Buying a Condo in Key West

Why Key West prices stay high with flat growth

Key West is a small island of about 25,720 people at the end of the Overseas Highway. The Florida Keys use a permit allocation system, called ROGO, that limits how many new residential units can be built each year. Combined with a fixed amount of land, that keeps supply tight.

The all-homes index is up 24.8% over five years but only 0.3% in the last year, with condos down 0.1% and houses up 0.4%. Prices have leveled off at a high base. For buyers, a flat year means more time to inspect and negotiate than a few years ago, without expecting large discounts.

What the budget gets you, by bedrooms

• 1 bedroom: about $605,940
• 2 bedrooms: about $838,599
• 3 bedrooms: about $1,238,154

A second bedroom adds about $232,700. Even the lower third of the Key West market reaches up to about $638,656, so there is no true budget segment on the island. Buyers who want a lower price usually look up the Keys. Zillow's typical values are about $667,304 on Stock Island, right next to Key West, and about $752,866 on Big Pine Key, while Marathon sits near $832,447.

Condos also cost noticeably less than houses here. The typical house is about $1,149,359, roughly $443,600 more than a typical condo. Key West has more detached houses than many Florida resort towns, 42.0% of units per Census data, so the condo market is the smaller segment.

Old buildings, low-rise construction and the reserve rules

The median year built for Key West housing is 1968, and only 17.0% of units sit in buildings of 10 or more units. Most condos are in low-rise complexes, converted older buildings and small associations of a few units. Florida's milestone inspection and Structural Integrity Reserve Study (SIRS) rules apply to condo buildings of three or more habitable stories, so many Key West condos are outside them.

Small associations without a required reserve study need extra scrutiny:

• Who manages the association, and are financial statements prepared each year?
• What is in the reserve account, and what major work has been done in the last ten years: roof, concrete, plumbing, electrical?
• Has the association levied special assessments, especially after past hurricanes?
• Is the building insured for wind and flood, and at what deductible?

A tiny association with one or two owners doing the bookkeeping can work fine, but you want the records in writing. Use the 7-day cancellation window after receiving the association documents to read all of it.

Flood, wind and the cost of insurance

Much of Key West sits only a few feet above sea level, and most of the island is mapped in FEMA flood zones. Hurricane Irma in 2017 made landfall in the Lower Keys and damaged a large number of homes. Flood and wind are the two largest ongoing risks for any owner here.

For a condo, the building's master policy covers the structure. Ask the association for its wind and flood coverage, the hurricane deductible (a percentage of insured value, applied once per calendar year) and how that deductible would be shared among owners. On your side, an HO-6 policy with loss assessment coverage protects you if the association passes part of a storm loss to the owners. Ground-floor units carry more flood exposure; check the elevation of the unit and the building's history of water intrusion.

Get insurance quotes during the inspection period. When the private market passes on an older Keys building, owners and associations end up with Citizens, Florida's state-backed insurer of last resort, so ask which carrier writes the master policy now.

Financing and closing costs on a Key West condo

Many small Key West associations struggle to meet conventional condo lending rules, because of their size, ownership mix or insurance. A building that is non-warrantable usually means a larger down payment and a portfolio loan, or a cash purchase. Ask your lender to review the condo questionnaire before you spend on inspections.

With 20% down on a $705,769 condo, the loan is about $564,615. Florida note stamps at $0.35 per $100 are about $1,976, and intangible tax at 0.2% is about $1,129. Deed stamps are normally a seller cost.

Second homes and the tax bill

Census data shows 14.8% of Key West housing units are seasonal homes, and the median age is 46.1. Many condo buyers here keep a primary home elsewhere. Without Florida permanent residency there is no homestead exemption, the assessment resets to market at purchase, and non-school assessments can rise up to 10% a year. If you do move here permanently, homestead takes up to $51,411 off the assessed value and limits increases to 3% or CPI. Amendment 3 on the November 3, 2026 ballot could affect both groups; the outcome is not known yet. Canadians should review the IRS substantial presence test and Form 8840 with a cross-border tax advisor. This isn't legal or tax advice.

Tell me your budget and how much of the year you plan to spend in the Keys, and I will put together a shortlist of buildings with the insurance details checked.