Thursday, January 10, 2008
Do you ever watch any of the reality tv shows that compare home prices in various cities? Several networks have similarly themed shows, but they all basically just demonstrate the familiar, but true, adage about Location, Location, Location as the determinative factor in real estate valuation.
I watched one the programs the other day and the house hunters were looking for a place near New York City for $1,000,000 and I was surprised to see how little, but also how much you could buy for that price if you were willing to shift location for some other factor. I knew that already, and I tell that to clients all the time. But it was nice to see it demonstrated so neatly on TV.
So I thought I'd do my own comparison. My criteria: single family home that sold and closed between 1/1/07 and 1/10/08 any where on the Island of Key West with a final sale price between $980,000 to $1,001,000. There were seven such sales and you can see each individual property in more detail by CLICKING HERE. But note that most of the houses originally were priced significantly higher than the actual sales price. And if you are familiar with Key West you will see why houses that sold for the same price, but in different neighborhoods, looks so disparate.
The Biggest Loser (or Winner depending on how you look at things in life) is the property at 912 Truman. It was originally priced at $1,995,000 but only sold For $1,000,000. But read about it and look at the pictures. I think the buyer opted to purchase a grand Key West home in an inferior location and in exchange got a significantly high value for his money. It sold at $286 per sq ft.
The house at 314 Margaret is in Old Town, but the block is situated in a mix of residential and commercial. It is near the seaport, but with that comes lots of foot traffic and parking difficulties for full time residents. Yet the house sold in only 27 days at 90% of the asking price because it had a valuable transient license. In my opinion is the existence of that license that caused this especially disparate house buy a good deal to its new owner. It sold at $865 per sq ft.
And then there is the mystery house at 520 Angela. It was redone last year along with a cottage at the rear. (That usually means illegal apartment or phantom rental unit.) It sits about 300 feet east of Duval and across the street from the Key West City Hall. The ultra chic Gardens Hotel sits on the east end of the block. So the house would be a duck out of water if it were intended to be used as a residence. The house was listed at $1,495,000 and sold for $1,000,000. The house is small and sold at $1163 per sq ft.
There are many factors that effect the perceived value of property, and location has to be near the top. Referring back to the TV programs I recall having seen mini-mansions priced at $1,000,000, but they were located in places most people want to leave. Like Tennessee. Key West is a place people move to because of the lifestyle it affords and the weather. It isn't referred to as "Paradise" by accident. So if you are a buyer up north in America and are looking to buy way down here on this tiny little island keep in mind that there are a lot of people just like you with money in their pocket who also want to get a place here.
I think it is possible to get a good deal in Key West in this current market. As a buyer you need to be cognizant of the many factors that affect price and work with a good realtor who knows our local market. Be willing to negotiate with yourself to find a house that fits your needs and your budget. And finally, be realistic. Sellers may want to sell their houses, but few want to give them away.
There are lots of homes in all prices ranges available in Key West. CLICK HERE to checkout all Key West mls listings in real time. Then call me, Gary Thomas, 305-766-2642 or e-mail me at firstname.lastname@example.org.
The information on this site is for discussion purposes only. Under no circumstances does this information constitute a recommendation to buy or sell securities, assets, real estate, or otherwise. Information has not been verified, is not guaranteed, and is subject to change.
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Gary Thomas in a Nutshell
- Gary Thomas
- 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.