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Thursday, January 1, 2009

2008 - The Year in Real Estate in Key West, Florida

A couple of nights ago at the end of the CBS Evening News they ran a segment on people who passed away during 2008 like Paul Newman, Heath Ledger, Michael Crichton, Tim Russert, Jim McKay, George Carlin, Isaac Hayes, and so on. They were actors, authors, politicians, newsmen, and chess players extra-ordinaire. They were people who left a legacy of accomplishment through dedication to their art or profession. As I get older I have learned to really appreciate what others have done and what we all will miss because of their passing. For example, there are thousands of comedians, but only one George Carlin. So when we lose someone unique, we lose the promise of more from the one who passed.

I get emails and phone calls from people who are thinking of buying in Key West. Some people try to compare Key West with other areas of the country or narrow the focus to just other areas in Florida. I tell them Key West is unique. It is a part of Florida in name only. Key West is a place unto itself out in the middle of the ocean.

Our island is one mile wide and four miles long and there are about 25,000 full time residents. The size of the island and the population have remained pretty much the same for decades. Part of the island was "developed" by adding landfill to areas previously uninhabitable. That increased the land mass somewhat. That is not going to occur in the future. And the State of Florida has imposed a limitation on the population growth of the island (all of the Florida Keys actually). So it is not likely that the real population will ever increase to any significant amount.

Key West tends to get rebuilt from replacement or renovation of existing properties rather than following the models of growth in Miami and Ft. Lauderdale where developers purchase agricultural ground and build new subdivisions with houses that look like each other. Or where developers buy oceanfront ground and tear down existing structures and put up new ones. As a result, areas like Miami and Ft. Lauderdale have thousands of properties sitting vacant. If you want a real deal, go there. And you can live with hundreds of thousands of other people who drive on busy roads and go to shopping malls for fun.

During the past year I have commented on a lot of properties that I thought were good values. Many I called "bargains". Here are a few of the bargains that got sold in 2008, opportunities lost and sold at prices that we probably will not see again.

1101 Fleming Street is a sweet little house with a pool in a great location. Originally listed by another realtor at $850,000. It was re-listed by a new realtor at $599,000 and sold at $550,000. The buyer got an incredible deal in my opinion.

916 Washington Street is a major new home in the Casa Marina area. It was listed at $3,750,000. After over a year of marketing,the property last listed with another company at a new lower price and sold for $2,400,000.

1119 Olivia Street was a legal duplex in Old Town that had been newly renovated. It was originally listed at $1,149,000 and sold as a short sale for $550,000.

I wrote about 831 Johnson Lane after I showed it in the early part of the year. What an incredible Key West treasure it is. The property is made up of four separate cottages on a long and narrow parcel of land with a beautiful pool and enchanting gardens. It was offered at $1,295,000 and sold for $1,100,000.

Over at 1021 Johnson Street in the Casa Marina area there was a big bank owned house previously listed before the lender took possession at the asking price of $2,599,000. The bank sold the house for $1,500,000. There were multiple bids on this house and for good reason. The new owner has spent a few bucks and the place looks fantastic from the outside. I wrote about the house next door (our listing at 1020 Johnson Street) a couple of weeks ago. It is another house worthy of consideration in my opinion.

716 Southard Street is a very recent sale right in the heart of Old Town. It is a smaller two bedroom home with a pool and no off-street parking located a couple of blocks from Duval. It was listed at $599,000 and sold at $550,000 within a few weeks. Some buyers know a really good deal when they see it.

730 Passover Lane is one of my favorite properties. It is a one bedroom one bath house across the street from the cemetery. So lots of people would never seriously consider the house because of the location. I loved the location because it is so quiet and the view from the front door is one-of-a-kind. Originally listed at $795,000 this little gem sold for $430,000.

408 Grinnell Street is another bank foreclosure. It was a new house built to replicate a grand Key West style house. I showed this house several times when it was originally offered at $2,750,000. It sold for $1,325,000. Another steal.

There was a short sale on another great house located at 405 William Street. I wrote about this property a couple of times. It was originally listed at $2,250,000. It recently sold for $815,000.

Most houses in Key West are unique because very few were constructed by the same builder as is typical up north in America. Most were stick built by the property owner for his or her needs during different years, even decades, but all in a tight geographic area. Even the traditional "shotgun house" or "Conch Cottage" as we call them, vary greatly not because of the initial construction (which is typically similar) but because of additions added or remodels done over the years.

Our incredible climate and our laid back lifestyle attract the population that create the real diversity in our little island city. That is what makes living in Key West so much different than living anyplace else. You either "Get" the concept of Key West, or you don't. If you "Get" it, you understand why living here is living your life in Paradise. If you don't get it, there is a big beautiful world out there waiting for you. I hope you find it.

So here is a brief recap of recent single family home sales in Key West. There were 277 single family home sales in Key West in 2005 with a total sales volume of $324,571,954. In 2006 the sales volume shrank to $218,951,400 with 214 single family homes sales. The year 2007 saw the number of single family homes sales shrink to 189 sales and only $173,321,760 in sales volume. And in 2008 there were 197 single family home sales with a sales volume of $154,219,813. So sales are up over 2007 but down in price volume.

There were 11 single family home sales in the Old Town area during December 2008 with a sales volume of $6,988,000 and an average price per square foot of $434.62 per square foot. All houses in Old Town are not equal, so I know that reporting the average price per square foot may suggest that some currently listed houses are priced too high. Well, some are. But not all are priced high just because they are priced higher than the recent price per square foot. If you are a potential buyer and you base your decision to buy solely upon the price per square foot, you may miss an opportunity to buy a great property in Key West at a good price. There are some houses for sale that are so incredible that they can be considered treasures. If you limit your prospective purchase to houses that fall within a numerical range, you will definitely miss the chance to own one of the truly unique treasures. If you are a "market timer" and believe you can predict the exact moment the real estate market in Key West will swing upward, well, good luck.

There are 1124 houses, condos, townhomes, and multiple unit properties for sale in Key West. I sorted the single family homes in Old Town, Bahama Village, Truman Annex, and the Meadows and the number of available houses shrank to only 140. The least expensive is listed at $199,000 and the highest at $14,400,000. There are a lot of high priced unsold homes in this area so the average priced home skews upward to $1,468,925. There have not been a lot of buyers for the higher priced homes. And there is low supply of nice homes under one million dollars.

The recent government cash infusion into the money market is making loan prices more affordable, but most of the second home buyers in the Old Town area are cash buyers. I think the current "down" market and the huge supply of properties has created a tremendous buying opportunity for people who dream of moving here.

If you are thinking of buying in Key West, please consider using me as your Realtor. I am a full time Realtor. I don't wait tables or have a real job someplace else. I'm either at my desk looking for deals or showing property to prospective buyers. Maybe 2009 will be your time to buy a home in Paradise. Please call me, Gary Thomas, 305-766-2642 or e-mail me at Thanks, and Happy New Year!

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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.