Key West Listings Are Sitting Longer But Only If They're Overpriced

Written by:

Rudi Davis

Date:

17 Jan 2026

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Walk into a Sunday open house in Key West’s historic Old Town, and you’ll see a different scene than just two years ago. Instead of buyers lining up outside Victorian cottages and bidding over the asking price, most listings now see just a few showings each weekend. Homes that once sold in under a week are now averaging 20 to 30 days on the market.

The Florida Keys luxury market has cooled since its post-pandemic peak, and sellers are learning a straightforward lesson: price your home accurately, or expect it to linger.

Where the Market Stands Now

Following a surge from 2020 through early 2023—fueled by remote workers and intense competition—activity has slowed. Inventory is rising as more second-home owners list their properties for sale, coinciding with the winter influx of northern buyers. But the bidding wars of the past have faded, and buyers are now moving carefully.

Well-priced properties, especially waterfront homes and fully renovated historic houses, continue to attract buyers and close quickly. Overpriced listings, however, are sitting for weeks or months until sellers reduce their asking prices. “If you don’t want your house to sit, you have to price it right,” says Ellen Gvili, global real estate advisor with Ocean Sotheby’s International Realty, who has worked in the Keys market for over two decades.

Price reductions of 4% to 8% are now common, and some properties see cuts of 10% when initially listed too high. The “testing the market” strategy with an inflated price is no longer effective.

What Sparked the Slowdown

Three main factors have changed the pace of the Keys market.

First, mortgage rates have increased and remain elevated. At around 6%, borrowing costs are much higher than the sub-3% rates seen during the pandemic boom. This has priced out some buyers and made others more cautious.

Second, the rush of remote workers has slowed. During COVID, people seeking a more open lifestyle flocked to Key West. That wave has since receded, and buyer urgency has faded with it.

Third, inventory is growing. More sellers are listing their homes as winter begins, creating more options for buyers and intensifying competition among sellers. “Inventory goes up when sellers decide to put homes on the market during high season,” Gvili says. “Buyer demand is higher, but so is competition among sellers.”

Who’s Closing Deals, Who’s Waiting

The market’s slowdown is not uniform—it varies by price, location, and property condition.

Homes priced under $2 million and in move-in-ready condition, especially waterfront or renovated historic properties, still attract strong interest. Buyers in this segment want homes with updated kitchens, hurricane-rated windows, and no major projects.

For homes priced above $2.5 million, the pace slows noticeably. Luxury buyers, many of whom pay cash, are moving cautiously, negotiating more aggressively, and expecting sellers to justify their prices. Listings that are not competitively priced or need substantial work are taking the longest to sell.

Location remains critical. Properties in Old Town Key West, with walkable access to restaurants and culture, sell faster than those on busy streets or farther from central attractions. Homes requiring significant permitting or renovation face buyer hesitation unless the price clearly reflects the work involved.

“Sellers who expected bidding wars are now offering to cover closing costs just to get a deal done,” Gvili says.

How Buyers and Sellers Should Respond

Buyers in today’s Key West market have more leverage than at any time in recent years. Take time to tour properties, negotiate firmly, and request concessions such as closing-cost credits, repair allowances, or mortgage-rate buydowns. Sellers are increasingly open to these incentives to secure a sale.

Focus on realistically priced homes from the outset. Overpriced listings often see reductions after sitting for weeks, but waiting for those drops can mean missed opportunities. Properties on the market for 20 to 30 days with no price reductions often indicate a motivated seller ready to negotiate.

For sellers, pricing accurately from day one is essential. The market has shifted, and buyers are aware of their stronger position. Overpricing often leads to extended days on market and subsequent price reductions, which can make a listing appear stale. Work with an agent who understands recent comparable sales and can position your property to compete.

Consider offering incentives upfront—such as covering some closing costs, providing a home warranty, or offering credits for minor repairs. These gestures can help your listing stand out in a market with more choices.

If your home is not turnkey, adjust your expectations. Today’s buyers want move-in-ready properties or a price that reflects the cost and hassle of necessary improvements.

The Bottom Line

Key West’s luxury market is not collapsing, but it is adjusting to new realities. Sellers who price accurately and offer clear value continue to close deals, while buyers now have time and leverage to negotiate and make careful choices. The era of automatic bidding wars has ended, replaced by a market where realistic expectations and strategic decisions matter.

“You have to adjust to where the market is now, not where it was two years ago,” Gvili says. For both buyers and sellers, staying realistic, acting strategically, and working with a knowledgeable local agent are key to success.

This article offers insights into the Key West luxury real estate market and does not constitute legal, financial, or investment advice. Market conditions vary, and readers should consult qualified professionals for guidance on their specific situations.