Two Tales of a City

Part 1
I attended two Broker's Open Houses on Friday and saw two totally different kinds of properties that are priced just about identical. I thought it would be interesting to compare the two for prospective buyers.

Friday afternoon we were treated to sushi, veggies and fruits at the poolside cabana at the William Fleming House, a historic condominium at 800 Fleming Street. The 2 bedroom 2 bathroom unit is on the second floor and occupies 1421 square feet of space plus and additional loft area (not counted in the square footage). This unit is constructed of Dade County Pine walls, floors and ceiling, so it has that "old Key West feel" that some many buyers want. But it has a new and very modern kitchen and equally elegant bathrooms that give this property a distinctive New York loft feel--at least to me.

The ceilings are very high and the doors and windows open to decks overlooking the pool below and the pristine homes on William Street. This unit is priced at $1.075,000 or $757 per square foot. The condo is located on one of the best blocks in Old Town and is a convenient walk to everything. The property is 3 blocks to Duval and 3 blocks to the historic seaport.

So many condominium's feel cramped and confined. But this one is the opposite: it has the feeling of lots of living space and different living areas with very sophisticated edge.

Tomorrow I will discuss the new Santa Maria Condominiums: hence the title "Two Tales of a City".

To see more detail on this listing, please click the title above "Two Tales of a City".

Here and There

It's Valentines Day and everybody is in a good mood, right? There are two photos to the right. One is looking out onto a snowy yard from inside a cold house up north in America. The second is a photo out an open window overlooking sunset in Key West.

I just checked the weather in upstate New York near Saranac Lake, Adirondack Regional Airport, New York. It is -16F. Brrr. It is 9F in Denver, my life long home until moving to Key West in late 1993. The upper midwest and northeast is covered in snow.
And it is 81F at 11:30 AM here in Key West. That is one of the reasons I moved to Key West: The Weather!


If you want to move to Key West to avoid winters like this, click the above title "Here and There" to preview all real estate listings in Key West. Please contact me to help you find your new dream home in Paradise. You won't be sorry. Call me toll free at 1.877.295.7099.

For Sale by Owner in Key West: Buyer Beware

I was nosing around on the Internet last week and found an ad for a Shipyard Condo that was "For Sale by Owner". I read further: "This one bedroom (800 square feet), fully furnished condo is located in Truman Annex..." The condo was priced at $610,000.

Thinking I might turn this FSBO into a listing, I checked out the property. While the owner did not list the unit number, it was easy enough to figure out from public records, as I knew his name, and coincidentally had researched listing the unit a couple of years earlier for the previous owner who sold it to the present owner as a FSBO. (The previous owner wanted me to cut my commission to get the listing and still offer a 3% split to the selling broker. But what he really wanted was for me to do a CMA (competitive market analysis) to establish a price for the unit).

I knew that the unit was 600 square feet as opposed to the 800 square feet the seller had advertise. I sent the owner an email advising him of his error and told him that there were 23 other units on the market in the Shipyard complex, 4 of which were also one bedroom and similar size, but priced differently. There has always been a waiting list of potential buyers for Shipyard condos, but this new market has created an oversupply of available units. So prices are dropping. It could be that the previous owner misrepresented the square footage when he sold the unit to the current owner. I just checked the site where I found the ad for the unit, and the current owner is still running the same ad with misleading information.

In the 1986 landmark case Johnson vs. Davis, the Florida Supreme Court found that sellers cannot conceal material defects. In that case, some prospective buyers were looking at a home and noticed evidence of a roof leak. When they asked about it, the sellers admitted there was a leak long ago but that it was completely repaired. Before closing on the house, it rained, and the buyers discovered that the roof was still leaking. They sued to get their deposit back and won.

Material Defect
Defects, including any property damage, malfunctions of major systems and environmental hazards affecting the condition of a home, which should be readily disclosed to a buyer.

I mention the Johnson vs. Davis case as an example of things to avoid when dealing with a FSBO. I advise every buyer of mine to engage a professional home inspector to inspect a property as part of the purchasing process. Sellers often forget, overlook, or even intentionally misrepresent the condition of their property when trying to sell it.

