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Saturday, October 2, 2010

Key West Foreclosure Update and More


There has been a lot of discussion in the media recently over the large number of foreclosures. Below you can read my thoughts about what is happening in Key West.

I made my own inquiry in the Monroe County Clerk's online records for September 2010 and compared the results to September 2009. I did a very superficial review of two fields that show the filing of new foreclosures (which occurs with the filing of a Lis Pendens). I did a similar review to determine how many Certificates of Title were recorded. (A Certificate of Title is the document by which the Court approves after the sale of property at public auction through judicial foreclosure. (The judge basically looks at the file to determine the rules were followed and the property was sold to the highest bidder.)

There were 70 new Lis Pendens filed in Monroe County in the month of September 2010. Only 17 of those Lis Pendens were for properties located in Key West ( including Stock Island). There were a whopping 152 Lis Pendens filed in Monroe County in September 2009. I counted 42 Lis Pendens filed against homes in Key West plus 8 timeshare units in September 2009.

Number of Lis Pendens Filed Sep 1 to Oct 1, 2009 all of Monroe County 152
Number of Lis Pendens Filed Sep 1 to Oct 1, 2010 all of Monroe County 70
Percentage Difference - .46% reduction

There were a total of 34 Certificates of Title issued by the Circuit Court in Monroe County in September 2010, but only 11 of those sales were for properties located in Key West. Furthermore, and definitely worth noting, 9 of the 11 Certificates of Title were for time share units. Only two of the Certificates of Title for residential properties in Key West. The number of Certificates of Title in 2009 for all of Monroe County was 64. Key West only had 18 Certificates of Title issued and 3 of those were for timeshares.

Number of Certificates of Title September 1 to October 1, 2009 64
Number of Certificates of Title September 1 to October 1, 2010 34
Percentage Difference - .53% reduction


For the readers who want to challenge my take on what is going on, have at it. I do invoke the admonition of Lawrence O'Donnell of MSNBC who says you are entitled to your own opinion but not own facts. Interpret the data as you want.

Maybe I am missing something but it looks to me like Key West has made a significant recovery over the same time period a year ago. There have been a couple of items in the media over the last couple of days where it was noted that JP Morgan Chase and Bank of America are suspending new foreclosures for a while. I noticed (and previously mentioned) the reduced numbers of new foreclosure filings. This has been occurring for the past few months. The reduced number of Lis Pendens substantiates this. I really think we are beginning to see a decline in the real number of new foreclosures.

There will, however, continue to be new short sales and new bank owned properties. The Monroe County Circuit Court is slowly working its way through a large number of previously filed foreclosures where the owners are contesting the lenders' right to take back the houses or condos that were not paid for. Most of these cases will likely be resolved in favor of the lender and probably end up as bank owned properties. The decrease in new foreclosure filings does not mean an end to the foreclosure crisis. It just won't be as bad as it was.

Sales at the Key West Golf Course have reversed course and prices are on the rise. Not by a lot and not in all cases. But prices are going up, not down.

Expect to see prices for single family homes in Old Town start to rise by December. Each year sellers put new properties on the market just ahead of the arrival of the snowbirds. Season (that time between Christmas and Easter) is prime selling time when buyers with money come to find new winter nests. Some bring lots of money and decorators. Others bring big hopes and the desire to get a good deal.

Most of the new listings I have been writing about for the past few months have been bank owned and short sales. I expect many of the new listings of nicer Old Town and Casa Marina area homes will be real world sales where the seller is not trying to sell a distressed property. You must remember that not all sellers are in trouble. These new sellers will add properties at higher price points. I know many readers follow our mls listings like hawks. Get ready for sticker shock. The supply of "nice" houses is low.

Houses that have not sold did not sell for a reason. It could be that they have been priced too high, but it could also be because of where they are located or that they required too many repairs. Nice costs more. Good location costs more. No work, very nice, great location costs a lot more.

If you are looking for a short sale property, a bank owned home or condo, or a stately Old Town property, please consider working with me, Gary Thomas. I am a buyer's agent. You can reach me at 305-766-2642 or by email at kw1101v@aol.com. I am a full time Realtor at Preferred Properties Coastal Realty, Inc. in Key West, Florida. Our office is the Lower Florida Keys Exclusive Affiliate of Christie's Great Estates.

21 comments:

Anonymous said...

A very nice column. Thanks for doing the legwork and keeping us posted.

Anonymous said...

Are you drinking the kool-aid Gary? I saw Thursday on Fox biz from the prez of NAR that we will see a major wave of foreclosures in the next 6 -12 months and predicts it will be 2012 before housing gets a rebound. Sorry - not believing this but why would NAR say if not true?

Anonymous said...

