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Wednesday, November 3, 2010

1505 Pine Street - Bank Owned - Key West - Do the Math


Do the Math

The local bank that owns the three remaining homes for sale at The Meadows just dropped the asking price. Two of the Bank Owned homes are three bedroom models and those are the properties I want to discuss with you today. I think they are a real deal and you may feel the same after you do the math.

1505 Pine Street is a 3 bedroom 3 1/2 bath home that was built in 2008. The bank foreclosed on the entire development (except the model which was financed by another lender). The units have not been lived in. This three bedroom unit is a two story 1629 sq ft home that sits on a 2503 sq ft lot. It is now priced at $825,000 or $506 per sq ft. The listing Realtor describes this home like this:
"...Built with quality materials and craftsmanship, this home offers everything one expects in a luxury residence. The first level features marble floors, soaring 11' ceilings, a wall of glass doors leading to the private pool and spa. A gourmet kitchen provides solid wood cabinets, high-end stainless steel appliances, luxurious granite countertops & lots of storage space. The living room features a wet bar and is great for entertaining. The bedrooms are en suite and feature high ceilings & sumptuous baths plus a second floor laundry. A private carport has an entry through a gated drive. Lush landscaping provides a tropical backdrop for this spectacular home."






If you have walked inside as many Key West houses as I have you would be impressed by the quality of the materials used and craftsmanship that went into the design and construction of this home. Light fixtures, fans, toilets, kitchen cabinets, etcetera all have functions but life teaches us that some things are made to last and some things are made cheap. Sometimes cheap lasts a long time. Usually not. These homes were designed and built to sell in the $1,700,000 and higher price range. The developer built quality and long term value. The developer obviously missed the market: these homes came onto market after the decline had begun and failed to price the homes into the market quickly enough. But the developer did succeed in building quality homes.

Architectural details including crown molding, high ceilings, porches and solid wood doors. The wood doors on the first and second floor front are massive and of the highest quality. The 8' sliding doors that separate the living area from the pool are hurricane impact resistant to 155 mph that open wide to let the outside become part of the inside. The exterior features Hardiboard siding which is pest resistant and easy to maintain. The roof is a tradition Key West metal. While the home looks old on the outside, it is built to the highest building standards in the State of Florida. This means long term costs of maintenance and insurance should be lower than a similarly sized stick built older home in Old Town. A private, gated drive leads to the carport and a separate entry to the private pool and spa area. Each home is completely fenced and beautifully landscaped.



One of the biggest challenges to selling these homes is the fact that they are not "old". Buyers in the sub million dollar price range seem to prefer the original Key West homes with the Dade County Pine walls and profess a willingness to buy a fixer at a better price than to pay for a house that has had all the flaws of age fixed. Some will be willing to accept a home without a pool or parking or both if they can get a good deal. Yes, folks will settle for less to save money. I get it. I accept it. If a buyer wants old, buying new that looks old is not an option. Saving a few thousand dollars now (especially at today's historic cheap interest rates)

Here is the math quiz: 1505 Pine Street is offered at $825,000 or $506 per sq ft. CLICK HERE to review the mls listing info sheet on this property. I did a search of other 3 bedroom homes in the Old Town area (I even added a bank owned property on Atlantic Drive) priced at or under $825,000. CLICK HERE to see the mls datasheets on each comparison property. I have written about some of these homes previously. I have shown them. I know what they feature and what "issues" they may have. The average asking price on the comparison homes is $774,555 and the average price per sq ft is $396. It looks to me like the price difference is about $50,000 or so. The question is which is the better value. You do the math.

If you are looking for a quality Key West home priced below a million dollars, please call me, Gary Thomas, 305-766-2642. I am a full time Realtor at Preferred Properties Coastal Realty, Inc. Let's go house hunting. Let's look at some of the homes shown above and do your own comparison shopping. Let's compare age, features, amenities, presence or absence of pool, parking and landscaping, quality of construction, location, and cost of insurance. I'm not saying that 1505 Pine Street is the best deal. But I do think it is a very good property that ought to be given very serious consideration. Do the math. You may agree.

3 comments:

Anonymous said...

This is a condo association with condo fees. And the bank owns three? How easy would a prospective buyer have in financing this with 3 of the 8 units bank owned? Any back owed fees or taxes? Just a thought to pass along - when almost half of the units are bank owned it may be a great deal and nice fixtures but a bear to buy and harder to resell should the other units fall.

Gary Thomas said...

Dear Anon: Three units have sold. The bank owner has 3 units for sale at this time. They are all priced the same, but I chose to write only about the 3 bedroom units for price comparison purposes. The remaining two units will be offered for sale when the current three have sold.

This is a land based condo association. The common area is the private drive behind the units that provides gated access to the covered off street parking and the water retention area built alongside Eisenhower Drive. Water runoff from the homes gets diverted to the retention area during times of heavy rain.

The HOA is fully funded and has been since the bank became the owner and stepped into the shoes of the developer. It revised (with the other owners) the HOA the duties of the HOA and reduced the fees from $1200 per month to about $219 per month. The HOA owns and manages the private drive and retention area. It pays taxes and insures those areas. That is all.

The lots and houses are owned by the individual home owners so there is no "risk" to other owners if an individual owner should lose his home. Florida law protects all condo and townhome owners from defaulting owners by requiring foreclosing lenders to pay up to one year in past due hoa fees at closing. As a practical matter, nobody should purchase a unit that is not conveyed clear of all liens including past due water and sewer bills.

The bank owner will provide 30 year fixed mortgage to a new purchaser. Rates vary based on credit and down payment. But it is available and it is priced at competitive market rate.

Your math is good. Your logic and questions were excellent. I should have offered more information.

Gary

Anonymous said...

I have looked at these properties and did not like the layouts of them -

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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.