For many people, moving to Key West would be a dream come true. However, if you don’t live nearby, you may worry about whether the area is affordable. After all, living in a beach town typically comes with a price tag. If you’re trying to figure out if Key West is affordable for you, here’s a look at the cost of living in Key West.
The Cost of Living in Key West
Generally speaking, the cost of living in Key West is high. It’s a small beach community and a highly desirable area. Plus, as an island and based on its location off the southern tip of Florida, transporting goods into the region can be expensive, leading to higher prices when shopping.
As a result, prices for nearly everything are above the national average. Here’s a closer look at the cost of living in Key West broken down into categories.
When it comes to housing, you typically have to choose between buying and renting. Purchasing a home in Key West is quite costly. As of October 2022, the median sale price of a property came in at $917,500, which could make buying a budget-buster for many.
If you’re interested in renting, that also comes with a big price tag. A one-bedroom apartment typically runs $2,413 per month, while a two-bedroom can cost $4,400 per month.
When it comes to homeowner’s or renter’s insurance, you may see higher rates. This is particularly true since adding hurricane coverage is often viewed as a necessity.
When it comes to food, the overall cost in Key West is approximately 5 percent above the national average. That puts it in line with cities like Miami, though it may not be high enough to completely derail your budget.
Transportation costs about 10.7 percent more in Key West. In some cases, this is because it’s a smaller island, so there’s limited access to options, which can reduce competition. Additionally, bringing new vehicles to the area potentially costs more due to the location, and those expenses can be passed on to the buyer.
Gas prices are also higher in Key West than in many other parts of Florida. Due to the island’s location, you may also see higher auto insurance rates, depending on where you’re coming from, and you might need to add specialized coverage for hurricanes and similar natural events.
In Key West, the cost of healthcare is about 13.2 percent above the national average. Again, this is partially based on limited access, as fewer medical facilities can lead to higher costs.
In Florida, there is a base statewide sales tax set at 6 percent. However, cities and counties can add to that, pushing this cost up. For Key West, that leads to a sales tax of 7.5 percent on most purchases.
For property taxes, a recently passed increase would set the tax rate at $2.14 per $1,000 of assessed home value. However, that may not take into account certain deductions or exclusions, so keep that in mind.
While the utility rates themselves aren’t necessarily bad, your utility spending may go up if you move to Key West. The area frequently experiences high temperatures, and the costs of cooling can add up quickly. While the difference is less dramatic if your home is well-insulated and has a modern, efficient HVAC system, it can still be quite spendy when compared to other regions.
Does the cost of living in Key West surprise you, or do you think it makes sense based on the location? Do you consider the cost of living when choosing where to live or retire, or is it not a major concern? Share your thoughts in the comments below.
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Tamila McDonald has worked as a Financial Advisor for the military for past 13 years. She has taught Personal Financial classes on every subject from credit, to life insurance, as well as all other aspects of financial management. Mrs. McDonald is an AFCPE Accredited Financial Counselor and has helped her clients to meet their short-term and long-term financial goals.