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Saturday, March 1, 2008

Season's Beatings!





Season's Beatings! may be a little extreme for a title, but it may help entice you to read about how the Key West real estate market fared so far this Season. Season is 2/3 over. Two months down and one to go. Then the buyers go back up north to live in the smoke and smog until next year. Sure we will continue to have lots of people who come to Key West after Easter (March 23 this year). But those visitors are usually cheap Floridians and or economical European tourists who come to enjoy the great Key West weather at discounted prices. The people who come after Season are usually not looking to buy but instead are looking for vacation deals. That means there are just 23 days left to determine how big a beating our real estate market endured.

Below you will find the Key West single family and condo sales results for the month of February for the years 2005, 2006, 2007, and 2008.

In 2005 (the year the bubble burst) there were 26 single family homes sales in Key West totaling $31,613,934. The least expensive was $545,000 that sold in 5 days. The median was $970,000, and the largest was a 6 bedroom home that sold for $4,300,000.

Condo sales for 2005 were thus: 27 sales totaling $18,176,750. The least expensive unit sold for $400,000, the median was $575,000, and the big boy condo went for $2,225,000.

There were 17 single family home sales in 2006 totaling $17,630,200. The cheapest was $450,00 and the most expensive was $$3,775,000 that originally listed at $4.2 million.

There were 12 condo sales during this period with the least expensive going for $295,000. The median sale was $602,500 and the most expensive was $2,000,000.


In 2007 there were 20 single family sales totaling $22,514,349. The least expensive was a single family that sold for $420,000, the median was priced at $1,125,717 and the most expensive sold for $5,800,000. There were only 7 condo sales during this period. The lest expensive was $245,000, median was $365,000 and the most expensive was a disappointing $830,000.

I can say that there were 8 single family homes totaling $7,817,000 since February 1, 2008. The least expensive house sold for $ There were two good upper end sales as well: one for $2 million and the other for $3 million. The median priced home sale was $541,500.

And February 2008 brought 8 condos sold. The least expensive unit sold for $235,000, the median sold for $402,000, and the most expensive sold at $1,649,000. (That was a resale at the Hyatt Beach Club.)

There has been a flurry of contracting activity during the past 29 days. There are currently 59 properties that are contingent (awaiting inspection, appraisal, survey, loan approval, etc.) and 27 that are shown as pending (contingencies have been cleared and property is prepared to close). All of the Realtors I have talked to are busy and are now writing contracts. And some are being accepted. The less expensive properties are outselling the more expensive, but some expensive properties are selling as well.

There are a couple of Old School Realtors that finally got the message that the market of 2005 is history. They have finally started to reduce the asking prices on properties that were very overpriced. Most of the sales that have occurred are a result price reduction. There is still a hesitance by many buyers who think the market will fall further, especially after Season ends. I agree. But bargain hunters may miss getting the plum properties just to save money. Homes in Key West are not like fungible goods. They are unique. So the smart buyers are buy location and value at a good price. Some people may make good money buying what is leftover at the end of the day. But leftovers are just that. You get what you get.

Look for more price reductions during the next couple of weeks as some sellers try to entice reluctant buyers to act now. Sellers who do not need to sell may not respond to low-ball offers. I wouldn't. Why tell some would-be moron buyer your bottom line if he is not willing to tell you what he really is willing to pay? But sellers who need to sell or who must sell must expect the worst. When the buyers leave, the party is over till next year. Want to buy? Call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

2 comments:

Anonymous said...

Gary,

Your blog entries are always very thoughtful, tons of information and lots of insight on KW. But why do you mar them every now and then with abrasive sarcasm (e.g., "cheap Floridians" ... "would-be moron buyer"). Some Florida families may not have been blessed by your vast fortune; some buyers may wish to offer low bids. Why insult these people?

Bill

Gary Thomas said...

Bill, I'm not trying to insult anyone. I'm hoping to get some business.

I used to own a guest house in Key West. The Floridians and the Europeans who come to Key West in the summer do not come to buy real estate. They come to enjoy all that the island has to offer at half the season price. That business experience transfers directly to real estate sales because sales always "dry up" during the summer.

If I insulted some morons, so be it. They insult sellers and agents when they make insulting and ridiculous offers. I used to manage the workout dept at a big bank. We would not respond to moronic offers. We would counter serious offers that were made in good faith. And I worked like heck to make deals get done--not just on price but on other issues.

I think of price negotiation as being a very important part of buying and selling process. I am encouraging potential buyers to take advantage of the misery of others. But that does not mean we have to beat the downtrodden seller over the head and then rub salt on the wound.

I closed a deal last week where my customer bought a beautifully renovated home with a pool that tastefully furnished for $649,000 cash. We closed 10 days after we made the offer. The seller took a $550,000 hit. There was no acrimony or bad feelings. He had to sell and we were prepared to act. Both sides got what they wanted.

I stand by what I wrote.

Gary

Disclaimer

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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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.