Key West Real Estate Market Update: February 2026

The Key West real estate market is continuing to shift as we move into 2026. After several years of rapid appreciation and highly competitive conditions, the market is beginning to normalize. For buyers and sellers alike, understanding these changes is key to making informed decisions.

This February 2026 market update breaks down the latest trends in pricing, inventory, days on market, and overall activity to help you better understand what is happening in the Key West housing market today.

Overview of the Key West Housing Market

The current market can best be described as stabilizing. Prices are adjusting from previous highs, homes are taking longer to sell, and overall transaction volume has slowed. These are all signs of a market transitioning into a more balanced environment.

While the pace has shifted, it is important to note that demand has not disappeared. Serious buyers are still active, and well-positioned homes continue to sell.

Home Prices in Key West

One of the most noticeable changes in the February 2026 data is the adjustment in home prices. The median sale price decreased approximately 13 percent compared to February of last year. The average sale price saw a more modest decline of about 3.5 percent year over year. Active median list prices also dropped by over 12 percent.

These shifts indicate a correction rather than a downturn. Pricing is adjusting to more sustainable levels after the peak market conditions of previous years.

For buyers, this creates new opportunities to enter the market with more negotiating power. For sellers, it reinforces the importance of pricing homes accurately from the start.

Days on Market and Buyer Behavior

Homes in Key West are now taking significantly longer to sell.

The average days on market increased to 103 days, while the median days on market rose to 90 days. Both metrics are up substantially compared to the same time last year. This change reflects a shift in buyer behavior. Buyers are taking more time to evaluate options, compare properties, and make decisions. The urgency that defined the market in prior years has eased.

For sellers, this means that preparation, presentation, and pricing are more critical than ever. Homes that are properly positioned still sell, but the margin for error is smaller.

Sales Activity and Market Pace

The number of closed sales declined by approximately 35 percent compared to February 2025. Pending sales were also down by roughly 29 percent, and year-to-date sales have decreased by over 20 percent. This slowdown in activity is typical during a market transition. Higher interest rates, pricing adjustments, and broader economic factors are all contributing to a more measured pace.

However, it is important to recognize that transactions are still happening. Buyers who are in the market today tend to be more serious and intentional, which can lead to smoother transactions for well-prepared sellers.

Inventory and New Listings

Inventory levels in Key West have remained relatively stable, with active listings down slightly by just over 2 percent year over year.

New listings, however, have dropped significantly by more than 30 percent. This reduction in new inventory could help support pricing as the year progresses, especially if buyer demand remains steady.

A lower influx of new listings means less competition for sellers who choose to enter the market now, provided their homes are priced and marketed correctly.

Market Balance and Absorption Rate

The absorption rate currently sits at approximately 11 months of inventory.

In real estate, a balanced market is typically considered to be around six months of inventory. With inventory levels above that threshold, the Key West market is still leaning in favor of buyers.

This gives buyers more leverage in negotiations and more time to make decisions. Sellers should be aware of this dynamic and adjust their expectations accordingly.

List to Sale Price Ratio

Homes in Key West are currently selling for about 90 percent of their original list price on average. This indicates that price reductions and negotiations are common. Overpricing a property can lead to extended time on market and ultimately lower offers. Sellers who price their homes strategically from the beginning are more likely to attract strong interest and achieve better outcomes.

What This Means for Buyers

Buyers in today’s Key West market have more opportunities than they have seen in recent years. Increased inventory, longer days on market, and more negotiability create favorable conditions.

This is an ideal time for buyers to be strategic, conduct thorough due diligence, and secure properties at more favorable terms.

What This Means for Sellers

Sellers can still achieve strong results in this market, but success requires a more thoughtful approach. Accurate pricing, high-quality marketing, and strong property presentation are essential. Homes that are priced correctly and marketed effectively are still selling, even in a slower market.

Working with an experienced real estate team can make a significant difference in navigating these conditions.

Key West Real Estate Market Outlook

The Key West real estate market is not declining; it is stabilizing. Price adjustments, longer timelines, and reduced transaction volume are all part of a normal market cycle.

Looking ahead, limited new inventory combined with continued buyer interest could help support pricing and create opportunities on both sides of the market.

If you would like a personalized analysis of your property or guidance on navigating the current market, the ShineGroup team is here to help!