Thursday, June 26, 2008
The good news is that there are only 14 active Bank Owned condos and town homes for sale in Key West. The bad news is that there are undoubtedly many more on the way. As of June 27, 2008 the Key West mls shows a total of 345 active condo and town home listings for Key West and Stock Island. I just went through the active listings one at a time (our mls programmer can't figure out how to search for short sale or bank owned properties as being different from non-distress listings). Most of the active listings are short sales followed by properties that are Realtor owned.
Here is an example of what I see that is bringing down the price of many condos and town homes. Unit "A" is a 2 bed 1 bath town home constructed in 1995 in a Planned Unit Development with all the frills. It was resold in January 2001 for $199,900. The post housing bubble occurred and property prices and property values rose through out Key West until the end of 2005 when the decline started. The same Unit "A" sold for 101.20% of its asking price ($415,000) in the year 2004 at $420,000. It was listed for sale in August 2007 at $335,000 and it was offered as a short sale. Unit "A" sold and closed on March 28,2008 for $275,000. In three years the property declined in value from $420,000 to $275,000 or about 35%. Many of the Units in the same development sold in 2005 at over $500,000. What happened to Unit "A" is a typical example of what happened across Key West. It is not the exception.
People who bought properties in the period between 2001 through 2005 paid market prices. Many obtained close to 100% financing. And for those that didn't get 100% financing, many financed their property acquisitions for less than a 20% down payment. The market declined and values fell. This decline created a disincentive to continue making mortgage payments on a property whose loan amount is higher than its value. So homeowners started walking away. In droves.
That is how I explain why the majority of condo and town homes being offered are short sales. I am betting that many of the short sales that do not get sold will become bank foreclosures.
Look at it a different way. Let's say you bought a town home in 2005 for $550,000. Your next door neighbor just sold the same size unit in the same condition as yours for $290,000. You were fortunate enough to have had $55,000 down payment so you only had to borrow $495,000. But now your home is only worth $290,000. What would you do? Think real hard for all of 10 seconds. That is why so many condo and town home owners are selling. There is no upside. At least in the short term. When the market stabilizes the people who buy right now will be looked upon as having been shrewd. That is unless the market goes down even more.
Don't buy somebody's problem. Buy an opportunity. Don't buy cheap because it is cheap. Buy good because the price is good. There is a difference. If you are looking to take advantage of the buying opportunities available in Key West please call me, Gary Thomas, 305-766-2642 or e-mail me at email@example.com. I'd be pleased to work with you.
The photos to the right were taken in Key West during the height of the Great Depression. Key West survived it and thrived. We will get over what is going on. There will always be a Key West. These prices won't last forever.
CLICK HERE to checkout the 14 Bank Owned Condos available for purchase in Key West.
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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.