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Tuesday, May 15, 2012

But I Don't Play Golf - Key West

There are two types of buyers for houses in  Key West: people with money and people who wish they had money to buy what they want.  I have found that people with money often get what they want because they know how to buy what they want. They are decisive and go after the house. If they can't get what they want, they walk away and find something equally nice or they buy something less than what they want and spend the money to create exactly the house they desire. Since not even the rich can move locations, rich folks need to be flexible in setting their priorities. In short rich buyers are often decisive, flexible, and adaptive.

I have found that the second group of potential buyers is made up of people who are flexible as to the size, location, and amenities they may require. Most say they have a definite budget.  Some buyers indicate they might spend a bit more if they were to find a property that they really like. Many potential buyers are hoping to spend less in the purchase price and plan to use sweat equity to improve the property by upgrading the existing property. I have watched that show too many times on television. I am not so sure it plays out quite like that in real life in Key West.

There is a sub-section of the second group of buyers for Key West houses that has a definite price range.  This sub-section may include locals on a real life budget or potential second home owners who know exactly how much they can realistically spend on a second home in the Florida Keys.  It is to this group I am writing today.

I recently sent a group of golf course properties to a potential buyer to view. He sent me back an email stating "But I don't play golf."  Yeah, but you want a nice house with a pool and parking for under $300,000. You don't have to play golf to live at the golf course. You can't get a comparable value in any other part of Key West in my opinion.

I think the best potential bargain properties in Key West at the townhomes at the Key West Golf Club.  I spent some time and looked over the last six years sales history at the golf course and found the highs and lows.  I have previously written about the spike in sales and how prices escalated. Lots of new buyers purchased at the top of the market and then abandoned their properties after prices started to decline. That led to more declines as other owners started to walk away from houses that were worth less than what they paid. There were dozens of bank foreclosures and short sales that whittled away at the golf course.

But there was a core base of owners who bought early whose lives and fortunes were not turned upside down by the Topsy-Turvy real estate market. They maintained their homes and their home owners association continued to function even though challenged by other owners who stopped paying their home owner association fees. Good triumphed over greed as more and more homes were sold, the association coffers were replenished.  The home owners association is solid.

I decide to look at the recent history of golf course sales and compare the sales of cottages and smaller town homes as group one, spa homes in The Sanctuary as group two, and Grand Homes in The Sanctuary as group three.  All units in the golf course are legally referred to as 'townhomes' because of the way they were constructed based on lot size and setbacks, even the largest of the Grand Houses are town homes by definition.  The smallest units are referred to as 'cottages' even though they are attached to other units. So the nomenclature may seem a bit off base. But it works.

In 2006 only one cottage sold. It was a two bedroom one and one-half bath with 797 sq ft of living space that went for $475,000 or $596 per sq ft. The buying public was scared.

In 2007 the were six sales where the average price was $376,850 or $424 per sq ft.

In 2008 fourteen cottage homes sold at an average price of $349,050 or $354 per sq ft. and one Grand House sold at $735,500 or $389 per sq ft.

The market was recovering by the end of 2009 when 29 cottages sold at an average price of $248,248 (I checked, not a typo) or $242 per sq ft. and one spa home sold for $379,000 of $338 per sq ft.

In 2010 31 cottages sold at an average price of $263,345 or $267 per sq ft.  Four spa homes sold that year at an average of $349,250 or 325 per sq ft. And four Grand Homes sold for an average of $561,325. 

The year 2011 saw sales retreat a bit. Twenty-two cottages sold at an average price of $261,864 or $281 per sq ft. This is a slight decline in price per unit but the price per sq ft upped just a bit.  One spa home sold for $300,000 or $268per sq ft. That was a decline of $79,000 and $38 per sq ft from the previous spa home that sold in 2009. Two Grand Houses sold at an average of $561,250 or $325 per sq ft. This is important for what happened in 2012.

During the first four months of 2012 there have been 7 cottage sales at an average price of $302,429 or $280 per sq ft. That is an improvement over the past three years. And  there were five Grand House sales at an average of $462,800 or $299 per sq ft. This number would have been better except for a short sale that drug the other numbers down. That's the problem with statistics: they can give an impression that all properties are fairing badly when in fact some are fairing quite well.  The Grand House sales did decline in 2012 as compared to all prior years. Two of the houses were bank owned and I think that helped drag the other sales prices down.

I think we are at or very near the end of the real estate slump. I think the townhomes and Grand Houses at the Key West golf club are great buying opportunities for locals and potential second home buyers. Not all units are in great condition. Some units have been mistreated and neglected. Some may need some work to address years of abuse. Others have been lovingly maintained and are being offered for sale among a group where not all units are equal. Buyers address those issues in determining what they will pay by comparing condition and location. 

CLICK HERE to search the Key West mls. If you see something you like, please contact me, Gary Thomas, to arrange a showing. I am a buyers agent and a full time Realtor at Preferred Properties Key West.  Take advantage of our still fragile market.  You don't have to play golf to get a bargain in Key West real estate.

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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.