," wrote the Coldwell Banker Schmitt Real Estate Co. in its quarterly newsletter.

The statement was the strongest Coldwell Banker has made since the market began spiraling down in 2006, owner Brian Schmitt said.

According to Multiple Listing Service figures provided by the agency, the Upper Keys median home price from January through March was $315,000, up 5 percent from the $300,000 average during the same months last year. The median price is the number at which half of the residences cost more and half cost less.

The average Upper Keys price took a much larger leap of 24 percent, rising from $380,000 during the first quarter last year to $472,000 during the first quarter this year.

MLS data does not capture homes listed by owner, nor does it include homes sold inside the gates of the Ocean Reef community on north Key Largo.

Various types of Upper Keys residential properties experienced the first quarter price increases, MLS data prepared by Tracy Larson of Century 21 Schwartz Realty show.

Prices went up on dry-lot homes, oceanfront homes and condos.

Canalfront homes saw the steepest increases, jumping 42 percent, from $521,000 during January through March of 2011 to $741,000 this year.

"I believe our market is becoming more and more stable," Larson wrote in an email last week.

Data prepared by Realty World Freewheeler showed that among Upper Keys areas where there were at least 10 residential sales, Lower Matecumbe Key brought the highest average price at $832,000. The lowest average price, at $338,000, belonged to the north half of Key Largo.

The Upper Keys outperformed other areas of Monroe County housing market, according to the Coldwell Banker analysis. Overall, the median Florida Keys home price was $307,000 in the first quarter, down from last year, but by less than 1 percent. Meanwhile, the average price Keyswide increased 3 percent.

Still, not all the news was upbeat for the Upper Keys market. The total number of home sales during the first quarter was down 10 percent from last year, just as it was throughout the Keys. And distressed properties still made up 30 percent of the sales.

For-sale inventories also still pose a problem. Though the backlog of properties on the market continues to drop from a high point of 55 months in early 2008, inventory remains at 20 months, according to Coldwell Banker.

Analysts say that in most areas six months is the threshold figure that is indicative of a healthy housing market. But inventory tends to run higher in places like the Keys, where owners of second homes make up a larger portion of the market.

Russ Post, broker/owner of Ocean Sotheby's offices in Islamorada and Ocean Reef, said high inventory levels continue to be a problem for lower end properties. But he too said the overall outlook is positive.

Buyers, Post said, have become less fearful of a double-dip recession.

"They have decided that's not going to happen, and that while the economy's not great, it will slowly continue to claw its way back," he said.