Florida Keys housing market shifts toward cash buyers

A significant divide has emerged in the Florida Keys housing market between cash buyers and those dependent on mortgages. High interest rates and rising costs are increasingly pricing out traditional buyers, such as younger families seeking weekend or summer homes.

Real estate professionals note that mortgage payments for waterfront properties have nearly doubled, rising from approximately $3,500 to between $6,500 and $7,000. This shift has replaced former buyers with a demographic of retirees, business owners, and affluent individuals from the Midwest and Mid-Atlantic states who possess the purchasing power to bypass financing needs.

Insurance costs also play a critical role in this market shift. Citizens, Florida’s insurer of last resort, does not provide policies for homes with replacement costs exceeding $1 million. This forces mortgage-dependent buyers into expensive private insurance markets, whereas some high-end cash buyers opt to self-insure.