33042
Key West, Florida

The 33042 ZIP code in Key West posted a median sale price of $1,051,000 as of February 2026, reflecting a 9.8% year-over-year increase that outpaces national averages but signals measured appreciation rather than explosive growth. Properties are averaging 179 days on market, triple the pre-pandemic velocity in this area and indicating significant buyer hesitation at seven-figure price points. With only 2% of homes selling above list price, negotiating leverage has clearly shifted from the seller-dominated conditions of recent years.

This environment favors patient buyers with cash reserves who can wait out extended negotiation periods and avoid bidding wars that characterized tighter inventory cycles. Sellers with flexible timelines can still capture appreciation, but those requiring quick liquidity face a six-month average marketing period. Investors seeking rental income should scrutinize cap rates carefully given the high basis cost of $1,051,000 and extended holding periods before sale, as the 179-day DOM suggests limited exit liquidity for repositioning plays.

The PropIQ score of 51 sits precisely at the caution threshold, indicating neither compelling value nor overheated risk but rather a market in equilibrium that could tip either direction. The combination of sub-10% appreciation and nearly six-month absorption rates suggests price growth may decelerate if days-on-market extends further or inventory accumulates through spring selling season. Monitoring weekly inventory levels and any movement in the 2% above-ask metric will provide early signals of directional momentum.