Monroe County Real Estate Forecast 2026

Expert commentary + data-driven predictions from ShineGroup — what Keys buyers, sellers, and investors need to know next year.

Key takeaways up front

• Prices are cooling but remain high — Monroe County’s median home price sits well over $900K–$1.2M depending on the dataset, and the market is showing signs of normalization after pandemic-era highs. 

• Inventory and days-on-market are rising, giving buyers more options and bargaining power in many segments. 

• Short-term rental (STR) rules remain a major driver — stricter permitting, zoning, and advertising rules are reshaping the STR investment thesis across the Keys. Compliance and local licensing are essential for 2026. 

• Tourism fundamentals are steady (occupancy and TDT revenues holding), supporting vacation-rental demand—though growth is more modest than prior years. 

1) 2025 context → how it shapes 2026

2025 closed with higher inventory and longer time-to-sale compared with the red-hot market of 2020–2022. Median listing and sale prices in Monroe County remain among Florida’s highest, but month-to-month figures show a softening trend rather than a crash. That combination points to a gradual market correction in 2026 rather than a sudden droP especially for non-waterfront, non-luxury homes. 

Why this matters: sellers who priced aggressively in 2021–22 will need to be realistic; buyers can find better negotiating leverage on more listings.

2) Price & inventory outlook (what to expect)

• Price range: Expect a modest downward or flat adjustment (low single-digit percentage range) for many neighborhoods in 2026 as mortgage rates continue to influence affordability and sellers adjust to new comps. Luxury waterfront properties and unique island estates will be more resilient. 

• Inventory: More active listings and moderately longer days on market give buyers time to compare, and could push some sellers to offer incentives (credit for insurance, closing assistance, flexible escrow). 

• Renter demand: Seasonal tourism remains supportive for demand in desirable short-term markets; mid-term and long-term rentals may see upticks as buying becomes less affordable for some.

3) Short-term rentals & regulations — the biggest variable for investors

Regulatory changes are the single largest risk/reward factor for STR investors heading into 2026. Monroe County’s Special Vacation Rental Program and city-level licensing in places like Key West require permits, manager licensing, and advertising that reflects minimum stay requirements. Non-compliance risks fines, delisting from platforms, or permit denial. 

Prediction: Local governments will continue to refine STR policy expect stricter enforcement, clearer permitting timelines, and potentially more caps or zoning-based restrictions in higher-density areas. Investors must add regulatory risk to underwriting models.

Action for investors: before you buy for STR income, verify (1) zoning, (2) permit pathway, (3) local occupancy taxes and TDC registration, and (4) realistic occupancy/ADR assumptions accounting for possible 28-day minimums in some districts.

4) Neighborhoods & product types to watch

• Old Town Key West / Historic Core: Remains premium—strong demand for turnkey, historic cottages; limited supply keeps values higher. STR rules and historic preservation may limit investor conversions. 

• Waterfront & island estates: Luxury will stay resilient; buyers seeking lifestyle and scarcity will continue to compete.

• Marathon / Lower Keys: More land and comparatively lower entry price for waterfront living attractive to second-home buyers and longer-term rentals.

• Infill / condos / 55+ product: With affordability pressures, look for growth in condos and age-restricted communities that target downsizers and seasonal residents.

5) Insurance, climate risk & lending — practical considerations

• Insurance costs & availability continue to be a top practical factor for transactions in the Keys. Underwriting changes and higher premiums will affect net buyer budgets and should be forecasted into offers.

• Flood risk and resiliency measures (elevations, impact windows, newer roofs) are increasingly valuable in pricing and in qualifying for better insurance rates.

ShineGroup tip: show buyers an insurance estimate early in the process. It’s a deal-maker (or breaker) in many Monroe County transactions.

Final word why ShineGroup is your 2026 Keys partner

The Keys market is local, nuanced, and heavily influenced by regulations, tourism, and climate-related costs. ShineGroup blends island-level market intel with hands-on transaction experience and community connections. Whether you’re buying a cozy Old Town cottage, selling an estate, or evaluating an investment with STR risk, we provide the data, local insight, and tactical guidance you need.

Want a custom Monroe County market snapshot for your neighborhood or an investment feasibility model? Tell us the address or property type and we’ll build a tailored analysis with local comps, projected cash flow, and compliance checklist.

— Krystal & Jess