Sink or Swim -- Key West Real Estate

Two sales went through the mls yesterday that give us some insight into how the Key West real estate market is fairing these days.

Sale No. 1 was a bank foreclosure of a single family home at 1116 Eaton Street in Old Town. I showed the house about 5 weeks ago and it was pretty much the same as it was several years ago when it sold for a much higher price. The house has 2 bedrooms, one bath, a newer kitchen and a small pool. It is located on Eaton Street near the corner of White--one of the busiest intersections in town. It sits across the street from the entrance to Manley de Boer Lumber, Ace Hardware, and The Restaurant Store. CLICK HERE for more details on the house. It was listed originally for $379,900 and sold for $330,000 or $491 per sq ft.

Sale No. 2 is a Key West Landmark located at 1101 Casa Marina Court. It is the former estate of noted author Philip Caputo. It is one of the few Key West homes with a true ocean view. The home underwent some costly renovation and the gardens were extensively updated. It was originally listed for $5,750,000 and sold this week for $4,650,000 or $1,055 per sq ft. CLICK HERE for more info on this home.

For those that think the market price is Key West has totally tanked (or hope that it will), maybe your perception of the current market is a little skewed. I'm not trying to pick a fight with anyone. I think there are individual properties that are way over-priced based on condition, location, or the fuzzy logic of owners or their Realtors.

I am a pragmatist and I think the only sellers in Key West today are sellers who need to sell for some reason. Not all sales are distress sales. Some properties are "estate sales" where property is offered to help settle the estate of a recently departed. There are some divorce sales to be sure. This economic environment has cause a lot of marital stress. There are some developers or investors who have several properties that they purchased during the good times that they need to sell to reduce their mortgage payments. Those sellers may not be facing foreclosure, but they need to reduce the monthly outflow. The majority of listed properties are short sales and the offerings priced like short sales. And finally, there are the bank owned properties. They are typically, but not always, the houses that could not be sold because of legal issues, locational issues, or structural issues that made a regular sale nearly impossible.

Small houses usually sell at a higher price per square foot than a large home. Poorly located properties typically sell at a discounted price per square foot over those with a good location.
Houses on the market for a long period of time usually reflect some problem with the properties and that usually means a lower price per square foot. I don't pretend to understand how the appraisal process works, but these general rules seem to work quite consistently.

I see the sale of 1116 Eaton as being a reaffirmation of the value of Old Town as the place to buy. I remember showing similar properties to a New Yorker a few years ago. He said he didn't mind the street noise. He was used to it. He was looking for value and an Old Town location.

For those who think no house in Key West is worth a $1,000 per square foot, maybe you are mistaken. Maybe the Casa Marina sale will cause you to rethink the value of that location. I was showing a home last week to a couple who already own several homes in different locations including an apartment they purchased in the Belgravia section of London several years ago during a downturn there. They told me that the price per square foot is approaching $80,000 and that there is a line of buyers (Middle East, Russia, India and China)waiting to buy. Wish they were here!

If you are interested in buying a home or investment property in Key West CLICK HERE to checkout the Key West mls database. It is maintained in real time and you don't need any passwords to see what is available. If you would like to see a property please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. There are some deals to be had out there. Many properties are priced far below the Eaton Street house.