Single-family home prices in Key Biscayne, the island village located to the east of Miami, are higher than they were in 2006, before the market crash.
The village of Key Biscayne encompasses 1.25 square miles with less than 13,000 residents -- connected to the mainland about seven miles away by a causeway and bridges -- and it is leaving the market collapse as a distant memory.
The median sales price for single-family homes in 2013 was 4.2 percent higher than in 2006. Since the bottom of the market in 2010, prices have increased by an impressive 36.5 percent.
The median single-family home price in the village was $768 per square foot in 2013, according to a report from Condo Vultures, with data from Southeast Florida MLXchange.
By comparison, the median sales price in 2006 was $736 per square. Prices bottomed out when they dropped 53 percent to $488 per square foot in 2010.
"There's this new found thought that real estate is a good investment once again, that the bottom is well past and we seem to be in the growth phase of the next cycle," Peter Zalewski, Principal Condo Vultures, LLC, told WPC News.
In Key Biscayne's condo and townhouse market, the median selling price was $511 per square foot in 2013, jumping 25 percent from $385 per square foot recorded during the market's low in 2010. As of January 28, almost three dozen condos and townhouses are under contract as of this week with a median price of $605 per square foot.
The market's robust recovery is driven in large part by its primary users, which are coming from outside the U.S., with a large percentage from Latin America.
"Many buyers on Key Biscayne come from South and Central America and Mexico," Paola Padovan, broker-associate at Padovan Realty Corp. told WPC News. "People, particularly international buyers, feel a level of safety that they simply cannot find in their home countries."
Of the approximate 12,800 people living in Key Biscayne, 47 percent are foreign born, with 76 percent speaking something other than English as their main language. In comparison, approximately 19 percent of Florida residents are foreign born.
"The majority [of buyers] are from Venezuela because of the political situation, Mexico because of the crime situation and Brazil because they're doing very well economically right now," Ms. Padovan said.
As in other markets, the foreign influence tends to mean higher prices, creating an immediate obstacle for Key Biscayne.
"Sellers who for the longest time were getting beat up are feeling extremely optimistic," Mr. Zalewski said. "[Buyers] are bullish and are getting ahead of themselves in terms of pricing."
In 2013, 67 single-family homes were sold, increasing 43.3 percent from 2008. However, sales dropped 14 percent from the previous year. Currently there are 69 homes on the market with a high asking price of $964 per square foot. But only 13 homes are under contract with the lower $741 per square foot price tag.
The same scenario is seen in the condo and townhouse market, where homes sales in 2013 were 38 percent higher than in 2008, but dropped 15 percent from 2012. There are 132 units currently on the market for $710 per square foot. Only 34 are under contract with a median price of $605 per square foot.
Going forward, the market also has to deal with a lack of land to continue building. Most of the construction happening is in the single-family market.
Currently, there are only two condo projects under construction in Key Biscayne. The uber-luxe 15-story, 142-unit Oceana Key Biscayne is expected to be delivered in July of 2014. Condo prices started at $1.5 million and range to more than $19 million for the 7,894-square foot penthouse that also has an additional 10,000 square feet of rooftop terrace space and balcony areas. The project also has 12 adjacent villas for sale priced from $6 million.
Another project, 101 Key Biscayne, is slated for completion this December. The much smaller project will be five stories tall with 11 units with prices ranging from $1.740 million to $2.290 million, according to the project's website.
"It's turning into a very exclusive place to be and it happens to be on an island that is connected by one bridge," Mr. Zalewski said.