A Brief History of Key West Real Estate Prices
May 30, 2025
Over the past century, Key West real estate prices have reflected the interplay of historical events, economic cycles, and shifts in demand. This brief overview of historical Key West real estate price trends outlines major inflection points in the pricing of single-family homes in Key West.
A Limited Commodity
As we have often discussed previously in these pages, Key West real estate prices and the local property market in general are subject to forces and effects that are to a large degree location-specific and unique. This is a place that has long captured the imagination of travelers, artists, adventurers, and investors with its blend of natural beauty, tropical charm, and specialized economic opportunities and activities. Land and homes here have historically been coveted commodities while at the same time, the isolation and space limitations inherent to the island location mean availability is constrained.
These factors tend to make Key West real estate values particularly sensitive to and reflective of the interplay of historical events, economic cycles, trends in development, and shifts in demand. A prime example of this effect can be seen with the recent COVID pandemic effect that caused a shift in many folk’s values around life and work that in turn played out in human migrations that effected the property markets in certain areas. As most everyone knows, Key West home prices took a major jump during the pandemic period and have continued to climb.
Look at this graph of estimated median sale prices for single-family homes in Key West from 1940 to 2025. The gold line represents nominal prices (in millions USD), while the magenta dashed line shows inflation-adjusted prices in 2024 dollars (early values are approximate due to limited data).
Key West home prices were very low pre-1980, rose steadily, then spiked in the 2000s only to crash in 2008–09, then recover and later climb to record highs. The “COVID Effect” acceleration is visible in the steepening climb around 2020.
Turning Points in Key West Home Prices
Now let’s build some context for these numbers with an overview of primary historic inflection points for home prices in Key West.
1900s–1950s: An Island in the Back of Nowhere
During the early to mid-20th century, Key West is best described as a sleepy backwater. At the dawn of the 20th century, Key West’s economy was still recovering from the decline of industries like wrecking and cigar manufacturing. Property values were stagnant or declining. Homes in the 1920s could often be purchased for just a few thousand dollars—or even less during the Great Depression of the 1930s.
After the 1935 Labor Day hurricane devastated the Upper Keys and the Great Depression drained national wealth, Florida’s overall real estate market slumped, and Key West was no exception. Many conch homes fell into disrepair. The Navy’s strong presence during WWII brought some economic stability, but prices remained modest. In the 1940s and early 1950s, a single-family home in Old Town Key West might sell for $3,000 to $7,000—affordable even for working-class families.
1960s–1970s: Bohemian Appeal and Slow Growth
By the 1960s, Key West began attracting a new population of writers, artists, and free spirits. The island remained inexpensive relative to other Florida coastal areas. A fixer-upper could be purchased for under $10,000, and even large historic homes were often under $20,000.
The 1970s saw modest appreciation, driven more by cultural cachet than economic fundamentals. Key West was still viewed as isolated and eccentric—far from the polished investment markets of the Miami Beach region. However, this decade laid the groundwork for the explosive growth to come as the island’s charm began to draw national attention.
The 1990s: Key West Goes National
As is reflected in the graph above, the 1990s cemented Key West’s status as a premium real estate market. The rise of second-home ownership, the popularity of cruise tourism, and robust national economic growth all fueled demand. Between 1990 and 2000, home prices nearly doubled, with median prices crossing the $200,000 threshold by the end of the decade.
During this time, the island’s constrained geography—with just 4 square miles of land—began to impact price dynamics more sharply. With little room for new development and growing demand, prices rose steadily across all neighborhoods, especially in Old Town, Casa Marina, and Truman Annex.
2000–2006: The Real Estate Boom
The early 2000s saw an unprecedented housing boom across the U.S., and Key West was among the hottest markets. From 2000 to 2006, home prices in Key West nearly tripled. The median price of a single-family home rose from around $250,000 to nearly $800,000 at the peak.
Low interest rates, easy credit, and speculative buying contributed to the surge. Luxury renovations and condo conversions were rampant, and bidding wars became common. This period marked the fastest real estate appreciation up to this point in Key West history.
2007–2011: Crash and Reset
The national housing market crash of 2007–2008 hit Key West hard, though perhaps less dramatically than in parts of inland Florida. Home prices fell by 30–40% in many cases, and the number of foreclosures rose. By 2011, the median home price had declined to the $450,000–$500,000 range.
However, the island’s desirability and limited inventory softened the blow compared to larger mainland markets. Still, the correction offered buying opportunities for long-term investors, retirees, and seasonal residents.
2012–2019: Recovery and Steady Gains
Following the Great Recession, Key West real estate entered a period of steady recovery. Tourism rebounded, and low interest rates once again made financing attractive. Between 2012 and 2019, home prices rose approximately 5–7% per year on average.
By the end of the decade, the median sale price of a single-family home was approaching $850,000, with luxury homes in Old Town and Casa Marina often selling for $2 million or more. Demand was driven not only by traditional snowbirds but also by younger buyers seeking remote work lifestyles in paradise.
2020–2022: Pandemic-Driven Price Spike
The COVID-19 pandemic paradoxically triggered one of the sharpest price increases in Key West history. With remote work becoming mainstream and urban residents fleeing crowded cities, demand for island living exploded and inventory plummeted.
Between 2020 and mid-2022, median home prices in Key West surged past $1.1 million. Cash buyers dominated the market, and homes often sold above asking price within days. The luxury segment saw record-setting sales, including $5 million-plus properties in the Casa Marina and Sunset Key enclaves.
2023–2025: A New Plateau?
By 2023, rising interest rates and broader economic uncertainty began to cool the market slightly, but prices remained historically high. The median price hovered between $1.1 million and $1.2 million, representing a 300–400% increase since 2000. Inventory levels remained tight, and new construction was virtually nonexistent due to strict building codes and space constraints.
As of mid-2025, the Key West real estate market shows signs of stabilizing at a high plateau. Demand remains strong for premium and historic properties, while buyers have become more selective. Despite fluctuations in interest rates and the national economy, Key West’s unique appeal, limited land, and cultural mystique continue to drive long-term value.
Key West Real Estate: Unique, Precious, and Dynamic
From its origins as a forgotten outpost to its current status as one of America’s most unique luxury markets, Key West has undergone a century of transformation. Key West home price history reflects broader social and economic forces, from post-war recovery to digital nomadism. If history is any guide, the island’s finite geography and enduring charm will continue to shape an upward trajectory over the long term.
In a one-of-a-kind property market like that represented by Key West and Lower Keys real estate, an expert guide is an essential asset. Whether you are buying or selling Key West real estate, Bascom Grooms Real Estate fields the team of local professionals that you need on your side. We know the history, can evaluate the future, and have the expertise it takes to reach the best outcome possible for you in our unique market. Contact us for all your Key West real estate needs.
Bascom Grooms Real Estate—1110 Truman Avenue, Key West Florida—(305) 295-7511—info@bascomgrooms.com