I am of the opinion that sellers who are unwilling to pay a 6% commission to a realtor to sell their property are going to be difficult and cheap to deal with. Difficult because they want to control things. They want to control the information regarding the property and what the prospective buyer may see, when, and for how long.
They may unintentionally represent or omit material facts regarding the property such as square footage, previous flooding, or some other matter that might kill a sale. Cheap because they think all there is to selling a property is putting up a for sale sign, running an ad in the newspaper or Internet, and filling out a printed deed form obtained from a legal stationery store. They think they do not need a realtor to do something so simple.

But buyers who deal with a FSBO do so at their peril in my opinion and experience.

In a lighter note, I am including some photos from my yard. One pic is of a huge Canary Island Date Palm with bougainvillea on a trellis below. The other pics are of baby pineapples by my pool. My Date Palm got sick after Hurricane Wilma and started yellowing. I called the Florida Extension Office and a representative came to my house, took pictures and sent them to the University in Gainsville to determine what was going on. The tree needed fertilizing to combat the salt water damage from the storm. Case solved. The baby pineapples are like rabbits, if you get my drift. I "borrowed" one from the grounds of a hotel in Miami about 8 years ago. It has reproduced itself several hundred fold. It is truly a joy to watch as each new crop of babies come to fruition.

One of my biggest real estate mistakes in Key West

During my first trip to Key West in March 1984 I decided that I wanted to buy a guest house and move here. I would ditch the corporate world of America and escape to Paradise.

My first Realtors were a gay couple that did not own a car. So I had to walk to or take a taxi to look at property. They got out of the business (I wonder why...) and I met Mitzi Krabil, a realtor who worked at the same company. I made many trips to Key West and looked at several existing guest houses and properties that could be converted into guest houses with Mitzi. And for a variety of reasons (mostly self created), I did not buy any property.

Then in late 1986 or early 1987 Mitzi called me and said that the Q Rooms on Fleming Street were just listed for sale at $280,000 and suggested that I buy it quick. Now Mitzi had never suggested anything that brash earlier. I knew what the Q Rooms were: a run down boarding house with 14 rooms and 14 licenses meaning that I could convert property into a 14 room guest house. I had once seen a street person sleeping under the front porch. I let my snootiness get in the way of my brain and said no to the notion.

The building was located on the corner of Fleming and Simonton Streets--just a block from Duval, but right in the heart of Old Town. It had the right number of rooms to create a successful and profitable small hotel operation (12 to 15 rooms is perfect). Like I said, I turned up my nose. Two building contractors (and their wives) purchased the property for $270,000 in March 1987 and opened the Hotel Marquesa and the Cafe Marquesa in 1989. (I'll tell you a story about the Cafe another time.) They later purchased two adjacent parcels and enlarged the property. The enlarged property with 27 guest rooms, two pools, glorious gardens, and covered parking opened just in time for Christmas in 1994. And it has been a raving success from day one.

The photos to the right show the building as it appeared on my first trip to Key West in 1984 and today plus a photo of one of the pools. If you click on the title "One of my biggest real estate mistakes in Key West" you can tour the Marquesa's website. I would estimate the current value of the hotel and restaurant as $15 million. I mention this experience because of missed opportunities. I think I reacted to the opportunity to purchase the property the way a lot of would-be buyers react--especially in a volatile market. I found a reason not to buy the property. I vividly remember the bum under the building every time I think about what could have been.

The real estate market in Key West is depressed today just as it is in most pats of the country. Would-be buyers are waiting for the prices to settle before making a move. The demand is there, but the buyers are pretty much holding back--waiting. I understand why they are holding back. But there are some real bargains available today in Key West. And those bargains will be bought by someone at some price, and later someone like me will rue the day that he or she made the decision not to buy.

