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Sunday, July 1, 2007

Second Quarter Sale Report for Key West Real Estate

The second quarter of 2007 is over. How did the real estate market do in Key West this year as compared to 2005 and 2006?

I did a quick search of SOLD homes, condos, duplexes, and 3-4 units from Key West through Shark Key priced over $200,000 from March 1st thru June 30, 2007. There were a total of 109 such sales. The least expensive sale was a one bedroom condo listed and sold for $250,000. The average sale was a 3-bedroom home with 1457 sq ft listed for $920,702 and that sold for $845,707. The most expensive sale was a home listed for $4.675million that sold for $4.34 million.

In 2005 there were 189 sales during the same time period. The least expensive condo sold for $200,000. The average sale was a 3 bedroom, 1325 sq ft listed at $1,002,561 and sold for $954,714. The most expensive home was an Old Town home on Sunset Key that was listed for $7.4 million and sold for $6.950 million with only 105 days on the market

The year 2006 had a total of 124 sales during this period. The least expensive was a 215 square foot condo that sold for a whopping $240,000 ($1116 per sq ft). The average sale was a three bedroom 1,525 sq ft home listed at $1,146,748 and sold at $1,038,578. The most expensive sale was a 5,000sq ft home listed at $5,900,000 that sold at $5,500,000 (on the market 440 days).

What do the numbers show? Well, I am no statistician but is easy to see that the overall sales are down and the overall sales prices are down across the board from low end to high end sales as compared to both 2005 and 2006 sales.

I have also noticed something very bothersome. There have been a very large number of properties that were put under contract (both seller and buyer agreed to all contract terms) during the past quarter but that later went back on the market. There are usually four things that cause a property to fall out of contract: buyer remorse, poor homeowner inspection report, insufficient credit, or property failed to appraise for the contract price. My suspicion is that properties have devalued and are not appraising at the contract price. If the seller will not lower the price, the property goes unsold.

The hardest part of the market to sell is the mid-range priced home. If you go back through Key West real estate sales to 1997 you will see that the mid range priced home has always been the most difficult priced property to sell. Back then the affordable fixer-uppers in Old Town sold around $250-280K. Homes over a million sold quite easily. But the majority of homes in the $500-800K range languished. Those homes are now just priced a lot higher. And I think the pessimism or skepticism about the lack of sales is failing to recognize this fact. Doom sayers are comparing the "boom market" sales of 2003 thru 2005 to today, and they are seeing doom and gloom.

The next three months are traditionally the worst. Town is hot, locals go away, not much sells. The hurricanes of 2005 and the market downturn have put a chilling effect on a traditionally down market. We shall see what happens this year.

My suggestion: if you are a seller and don’t need to sell now: Don’t list your property. If you must sell now, price it correctly. If you are a buyer, now is the time to buy. The market may not have totally bottomed, but good properties will get purchased before the dregs. Get the right property at a price you feel comfortable with.

If you are thinking about buying, please CLICK HERE to preview all current Key West mls listings. Then call me at 305-766-2642 to help you find your deal. And there are some good deals out there.


Anonymous said...

Hi Gary,
Very interesting numbers. One question: you say that "sales prices are down across the board from low end to high end..." But the low end, from the numbers you cite, seems in fact to be rising quite a bit from the second quarter 2005 to 2007: $200,000 in 05-II to $240,000 in 06-II and $250,000 in 07-II. Perhaps if you broke out the bottom quartile and did the averages for these three time periods it might show that the low end is in fact declining, with just these very bottom outliers rising.
Thanks for the info!

Gary Thomas said...

Thanks for pointing out my error.


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Gary Thomas in a Nutshell

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Key West, Florida, United States
I first read about Key West in a magazine called "After Dark" sometime in the mid 1970's. But it wasn't until March 1984 that I made my first visit to the island that would become my home. I had two weeks for a vacation and reserved a room at Colours Guesthouse (now Marrero's Guest House) for one week. I thought that if I didn't like Key West, I could always go back to Miami or Ft. Lauderdale for the rest of my trip. But after a couple of days in Key West, that was no longer a consideration. But when I wanted to extend my stay for the extra week I found there was no room at the inn. The guesthouse owner did find me a room at LaTeDa, the infamous guesthouse/restaurant. That's a story I'll write another day. But those two weeks in Key West gave me the realization that I had found Paradise. Key West has been my home since 1993 and my only regret is that it took me so long to get here. I am a full time Realtor at Preferred Properties CRI. Let me help you find your new home or business in Paradise. Living in Paradise is not a slogan, it's a way of life.