Key West Real Estate Market Update: October 2026

Krystal Sheehan

Oct 6

4 min read

The September numbers for Key West are in, and the headline is not a dramatic one, which is exactly why it matters. The typical home price is holding steady, the number of homes for sale has dropped sharply since spring, and homes priced right are selling in half the time they took a year ago. Here is what the data says, what it does not say, and what it means if you are thinking about buying or selling this season.

The Short Version

Prices are steady: the 2026 median sale price is $1,050,000, down 2.1% from last year.
Inventory is shrinking: 320 homes for sale today, down 28% from 447 at the March peak.
Homes are selling faster: 76 days on market on average in September, compared with 158 a year ago.
Sales are up: 4.1% more homes have sold so far this year than last.
It is a balanced market: 7.5 months of inventory overall, with 6 to 8 months in every price range.

Prices: Why You May See Two Very Different Headlines

If you have seen a headline saying Key West prices are up 10%, it is technically true, but it is the wrong number to focus on. The 2026 average sale price is up 10.4% to $1,532,932. The median, the price right in the middle of all sales, is down 2.1% to $1,050,000.

The difference comes from luxury sales. Homes priced at $2 million and up have sold 88 times this year, compared with 72 at this point last year, a 22% jump. A handful of big sales pulls the average up without changing what a typical home is worth. For most buyers and sellers, the median is the better guide, and it says values are essentially flat.

Inventory: Fewer Choices Than in the Spring

Key West had 447 homes for sale in March. Today there are 320, a 28% drop. New listings slowed too: 22.4% fewer homes came on the market in September than a year ago. Buyers still have real options, but the selection is noticeably thinner than it was six months ago, and that usually tightens further once season brings more buyers to the island.

Pricing: The Gap That Costs Sellers Money

This is the most useful number in the report for anyone thinking about selling. In September, buyers paid 94.3% of the final list price but only 91.0% of the original list price. That gap is what starting too high costs: homes that had to come down in price ended up selling for less than they likely would have with the right price from day one.

Sellers are adjusting. The median asking price on active listings is down 5.9% from a year ago, and homes are selling in 76 days on average compared with 158 last September. The homes that are priced where buyers are already writing offers are moving quickly.

Where Homes Are Selling, by Price Range

Key West is balanced from top to bottom, with 6 to 8 months of supply in every price range. A few details stand out:

$2 million and up: the busiest growth story, with sales up 22%, but also the most supply at 81 active listings and 8.3 months. Luxury buyers have the most room to negotiate.
Under $1 million: 141 homes for sale, with 6.4 to 7.2 months of supply in each range. Choices are there, but they are shrinking from the spring peak.

Key West vs. the Rest of the Keys

Key West's 7.5 months of inventory is a little tighter than the Keys overall at 8.2 months. Its 2026 median of $1,050,000 sits above the Keys-wide median of $970,000, which is no surprise for the island with Old Town, walkability, and the most rental and lifestyle demand in the chain.

Third Quarter Recap

From July through September, Key West closed 118 sales at a $1,272,126 average, compared with 157 sales at a $1,625,069 average from April through June. Summer is always the quieter stretch here, and the average moves a lot depending on how many high-end homes close in a given quarter, so I would not read a price trend into one season.

The Number I Am Watching

New contracts. Only 9 homes went under contract in September, compared with 35 a year ago, and 38 homes are currently active under contract. That looks like a big drop, but September is the heart of hurricane season, and numbers pulled on the first of the month can miss contracts that get entered a few days late. Pending sales fell across the whole Keys too. I am treating this as one to watch rather than a trend, and the October numbers will tell us more.

What October Is Bringing

Higher mortgage rates. Freddie Mac's 30-year fixed average jumped to 7.28% on October 1, up from 7.03% the week before. Financed buyers should refresh their pre-approval before shopping.
Flood insurance rules. Citizens now requires flood coverage on policies with a dwelling value of $400,000 or more, in any flood zone, and the requirement expands to nearly every Citizens policy with wind coverage on January 1, 2027. Budget for it from the start. More on insurance and flood in the Keys.
The end of storm season. Hurricane season runs through November 30. After that, buyer traffic typically picks up as snowbirds and seasonal buyers return to the island.

What This Means for You

If you are selling: price for the market we have, not the headline. The 91.0% versus 94.3% gap shows exactly what an overpriced start costs. With less competition from other listings than in the spring and season about to bring more buyers, a well-priced, well-presented home is in a strong position right now.

If you are buying: you have choices and room to negotiate, especially above $2 million. But inventory is already down 28% from spring, fewer new listings are coming on, and January brings more competition. Shopping this fall, ahead of season, gives you the best mix of selection and leverage.

Want to know what these numbers mean for your home, your street, or your price range? I would love to walk you through it. You can request a home valuation report. You can also reach me at krystal@kskeywest.com, through my contact page, or on Instagram at @krystalsheehan.realtor.

Krystal Sheehan · Brokered by eXp Realty · Licensed in Florida

Source: FlexMLS residential data for zip code 33040, pulled October 1, 2026, covering sales through September 30, 2026. Mortgage rate from Freddie Mac's Primary Mortgage Market Survey, October 1, 2026. This article is general information, not legal, tax, or financial advice.