The Sun also Rises on Paradise Harbor

The Sun also Rises on Paradise Harbor

When meeting a potential home buyer for the first time I always ask the type of home the buyer is looking for including, size, location, number of bedrooms, degree of “doneness” so that I can help find the right type of home to fit the buyer. Many buyers answer “waterfront”. When I tell them Key West has only a few (as in very few!) waterfront or even water view homes, they reluctantly accept the fact that they may not get what they want. But there is a new opportunity for water view homes in Old Town.

Yesterday I wrote about 8 new single-family homes being built in a compound in the 1500 blocks of Petronia and Pine Streets. Just across the road another developer is constructing seven new single-family homes at Paradise Harbor, which is located at the Garrison Bight. The homes are located at 719 Eisenhower Drive and some have direct water views of the bight. Each home has a boat slip for easy ocean access. The homes range in price from $2,350,000 to $3,495,000.

The homes feature a huge master suite, over sized guest rooms, high ceilings, state of the art kitchen, spacious dining area, and a third floor library/game room. The yards feature a pool and foliage designed with water conservation in mind. Key West has never had a development like this within walking distance to Old Town. (Walk time to Duval Street is 15 minutes. Walk time to the historic seaport is 7 minutes.)

I can’t predict the future, but I am confident the sun will rise over the new homes at Paradise Harbor, and that the present price point on these homes is way undervalued. The houses are not inexpensive by any means. But when the Key West real estate market returns, the homes directly on the water will have appreciated more than just about any property in Key West. The other homes will increase in value, but not to the same degree in my estimation.

This is not my listing, but you can see more detailed information on it by clicking The Sun also Rises on Paradise Drive above. Better yet, please call me at 1-305-766-2642.

Something New under the Sun

Scarcity creates value. That's why I think real estate in Key West is such a great value--even at today's prices because you can't grow the island any bigger than it is. Or can you?

Key West enacted an amendment to the city charter to restrict growth by limiting height and density of construction and renovation. There has been a big legal battle over redevelopment of the Jabour Trailer Park into waterfront condominiums. A similar battle was waged over redevelopment of the Atlantic Shores Resort into high-end ocean front condominiums. That case went to the Circuit Court of Appeals that reversed a ruling of the Monroe County District Court that misinterpreted the city ordinance.

But any time somebody wants to build something to increase the present use of a big piece of property it is almost assured that someone else will get their nose out of joint and want to interfere in the process. Not being judgemental. Just stating the facts.

Over the next couple of weeks I am going to mention several new development projects in Key West that may appeal to a variety of potential buyers.

Today's entry are eight new Victorian homes situated in the Heart of the Meadows in the 1500 blocks of Petronia and Pine Street. The Meadows is located within easy walking distance to Duval (about a 15 minute walk.) Each home is different is size, design, and price. Prices range from $1,695,000 to $1,995,000. This is a secure and gated community with private carports & indigenous landscaping. Pascal Delisse Interior Designs has created stunning interior schemes and will provide endless custom options with early purchase. Features include vaulted ceilings, hardwood & travertine floors, chefs kitchen with custom cabinetry & granite counters, luxurious master suite, dramatic custom lighting, impact windows, breathtaking patios & porches and individual private pools. The neighborhood itself is getting quite a makeover. A separate waterfront development is going on across the street (Eisenhower Drive). And the home directly across the street to the north has just been completed renovated. That house takes up 1/2 the city block and will add value to all homes around it. That my friends is a given in real estate.

Click the tile above Something New under the Sun for more information on these homes.

Life in the Slow Lane

Life in the Slow Lane

That's what life is for most of us fortunate enough to live in Key West year around. But for those Key Westers who really live on a lane, life is more slow and much more quiet.

I am speaking of course of the 104 named lanes in Old Town Key West. In 1980 a Conch named C.W. (Billy) Pinder prepared a history of Key West lanes for the City Commission which he subtitled "A Bit of History, A lot of Dimension". He recited the name and location of each lane and suggested in his forwarding Memorandum that "the Police, Fire, Sewer and our department has expressed interest in this booklet" inferring that a lot of people in responsible positions did not know where some of the lanes were located. And to no wonder the reason why: several lanes have more than one name.

