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Tuesday, November 11, 2008

Real Estate Market Lows, Real Estate Market Woes!

I was talking to a fellow Realtor yesterday about the current real estate market in Key West. I was asked my opinion of what is going to happen.
I don't have a clue. I see great properties that cannot find buyers. There are buyers. Don't get me wrong. They just don't want to buy now.
One of the commentators on CNN or MSNBC was recently discussing the huge drop in the stock market during the past weeks. He spoke about the stock market testing new lows in an attempt to find it's bottom.

That discussion caused me to look at the single family homes that sold during the period between October 2007 through October 2008. I included all single family home sales from Sunset Key just off shore from Old Town through Shark Key. These homes are all in the Key West Association of Realtors database of homes in Areas One, Two, and Three. I did not exclude any sale. So the material is raw. And it is uniform in the sense that it was not manipulated. Statistics can be used to show just about anything. I'm not trying to prove any particular point. You as the reader can draw your own conclusion as to what the data shows.

The "spike" in prices during June, July, and August occurred in months when we had a couple of very high priced per square foot sales in Old Town and Sunset Key. Had those sales not occurred, the monthly averages would have been reduced.

The drop in sales during September and October 2008 is pretty much a seasonal occurrence. Sales during the summer usually take about 45 to 60 days to close. So the early fall sales reflect the lack of earlier sales activity. The disturbing reduction in price per square foot sales during September and October 2008 from September and October 2007 is troublesome, however.

The graph at the top of this page is the result of my attempt to try to figure out what our market is doing. I am not a statistician. I do not claim the figures are anything more than I mentioned earlier. You can judge for yourself.

If you think prices have dropped enough for you to seriously consider buying a home in Key West, please CLICK HERE to search the official Key West MLS database in real time and without registering with anybody. If you find a property that you like, please call me, Gary Thomas, 305-766-2642, or e-mail me at


Anonymous said...

Even with raw data, the message is probably pretty simple: The market is wringing out the excesses of 2001-2007 when "irrational exuberance" and flipping drove grossly inflated market pricing expectations. That October '08 price per square foot would pretty much take most properties back to the 2001-2003 point -- before things went nuts. How much farther to fall? Probably not back to 1999, but anything listed above the 2001-2003 price point may have a ways to drop.

flipper said...

Anonymous I think you have summed it up very well. I completely agree.


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Gary Thomas in a Nutshell

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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.