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Wednesday, February 13, 2008

Present Value

Yesterday I wrote about a house at 724 Ashe Street in Key West that I think is a very good value for today's real estate market. It is priced at $999,000. To many price would see very high. But in the context of the specific milieu of Old Town Key West of similarly priced homes, I think the value of 724 Ashe is very apparent. To help prove this point I did a search of the Key West mls database and came up with similarly priced homes in the same area. CLICK HERE to review the list of homes in the same price range. You will see a great disparity in both the price per square foot, location, and quality of features offered.

By the way the photos are of four of the houses contained in the CLICK HERE link. You can tell without even clicking the link that there is a disparity of quality and size. I'm not disparaging any property but simply commenting on the obvious.

I have written before about the fact that Key West locals know the price of just about every house down here. (I'm talking about what an owner paid for it and what it is worth today.) But price and value are not the same thing. "Cheap" rarely equates to quality. And "high price" does not insure high quality. Key West is unique in that many of our old homes are totally dissimilar--especially in Old Town. So it is really necessary to consider price per sq ft, location, features, etc. to determine the present value of a house in Key West. Buyers do that exercise anywhere. But here the dissimilarity of houses makes the valuation process more difficult.

There are six houses in the $950,000 to $999,000 price range CLICK HERE located in Old Town that vary between 1150 to 2300 square feet and that are priced between $420 to $864 per square foot. The individual houses vary as to year of construction and quality of construction (or renovation). In fact one is listed as a possible tear down. So it is really necessary to do your homework when looking at a property in the current market. I hate to be so blunt but sometimes it is necessary to take advantage of a seller's financial woes when making an offer on property. A smart buyer needs to craft a strong offer in order to take advantage of buying opportunities in a troubled real estate market. Strong offers are usually all cash, limited contingencies such as inspection and appraisal, offering to pay for the title policy, and quick closing. Don't lose your common sense when agreeing to a price and terms. If the house won't appraise at the "sales price" don't buy it. Sometimes appraisers find flaws with a property that cannot be reconciled with the agreed price.

If you are looking for a home in Key West CLICK HERE to perform your own search of the Key West mls database. Don't just look at price because that is but one element that helps determine the present value of real estate. I happen to believe the current market is very depressed (and it may go down further). But there are individual bargains out there just waiting for a smart buyer to purchase. And I really believe that the present value in those properties will increase as we make our way out of the present turmoil.

If you see something you like please call me, Gary Thomas, 305-766-2642 or e-mail me at for more information. You may find something you just can't live without.

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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.