Why Does Real Estate Cost So Much in Key West?
I was doing my morning internet surfing today and ran across this picture (bottom right) on flickr.com . The caption read: "This house is for sale by the famed Christie's Group. This 'Preferred Property' is about to fall down, which I found marvelous." That got me to thinking about discussing why housing in Key West costs so much and why the current downward turn benefits would-be buyers.
The house pictured was listed in July 2006 at $799,000. It is 1638 square feet on a 1959 square foot lot. There is off-street parking. And it was priced at appraised value at the time. The price has been dropped to $599,000. The good thing about this house is that it is in a good relatively good location in Old Town, but not the best. It obviously needs lots of work, but it does have the street appeal that makes it desirable.
The top four photos show a house in the 500 block of William Street as it looked a year ago and as it looks today. The restoration is almost complete. The tax records show that the existing house was 2827 square feet under roof. It looks like the square footage has been increased as the property was restored as well.
The property was sold a year ago for $1,225,000 and sold in January 2007 for $3,495,000 CASH.
The process of restoring a home in Old Town Key West is similar to any other town with an architectural review committee. The Historic Architectural Review Committee (HARC) controls that process in Key West. The City has a designated official that ensures that the city code is enforced with respect to all homes in the Historic District that are subject to the code.
HARC reviews all planned renovations, restorations, and even new construction in the Historic District to ensure that the historic character of the Old Town area is not diminished by new construction. It has strict guidelines that it jealously protects.
Old buildings such as the one pictured and chided as a "Preferred Property" cannot be torn down and rebuilt. Instead, buildings like this must be conserved and restored. Costs of such conservation and restoration often exceed the costs of normal new construction. The end result is that the cost of acquisition, planning, reconstruction, landscaping, etc. all add to the cost of the final home. But then the final home is often a work of art.
There are some great buys in Key West because of the market downturn. Prices will not stay at there current low rates and those people who buy now ought to reap great rewards in the future.
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