Statistical averages for a big country like the U.S don't necessarily mean much for a specific and unusual local market like Old Town Key West. Even though probably the great majority of Americans have been hammered in the last two years there's still a lot of wealth sloshing around...Looks like Gary may be picking up indicators that some is about to slosh in KW OT. Let's hope so!

g said...

Ya know Gary, I just wrote a long post about market timing and the folly of trying to time to absolute bottom of a market.

Then I thought better and deleted it.

Maybe we should try this. Maybe the old way was best. My folks bought a house because they wanted a home. They wanted stability, and pride of ownership. They wanted to fix it up the way they wanted it. They wanted privacy and independence, not a landlord. And they wanted to live around people who thought pretty much like they did.

Financially the house wasn't an investment so much as a savings vehicle. The house might go up some in price. But the idea was to pay it off for retirement and not have to pay a mortgage. The financial benefits were long term. People used to brag when the house was paid off. Now they brag about cash out refis.

Anonymous said...

All I can say is "Not Gary Thomas" cracked me up. LOL!

As for homes in Key West, it seems we're seeing more affordable Old Town homes come on the market. Whether that's true or not, I'm not sure, but that's how it looks to me.

Anonymous said...

JACKSONVILLE, Fla. -- A new ranking says Jacksonville is the most affordable real estate market of all the cities in FL.

Coldwell Banker put together the list, which is based on average listing prices in nearly 300 markets.

The most affordable city in FL,
Jacksonville, ranked 59th, with an average price around $185,000.
Orlando ranked 88th at $202,000, and Tampa ranked 140th at $242,000.
Gainesville was close behind at 145th, with an average price of $247,000.

And the most expensive city in FL is one of the most expensive in the country. Key West is in 262nd place out of nearly 300, with an average price of $643,000.

People with money read this on the web and make their decisions based on where their money can make the best investment for them. Key West isn't there yet - and to speculate that prices will go up this season is far from accurate and a bad guess at best. Until prices come down, which they will, sellers need to get real or get left out.

Gary Thomas said...

Fox News knows nothing and cares less about Key West, Florida. Except if there is a hint of a hurricane so somebody can fly down to stand on Duval and comment about all of the damned fools that did not obey the evacuation order. (Then go to Sloppy's for drinks-and more.)

There are those who want to say the end of the world is upon us. It may be. I do not agree that we are, however.

I think the slow down in new foreclosure filings, especially compared to last year, which was a gut wrenching reaction to the market collapse and massive unemployment across the country.

We had a huge economic downturn after Viet Nam. We had two one term Presidents and then Ronald Reagan. That led to stability or sorts.

Clinton's presidency started with a recession but we had a great economy at the end of it.

Obama took office just as everything was starting to fall apart all over the world. What is going on here in America is going in Europe and elsewhere. Things here would be a lot better if the loyal opposition was more loyal and not so opposite on every single thing. I remember after 9-11 all the Senators standing on the steps of the Capitol. It was a show of strength and solidarity. Nobody took pot shots at Bush. Nobody decided to try to undo his presidency. The Senate and the House stood together. Today, we have a totally different but equally challenging crisis. The opposition does just that-it opposes.

Yesterday's blog was not about real estate as an investment nor market timing. It was just meant to point out that we are at a moment that the market seems to be telling us the huge surge in new foreclosures is over. I am inferring from the statistics that the declining number of new foreclosures means that many of the bad loans have already been identified and handled. That does not mean this mess is over. It means it is not as bad as it was. Maybe (to us a Viet Nam era phrase) we can see the light at the end of the tunnel.

If my assumption about the Key West market rebounding in December is correct, we may begin to see a small rise in prices. Certainly, any rise in the market should lead to at least more market stability.

Gary

Anonymous said...

So the president of the National Association of Realtors goes on Fox News, the highest rated cable news network I might add, and LIES? Come on Gary - you can't believe that and you know it. You just want to spin the facts and distort the truth as far as I can tell. You pay dues to NAR and yet you don't believe their predictions of the real estate market? What colour is the sky in your world as this makes no sense.

Keep saying the lies and sooner or later you will start to believe in them. As for this election year, yes changes will happen but to stablize the falling market is not one of them. Can you say tax increase? Out of control spending by the current majority in Congress? Health Care most Americans do not want? Or are you oblivious to the fact that the wealthy are gonna get banged with a huge increase in estate and personal income taxes come 2011?

I can't wait to see the outcome...

Anonymous said...

That's great insight. All we hear in the national news is how the 2nd big recession dip is coming and how the average home price keeps falling in our hometown of "anywhere USA."

