Saturday, August 2, 2008
Some Realtors think we are at or near the bottom of the real estate market. I'm not so sure about that myself. I watch the new foreclosure filings every few days, and they are not stopping. Maybe there are not as many filings nor are they as fast as before. But there are still too many to think the foreclosure crisis is over in Key West.
Does that mean prices are going to go down more? I'm not so sure that will be the case across the broad market in Key West. Certain areas of town are just getting pummeled. Four examples include The Key West Golf Club, Solano Village, Las Salinas, and Salt Ponds.
New Town and Mid Town have 143 active single family listings. That is way too much inventory, and it probably means prices will come down even more.
The number of single family homes or condos in the Old Town area is scarce (only 89). The pickings are slim indeed. The prices on the few sales that have occurred have remained relatively stable. There are a few bank owned properties that have sold or that are under contract. I suspect that the sales of those properties may bring down the statistical averages for the Old Town segment of the market but not by much. I think the only properties for sale in Old Town right now are properties that need to be sold. One of the reasons that prices on Old Town homes got so high was their scarcity. That scarcity has not changed. The construction of new condos and town homes and the conversion of existing structures into condominiums in the Old Town area has pretty much dried up. (There are a couple of new properties, but you get the point.) My theory is that single family home owners are holding onto these scarce properties and are not panicking to sell. That could possibly happen in the future, but I doubt it.
The number of condos and town homes in Old Town is also limited. Truman Annex is a distinct market unto itself. I am seeing a deeper discount in the prices of condos and town homes in both areas. They are not maintaining their value as opposed to single family homes in the same areas. But their sales are not as depressed as condos on the east end of the island. The Old Town location wins over the burbs!
For the record there were 9 single family homes sales in Key West during July 2008 for a total sales volume of $12,341,000. The cheapest house sold for $330,000 (bank owned house on Eaton Street) and the most expensive was a historic landmark on William Street that went for $4,650,000. There were 11 condo and town home sales during this time period with the lowest going for $159,000 and the highest at only $1,150,000.
Sales of single family homes in July 2008 was better than July 2007. And July 2007 was better than July 2006. But if we go back to 2005 we see how much the market has declined since then. In July 2005 there were 19 single family home sales totaling $19,840,999. Single family home sales in 2008 are roughly 38% of what they were back then. Condo and town home sales totaled $10,990,100 in 2005 vs $4,730,500 this year for a 57% reduction. There were 8 condo and town home sales in July 2007 totaling $7,536,000 so sales on condos is worse this year over 2007.
There are buyers in Key West looking for bargains. They are looking for cheap. Those words are not synonymous. If you are serious about buying a house or condo you need to be ready to make a real offer that is "attractive" to the seller. The seller could be a distressed homeowner, an investor who needs to sell off some inventory to reduce mortgage payment obligations, or a bank asset manager looking to sell a foreclosed property. Give the seller a reason to look at the offer. Don't insult the seller with a price so low that it is not considered as serious. Make an all cash offer or get pre-qualified so that your offer does not have a huge financing contingency. In short, make your offer as clean and as simple as possible so that the only issue is boils down to how much money is paid and the date the deal is closed.
If you are a buyer and are looking for a deal in Old Town or nearby CLICK HERE and checkout the Key West Association of Realtors mls database. If you see a property you like, please call me, Gary Thomas, 305-766-2642 or e-mail me at firstname.lastname@example.org. We may not be at the bottom of the market, but that doesn't mean you cannot get a good deal before prices go back up. Wouldn't you just hate yourself all over again if you waited too long for a second time and missed the opportunity to buy a piece of Paradise before they become unaffordable again.
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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.