Published October 2, 2026 in Market Update

Key West and the Lower Keys are moving more homes with less inventory

By Jimmy Lane

Real estate, Primary market

More homes sold. Fewer were available to buy. That combination shapes every pricing decision a seller makes right now. The Real Estate Data Aggregator counted 231 homes sold across Key West and the Florida Keys in the three months ending July 31, 2026, up 13.8% from the same period a year before. At the same time, homes for sale across the market fell 7.3%, to 468 total. Buyers are working through a smaller pool than the listing count first suggests.

Pending sales tell a similar story. The Real Estate Data Aggregator counted 235 pending sales across the market, up 16.3% from a year before. That forward motion suggests the pace of closings is not slowing. New listings, however, were nearly flat, up just 0.4% to 237. Supply is not keeping up with demand at the pace buyers are moving.

Key West (ZIP 33040): prices up, but homes are taking longer

The Real Estate Data Aggregator counted 134 homes sold in ZIP 33040 in the three months ending July 31, 2026, up 15.5% from a year before. The median sale price reached $1,100,000, up 12.8%. Those are strong headline numbers. The detail that sellers need to hold alongside them: the median home sat on the market for 152 days, which is 35 days longer than the same period last year. Pricing aligned with what buyers are actually paying matters more than it did a year ago.

Homes for sale in ZIP 33040 fell 9.4% to 280. Months of supply dropped 1.8 months to 6.4. The average home sold at 95.5% of its list price, up 1 point from a year before. Only 3% of homes sold above list price, though that share edged up 0.4 points. Pending sales rose 17.3% to 129, a sign that buyers are committing. The share of homes going under contract within two weeks of listing, however, fell 6.7 points to 12.4%. Well-priced homes can move. Overpriced ones are waiting longer.

Lower Keys (ZIP 33042): the sale-to-list ratio made the biggest gain

ZIP 33042, which covers Stock Island and the Lower Keys communities down the Keys toward Big Pine, recorded 64 sales in the three months ending July 31, 2026, according to the Real Estate Data Aggregator. That is up 12.3% from a year before. The median sale price held at $1,100,000, up 2.3%. The sale-to-list ratio rose 2.8 points to 95.2%, the largest gain of any ZIP code in the market. Sellers who priced correctly captured more of their ask.

Inventory in ZIP 33042 moved in the opposite direction from the broader market. Homes for sale rose 6.5% to 114. New listings jumped 27.8% to 69. Despite that added supply, pending sales climbed 20.3% to 71, and 15.5% of homes went under contract within two weeks of listing, up 3.6 points. That is the strongest quick-contract rate of the three ZIP codes. Months of supply edged down 0.3 months to 5.5. Buyers are absorbing new supply as it arrives.

Big Pine area (ZIP 33043): the sharpest inventory drop and the strongest price gain

ZIP 33043, which covers the Big Pine Key area up the Keys, recorded 33 sales in the three months ending July 31, 2026, up 10% from a year before, according to the Real Estate Data Aggregator. The median sale price rose 15% to $799,000, the largest percentage price gain of the three ZIP codes. Inventory fell sharply: homes for sale dropped 16.9% to 74, and new listings fell 23.4% to 36. Buyers here are working with fewer options than at any point in the past year.

The sale-to-list ratio in ZIP 33043 reached 96.1%, up 2.5 points, the highest of the three ZIP codes. No homes sold above list price in this period, down 3.3 points from a year before. Pending sales rose 6.1% to 35. The share of homes going under contract within two weeks fell 3.8 points to 11.4%. Months of supply dropped 2.2 months to 6.9, the largest supply reduction of the three ZIP codes. Homes are taking longer to close, but the ones that close are selling closer to list.

How the three ZIP codes compare

The rate environment adds its own weight

Freddie Mac put the 30-year fixed-rate mortgage at 7.28% as of October 1, 2026. The 15-year fixed averaged 6.60%. Rates crossed 7% in late September for the first time since January 2025, according to Realtor.com. That affects how buyers calculate their monthly cost, particularly on homes priced at or above the market median. The National Association of Realtors reported that existing-home sales fell 2.0% in August 2026 nationally, though sales were up 1.6% year-to-date through the first eight months of 2026. The national picture is mixed. The local picture, as the Real Estate Data Aggregator shows, is running ahead of it.

The National Association of Realtors also reported 4.9 months of supply nationally, the highest level in over ten years. Key West and the Florida Keys sit at 6.4 months in ZIP 33040, 5.5 months in ZIP 33042 and 6.9 months in ZIP 33043. Those figures are above the national level, yet all three fell year over year. The direction matters as much as the number.

The broader South Florida market offers useful context. CNBC reported 194 ultra-luxury home sales at $10 million or more in Miami-Dade County in the first eight months of 2026, and that 82% of Miami condo sales valued at $1 million or more were all-cash transactions in 2025. Cash-heavy buyers at the top of the market are a consistent presence in this region. That buyer profile is relevant here: a significant share of Key West and the Florida Keys transactions at and above the $1,100,000 median involve buyers who are not rate-sensitive in the same way a financed buyer is.

What sellers and buyers should hold onto

Sales volume is up across every ZIP code. Inventory is down across the market as a whole. Pending sales are rising faster than closed sales, which points toward continued activity in the months ahead. Those are the conditions that support firm pricing for sellers who align their ask with what comparable homes are actually closing for. The caveat is real: median days on market rose in every ZIP code, by 19 to 35 days depending on location. Homes that are priced ahead of the market are sitting longer.

For buyers, the inventory picture means the listing count overstates the practical choice. With 468 homes for sale across the market and 235 already under contract, the active pool is narrower than it first appears. Well-positioned homes in ZIP 33042 are going under contract fastest, with 15.5% finding a buyer within two weeks of listing.

These numbers describe each ZIP code as a whole. One street, one neighborhood pocket, one property type can read very differently from the broader figure. Old Town, Casa Marina, The Meadows, Stock Island and Key Haven each have their own supply and demand story inside these ZIP codes. If your home or the home you are considering sits in one of those pockets, the ZIP code number is a starting point, not the answer.