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Thursday, August 2, 2007

The Key West Antiques Road Show



Do you regularly watch Antiques Roadshow on PBS? I do. It's a great diversion from the mindless dribble that has become so much of broadcast television. It is great fun watching regular people who discover that some item they bought at a thrift store or estate sale is worth a gazillion dollars. I think we all enjoy that and wish that it could happen to us.

Almost every appraiser ends up his or her discussion of the item with a statement of its' value--as if that value is the end-all of the discussion. Depending on the value we then get to see its' owner puff-up like a peacock or feign thanks to the appraiser. But the show troubles me just a bit because the focus seems to be on dollar value of the item rather on its' intrinsic worth.

Maybe Antiques Roadshow is just a reflection of our society's obsession with how much something costs. Magazines such as Architectural Digest have regular features comparing similarly priced homes in different geographic regions. Key West Magazine and The Key West Citizen newspaper regularly have similar features. I have even done such comparisons in this blog. But I think those comparisons miss the point. Price is not the same as value.

I am remodeling my house. And I have learned a valuable lesson about what things cost--or the price of everything. Here are a couple of examples. I used to think of nails and screws as being almost free because you need so many of them to build a house. Wrong. Go to Ace Hardware and checkout the prices. We have metal roofs in Key West, and they are attached to the house by specific metal screws. And those screws cost $.26 each. Electric wire is priced by the foot and most new wiring and most re-wiring require three strands of wire (or one strand of Romex)to run each course. Windows and doors, marble and granite, glass tiles and mosaics, bath and light fixtures and kitchen cabinets come in varying quality and price ranges. Once you finish the inside you get to start on the garden and pool. And you start the spending process all over again. Palms and pools are priced by the foot, so the bigger (or more rare) the palm or the larger (or more opulent)the pool/deck;, the higher the cost. And if you are fortunate enough to live in Key West you get to pay more for every item just because of it. But that is not the point.

I have written before about what I call "staple gun remodeling" referring to cheap redo a house in order to sell it for a quick profit. There are numerous examples of homes and condo conversions where attractive but relatively inexpensive kitchens and baths are installed along with a fresh coat of paint and maybe even new windows and doors. The property looks good, but most of the improvements were done just to surface areas and not to the building itself. You get the point.

Since we have so little actual new construction in Key West, most resale homes are remodels. And it is always nice to see a real quality renovation that uses quality materials and has quality workmanship. Then when you add those qualities to mature landscaping and a great location you get to see the real value of the property.

It is really frustrating right now. I have several people I am working with that are in the market to buy a second home or a business. Each person (or couple) focus their attention on price above all. They want the best price. I get it. I do the same thing. But my recent experience in redoing my house gives me a better appreciation for the real value of some of Key West's homes. There are some real bargains available right now. The real estate market is always slow in the summer, but this summer is a killer. Some businesses have closed. There are more foreclosures than ever before. And there is the omnipresent fear of another hurricane and the dread of what could happen. Prices are down about 33% pretty much across the board from what they were two years ago. But buyers are not buying.

I think it was back in 1990 when there was talk that Citicorp which was then the first or second largest bank in the United States might fail. The stock went down to $8 per share. I reasoned that the U.S. government would not let that bank fail because the consequences for the U.S. economy would have been disastrous. So I bought Citicorp stock. It eventually went back up to over $160 per share. I knew the low price of the stock was not a true reflection of its value. Citicorp's assets were enormous. It was the market's perception of problems that had devalued the stock, but not the value of the underlying assets.

And I think that thought process is what is at play in Key West real estate right now. There are many, many high quality properties that are going unsold because prospective buyers are focusing on price rather than looking at the underlying value of these properties. Sure there is a bunch of crap in the market. A good Realtor can help a buyer avoid that--or buy it for next to nothing if you are so inclined. But the smart buyer may be the one who, like me when I bought Citicorp, sees an asset that has been beaten down.

Give me a call if you are interested in looking for a bargain in the Key West real estate market. 305-766-2642 or email me at garyethomas@aol.com. Thanks.

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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.