Our realtor (Gary) just helped us find a bargain bank-owned condo in old town, after months of exhaustive searching. Like an earlier comment said - we're not buying to speculate, Gary helped us find a "buy and hold" little piece of the Key West dream. His post on the foreclosure rate only helps justify what our heart knows, we got a great deal on a great place IN A great place... Everyone else can wait til the next big wave of KW foreclosures comes (my guess is the Tsunami has come & gone...at least for this 'bubble).

Robert D. said...

"Keep saying the lies and sooner or later you will start to believe in them."

You don't say...

I always love how Repugs think Faux News is so fair and balanced... what's that? Oh yes, keep saying the lies and sooner or later you will start to believe them.

Faux News, the only true news source. Everyone else is the "liberal media." Riiiiight. Every other news organization is wrong and Faux is right. Wow.

Some people will never get it.

Yes, the wealthy are going to get hurt and have been hurting all along. Please. Do you honestly think the rich are going to go around in recession times sipping champagne and eating lobster?! Are you nuts??

I was in the Hamptons this past summer scouting properties and let me tell you, there's no recession there. For you or anyone else to think otherwise, well, you're only fooling yourselves.

Execs put on their sad faces and come out and say they need to cut jobs... look at the markets, look at RECORD BREAKING earnings. There's no reason to hire all those people back when the company is running fine as is. Payroll is the most expensive part of a company, that's econ 101.

I hate to get off topic like that, but the ignorance is astounding. You've fallen right into the trap and are out there with your fellow nitwits protesting on behalf of the big boys. All they need to do is throw you a scrap of half rotted meat and you'll be singing praises like you've hit the lottery... meanwhile they're out there purchasing five new mansions as opposed to the three they'll only be able to get if they get a tax hike.

Wake up and smell the coffee, please.

Gary Thomas said...

Robert and all, I gotta confess I do not "read" as much as I should. I "do" get most of my news from TV. I watch MSNBC a lot and Morning Joe in particular. Joe Scarborough is fair and Mika and the rest of the bunch keep things fair and honest.

I was surprised beyond belief to learn how many really big multi-national companies are "S" corporations. These are the corporations the Republicans are trying to push over on the public as "mom and pop" companies that earn over that magical $250,000 per year. I can't find the list.Wish my google were smarter sometimes. One of the BIGGEST "s" corporations is BECHTEL.

COPY and PASTE this http://www.reachingcriticalwill.org/corporate/dd/bechtel2.html
if you want to see how really big a small company can be. We are not talking hundreds of thousands or even millions of dollars. We are talking BILLIONS of dollars each year.

And if you read the link you will see the business plan of just one business entity-the privitization of water supply to third world countries. Imagine, as this piece points out, the decision to buy the private water or "forcing poor people to choose whether or not water takes precedence over food, clothing, or shelter. Privatizing water systems translates into a guarantee of steady income for corporations that secure a monopoly over the water system."

I'm no Commie. I pay my taxes. We all must pay our taxes. The filthy rich who can afford to pay and don't pay ought to pay.

I agree with Robert about FAUX news tricking some into falling into the trap: "You've fallen right into the trap and are out there with your fellow nitwits protesting on behalf of the big boys."

Bechtel isn't the issue. It is a big example of a tax strategy on STEROIDS. Regular people who earn a lot of income can use the same tax structure to protect their earnings. All I want is for those people to pay their fair share.

Like Robert D says "Wake up and smell the coffee, please."

It is 5:50 am and I'm on my second pot, Robert.

Thanks for your insight.

Gary

Anonymous said...

Well this thread is certainly waking people up. It's about to demonstrate the "web blog Nazi law"--any blog thread that goes on for 18 comments ends up with someone calling someone else a Nazi.

Let's go back a step. Gary looked at some preliminary numbers. He said right up front he was not presenting his analsis as the definitive statistically accurate answer to Why The Universe Was Created. He was only scanning the numbers of September, year over year, for foreclosures. Then he suggested a possible reason, i.e., the market in Key West--not in Las Vegas, not in Arkansas, not in the entire country, just in Key West--may, just may, be bottoming out. And suddenly we're about to thrash out the pros and cons of the TARP bailout? That Obama is actually Bela Lugosi reincarnated? Come on people, get a life, get a hobby, take your meds!!!

Anonymous said...

And the posts here remind me that there are people who believe the spew from the liberal left that all is fine, housing will be great and we are in the best administration ever. Horse Hockey!

Wait till the dems lose in November and the conservatives take back the government. No more bail outs. No tax increases. And no more crap from the left.

And get this - Fox News has more viewers than MSNBC and CNN combined.

You want fair and balance? Than quit listening to the pundits that spew hate and garbage. And that IS NOT Fox.

Anonymous said...