Here are but a few of the lanes for your edification: Billygoat Lane is also known as Hibuiscus Lane and the entrance is located next to 512 Grinnell Street. Carey Lane is also known as Thompson Alley (not to be confused with Thompson Lane -- there are two of those) and is located on Margaret Street near the sexton's office to the Key West Cemetery. Du Pont Lane is a dead end off the 500 block of Petronia near Duval and is also known as Titanic Court. Then there is Goat Alley also known as Carson's Lane. Of course is located on the north side of the cemetery and is now referred to as Angela Street. One of my favorites has always been Graveyard AlleyGruntbone Alley (also now known as Peacon Lane). We have a Love Lane, Passover Lane, Poorhouse Lane, Whalton Lane (not to be confused with Whalton Street--but people still get confused!), Wong Song Alley , and the two Thompson Lanes--one in Bahama Village and the other a mile away near the new Strunk Ace Hardware on Eaton Street.

Key West lanes are very special places. Most are dead end streets that are but one lane wide. Some lanes actually go for two blocks and a couple of those connect to through streets on both ends. But most are just dead ends. And that's what makes them special. You see tourists usually can't find them, motor scooter riders go too fast to see them, Conch train and trolley car drivers drive past because they can't drive in. So life goes on in these little islands within the island that is Key West.

When I am working with customers looking to find a dream home in Key West I extol the virtues of lane life.

The house to the right is a new renovation on Carey Lane. There are three houses on this lane with almost identical original facades and construction. The houses on either side were enlarged and pools added earlier. And this last house was completed in 2005. Totally redone, top to bottom and includes a separate guest cottage and sparkling pool. It's a 3 block walk to Duval and a 3 block walk to the seaport. So close, so far away. So quiet at night, and during the day.

Life in the Slow Lane, ain't it a drag.

Sunday Special

Sunday Special

Actually, you can buy this lovely totally renovated compound in Old Town for $1,849,000 any day of the week. But it is a very special house, and here's why:

Two of my friends from my former office are multi-million dollar agents year after year. During their time off from their busy real estate practice, they renovate homes for fun and profit. They design each property for a discerning buyer and oversee all of the construction to make sure the work is done to their standards. This home was their crown jewel in Key West.

This property at 709 Bakers Lane is just two blocks from Duval on Solares Hill--the highest point in Key West. The compound is actually two homes plus a guest cottage that is
hidden away just off Elizabeth Street.

Each building was thoughtfully renovated to provide separate living spaces for the owner and family or friends. The great room in the main house features two chandeliers from a historic Chicago theatre. The kitchen has all the bells and whistles one would expect. The second floor is devoted to the master bedroom and bath plus a second floor terrace overlooking the pool below.

The guest house features a living area, kitchen, and two bedrooms and two bathrooms. James Leo Herlihy wrote Midnight Cowboy in this house.

On the opposite side of the free form pool sits the guest cottage which has a butler's kitchen, huge bath, and laundry room.

The new pool and swim under waterfall are truly inviting. The balance of the courtyard is paved with Chicago brick and handsomely landscaped.

The house was originally designed and built to sell for $2.8 million. The real estate market took a nose dive and the owners decided to leave Key West for a variety of reasons. The home is now priced at a very reasonable price. The home is not for everyone because the main house has only the master suite for sleeping. But an individual or couple with no small children might find the two separate guest houses just the ticket.

There are two ROGO units on this property meaning that the owner could legally rent one or both homes as vacation rentals. (Lots of rules--not discussed here.) I did a quick comparison to similar properties managed by At Home in Key West and Rent Key West and I believe this home could be rented as a vacation rental during season for $12,000 to $14,000 per month.

I truly believe that now is the time to buy quality properties in Key West like this jewel, because most are underpriced and way undervalued. When the real estate market makes its next correction, this property will not be afforable by many who can afford it now. The spike in value will be appreciable.

This is not my listing, but I would love to show this property to you. Click the title above for more info on this property. And call me at 1-305-766-2642.

The Best Buy in Old Town

The Best Buy in Old Town!

912 Fleming is a really big house with a beautiful pool on a big lot on a great street with really expensive neighbors. And it is priced to sell.

