Monday, March 3, 2008
Remember wanting to get a "Do Over" as a kid? It had nothing to do with renovating a house. And it had absolutely nothing to do with the "do" or "sweep" some half-bald guy uses to disguise his very high forehead. But it had everything to do with achieving a better result because you knew you could do it better if you could just do it again. It was like instant replay, but with a different and this time winning outcome.
I've been selling real estate in Key West for 11 years and I've heard so many people tell me they wish they had bought a little house in Key West before the market took off and everything got so expensive that they got priced out of the market. If you are one of those people who wished you had bought but didn't, this is the chance for a "do over".
Most of the Key West real estate market has corrected itself downward about 35% from the highs of the year 2005. If you bought then you probably have lost equity in your property. People who purchased very high end properties in good Old Town locations lost the least or lost nothing at all. People who bought at the Key West Golf Club may have experienced up to a 50% decline in value.
What does the above paragraph tell us about the real estate market in Key West today? I think it says what it has said ever since I came here for the first time: good property in Old Town will continue to rise in value, and property that has locational issues or that needs repair will not rise in value at the same rate and may decline in value in some instances.
Does that mean a new buyer has to spend $2 million for a house to have a safe investment? No. But I do believe that a buyer should buy into a good location where the nearby properties have been redone. You limit your risk by buying wisely, not just by buying expensively.
There are many properties on the market right now that are cheap by recent Key West standards. But the old rule "location, location, location" still governs even when it comes to a down market. I recommend that you buy into a good location or buy at a very discounted price. Your upside in buying an inferior location may not be as great as if you were to buy a well located property, but you may still achieve parity by buying a bargain price. For example condos at Shipyard usually rent for about the same price per week, yet some units are being offered for sale at prices much higher than others simply because of their location or the extent and quality of any upgrades or perhaps have a tremendous repeat business. All things being equal I'd probably buy the cheapest unit. But if a more expensive unit had a tremendous rental history, I might elect to buy that one.
There are six units available at 1800 Atlantic that have transient rental licenses. They are priced between $669,000 to $1,698,000. They have their own locational issues within the complex and some are nicer than others. But I suspect they throw off just about the same amount of income. Again all things being equal I would look at buying the least expensive if all I was looking at is getting a good rental unit. But I would try to also buy a unit with a good rental history that is managed by a good rental company. A good price means nothing if you have a poor property management company. CLICK HERE for more info on the six units with transient licenses.
There are 21 single family homes available in Old Town priced under $700,000. CLICK HERE to see those properties. Some of those houses are still priced at ridiculous levels because of the cost of renovation. But a few of the houses may offer an upside if they are purchased at a fair price. An inferior Old Town location usually trumps a good location out in the boonies.
If you are considering buying a place in Key West there are still lots of places available in all price ranges. Give me, Gary Thomas, a call at 305-766-2642 or e-mail me at email@example.com. CLICK HERE to checkout all Key West mls properties currently available for purchase.
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.