Now, that last comment is hilarious. But the guy is not a Nazi. He's more like the doltish Germans who followed the Nazis to their own doom.

"No more bailouts" - here's a reminder that the TARP was proposed by Bush and passed with large Republican majorities. "No tax increases" - the biggest tax increases in our lifetime came under Reagan and Bush I. "No more crap from the left" - sorry, guy, we're in the majority. Your old all-white "Morning in America" is a fantasy.

Robert D. said...

I don't blame you for not reading as much down there, Gary.

Key West is not filled with as many loons as we have up here in the "southern south."

Day in and day out it's always a challenge because the people here are so crazy that they go out in public spewing their lies and hate about everything under the sun.

If you aren't up on the news and these wackos are out their spreading their lies and hate then those uninformed people naturally start to believe the nonsense because that's all they hear.

It's honestly all quite scary. People here seem to be gearing up for another Civil War.

Well we've gotten quite off topic, haven't we.

I've been waiting on a blog posting about the Porter House sale. I have to say I'm shocked it sold, especially at the price is sold. Granted it is a large parcel and in a prime location, but even still, my jaw was literally on the floor.

Anonymous said...

None of this matters. Obama rama has spent more and put the US so far in debt our grandkids grandkids will still be paying it off. So much for TARP which while under Bush escalated under the dems.

However, the worst news is China is drilling less than 50 miles from Key West. Deep water for that matter. So much for Key West as you know there will be problems. Think about everything made in China! Can you say nasty oil spill to ruin all of South Florida in the next few years? Not to mention the fishing industry or the tourists.

Why is this happening so close to Key West and why isn't anyone up in arms about it????

Doesn't anyone care?????

Gary Thomas said...

Robert: There is another big sale from last week that you did not see in the mls because the listing agent did not put the listing there. I'm referring to the sale of the Paradise Inn, an 18 room guest house on Simonton Street. The asking price was $4.2 million and I heard it sold close to the asking price. I can't find details yet. I've been trying because I have a buyer in town looking for a guest house.

That would be two big sales in one week. Almost like to good old days!

Gary

Robert D. said...

REALLY?!? China is drilling just 50 miles off Key West??? Say it ain't so! Oh, wait, it ain't so.

Google is your friend anon. Don't believe more lies. I'm not saying that in a mean way, I'm saying that in a way where I hope it will make you do research of your own and not just believe something because someone you like said it.

http://www.politifact.com/florida/statements/2010/mar/31/cliff-stearns/cliff-stearns-cuba-china-oil-drilling/

http://www.bradenton.com/2010/09/29/2613115/cuba-poised-for-offshore-drilling.html

http://www.factcheck.org/askfactcheck/are_the_chinese_drilling_off_the_coast.html

Now, I'm not going to keep going back and forth on it, this is a real estate blog so let's stick to that.
---------------------------------

Gary, let me know when you find out the sales price. Not in the MLS sounds like I'm back in the Hamptons which is one of the last real estate markets in the country without an MLS system at all. You have to pay to gain access (as a firm which is I think around $50-$75K a year) to listings in the area which is why it's dominated by very few companies such as Corcoran, Brown Harris Stevens, and a few others. It's very exclusive, very much a monopoly and very much not welcoming to outside real estate firms, not to mention it's hard to verify what Realtors there are telling you and whether it's the truth or not.

It's very interesting that the Paradise sold though. I will say at that price and for the number of rooms, it certainly seems more feasible than other inns on the market today. After running numbers and talking with the bank, the number of rooms in places like 325, Marrero's, EL and RLV (as is) is just not going to make it work. Even talking about NH there were concerns.

With more rooms or majorly reduced prices they would obviously all work beautifully, but without that it's not feasible.

18 rooms at $4M-ish is not a bad price in my opinion.

Anonymous said...

Uh yes, they are ready for next year oil and gas drilling. Exploratory rigs off the FL coast with equipment that goes deeper than the BP rig that just exploded. They say they plan to drill 22 miles north of Havana and 65 miles from the Marquesas.

Get your facts before you post. From the Miami Herold:

http://www.miamiherald.com/2010/09/29/1849526/cuba-ready-to-drill-deeper-than.html

So get ready for the gusher!!!!

Anonymous said...

Porter House has no transient licenses as the listing states: "Transient licenses would need to be obtained.'

How do you run a guest house without a trasient license for each room to rent? The answer is you don't unless you buy them and that adds more money to the sale. How much is a transient license going for if you can get them?

Gary Thomas said...

Look under commercial listings when you do an mls search. That is where you may find a transient license. One is currently actively listed for $50,000. Buyers need to verify that any particular license is "portable" or that the recipient site can accept the particular license for the room or space you intend to rent.
Gary

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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.