Here's the skinny. The previous owner was a designer who renovated numerous properties in Key West for himself and clients for several years. He had purchased the house next door (at 916 Fleming)and was renovating it when he passed away early in 2006. His estate sold the project house for $1.5 million (the house was gutted and was basically a very expensive "shell"). That property is pictured to the right and shows how it looked in January 2006 and February 2007. It is almost finished.

The house at 912 Fleming is 3228 square feet on a 5650 square foot large--fairly large for Old Town. It has 4 licenses and the owner rented two apartments located at the front of the home and he lived in the rear--most of which was newly constructed by him during his renovation in 1997-98.

The home is perfectly liveable "as is", but a new homeowner may want to eliminate the rentals and expand the living space to the entire house. And here is why: the neighbors.

The house next door at 908 Fleming just sold for $3.6 million ($1,158 per square foot) and is undergoing a massive remodel. That house is huge and has a huge lot. And just next door to 908 another new house is being built. The house across the street at 911 Fleming is on the market for $4,675,000 or $1,509 per square foot. That house also is huge and has a huge lot. See the trend: big houses, big bucks being spent.

The estate of the former owner has reduced the price from the original asking price of $2.6 million to $1,990,000 or $616 per square foot. That's a no-brainer in my book. Perfectly liveable as is. Great block and ready to go.

Not my listing, but I can help you buy this bargain today. Call me 1-305-766-2642. Click the title above "The Best Buy in Old Town!" for more info and pics on 912 Fleming.

All About the Benjamins

All About the Benjamins
One of the current media trends is comparing similarly priced homes in different parts of the country. The February 2007 issue of Key West magazine compares a home at 416 Elizabeth priced at $3,9 million to a home in Santa Fe and a home at 800 Amelia priced at $2,395,000 to a home in Malibu priced at $2,4 million. HGTV has a weekly program that does the same. In each instance price comparisons help potential buyers pick the best buy for the buck. So, by extrapolation, home buying is All About the Benjamins.

I started today on the treadmill at the gym, which lead me to consider the present value of big homes in Key West in the current market. There are 31 homes priced at $3 million or more in the Old Town area of Key West. With a couple of glaring exceptions, most are reasonably priced to sell in the current Key West real estate market or about 115% over the target sales price. There were seven sales of single family homes priced above $3 million in Old Town since January 2006. There is clearly a bigger supply of big houses than there are buyers. And come to think of it, there are a bunch of homes priced just under $3 million like the El Encanto I wrote about on January 26th.

I think some of these big homes are bargains. Some are under priced because the real estate market in Key West is currently undervalued as compared to other parts of the world. Some sellers must sell their homes and have priced them to sell. That is different from sellers who may sell if they can get "their price".

Our market does not compare to Miami or Ft Lauderdale. I think our market compares to other world class destinations, at least the upper end does. Many Europeans have second homes in Key West. The Euro and the British Pound are far more valuable than the American dollar which makes a second home in Key West or any other destination resort more affordable for wealthy Europeans.

The homes to the right tell us a story about what is coming in Key West. The house under construction at the corner of Whalton and Johnson Streets in the Casa Marina area is a prime example. I don't know the owner or builder, or the estimated construction costs. The owner bought the lot in 2005 for $1,850,000 and the new home will surely cost somewhere around $1.5 - $2 million to construct.

The house across the street at the corner of Whalton and Casa Marina Court sold in July 2006 for $3.4 million. It was previously owned by author Philip Caputo and had seen better days. There is a construction crew there now doing what they do--rebuilding homes in paradise. This house has ocean views and immense grounds. I expect the new owner will be spending in excess of $1 million on updating this home.

Another big house is going up at the Grinnell and Johnson Streets. The house next door is priced at $3.5 million. The house across the street (also shown with magnificent palms) was put on the market a couple of months ago at $3.5 million and went under contract within two weeks.

These homes in the Casa Marina area are expensive by Key West standards, but may be under priced as compared to homes in other destination resorts. I think they are buying opportunities.