Key West After Irma - Dealing with Real Estate Looters

It happened last week, but I was prepared. I had seen this movie before. I would not fall for it again.

I got a phone call shortly before dinner. A man with what I thought was a New Jersey accent introduced himself and started on a very quick exposition about something. He talked so quickly that I thought he was one of those internet website salesmen who call me at least once a week to try to sell something. I interrupted him to ask "Are you trying to sell me something?"

He replied "No! I am a cash buyer.  I am looking for a Realtor to help me buy real estate in Key West. I can buy residential or commercial. It does not matter. I can close next week." Then he added "With all the destruction that happened after the hurricane, there will be a lot of sellers who just want to get out quick. I want to take advantage of that."

I paused for a mili-second.  I had seen this movie before. It did not end well. A few years ago another guy pulled the same maneuver after the FAKE British Petroleum Oil Spill hit Key West as reported by CNN and the Weather Channel. Oh, the BP oil spill was a real disaster and real oil did land on much of the coast of Florida, but it did not reach Key West. But the story got out that the Florida Keys also had been damaged by the oil sludge. The public bought into it. Our tourism business was deeply damaged. Our real estate business was severely impacted as well. We were still recovering from the 2008 real estate collapse. The fake sludge turned our recovering market upside down for a couple of years. There were some "deals" that did occur as a result. I tell buyers that sellers are always dying, getting divorced, moving out of town for some reason. Sellers who have to sell make the best deal they can at the time. Sellers who don't have to sell can wait it out. That's why smart money normally wins out over time.

I had one buyer who was so convinced that the oil spill would ruin Key West's tourist business that he talked about walking away from his pending contract to avoid a loss. He was going to buy a very large and quite special Shipyard condominium unit. His contract price was half of what the existing owner paid for the place a couple of years earlier. That seller who bought as an investment short saled the property thinking the Key West market was jinxed. I convinced my buyer to close the deal. (He sold the  unit a little over a year ago and almost doubled his investment.) Another agent told me about his customer who walked away from a $50,000 earnest money deposit to avoid a much larger perceived loss down the line.

The potential buyer I mentioned earlier did not want to buy a house. He wanted to get a really good deal. He had CASH and he thought his cash was the end-game. He could swagger in, flash the cash, and take some other person's prized property at a bargain price. I sent him various MLS listings and described why the various properties might play into his investment strategy. He ended up not buying anything.

So when the fast talking guy called me last week, I decided that I really did not want to waste my time dealing with someone whose goal was the same. I explained that Key West did not sustain the same kind of real property damage that happened in the Lower Keys. The physical damage shown on national television showed sections of island homes ripped apart to varying degrees. That did not happen jn Key West. Instead, Key West lost many canopy trees, palm trees, and tropical foliage. Some our largest banyans, mahoganies, and royal poincianas were toppled. This is a multi-generational loss.

I told him our housing stock is and has been very expensive for years. Our sellers know the value of their homes, the value of Key West as a destination location, and that almost every home on the island is a beneficiary of our consistent price appreciation that beats the national average year after year. I told him in the few days after Irma there only a few new listings and only a few price reductions. I hypothesized that prices will continue to rise as Americans vote to buy in  Key West rather than far away and more vulnerable locations.

I told the man I couldn't help him. (I could. But I knew he would not listen to what I had to say. He already had his mind made up as to potential bargains galore as Key Westers wallow in pity.  I would be wasting my time and his.)

I have been selling houses in Key West for 23 years - mostly to rich people because it's the rich who can afford to buy here. (Rich to me is anybody who can afford to buy a second or third home for $500,000 or more. Up north, in America, most people don't spend that much on their primary residence.) Most of my buyers are cash buyers, but unlike the guy I turned away, my buyers are looking to buy a home - a place to either live full time or part of the year. They have a dream about living in the Keys. They should all make money on their homes when they sell.  Prices go up, not down, in Key West. And during the in-between years, home owners can have one wonderful time living in Key West.

I had to stop at a stop light today on my way to my office. I noticed most of the mahogany trees on Simonton Street which were stripped bare by the storm have already got their leaves back. 

The clean-up of fallen trees is proceeding ahead. Within a few weeks Key West will look pretty much like it did before except for a lot of tree losses. I found a photo of the county court house taken in February 2017. I went over to th court house this morning to take a photo to show the same viewpoint and a second photo to show the remains of one huge uprooted trees. It is sad to lose so many lovely trees. Our buildings and our old houses survived just fine.