Casa Marina Redux

I wrote a blog in February comparing prices on some large homes in the Casa Marina Area . CLICK HERE My faith in my perception amazes even me sometimes.

Yesterday one of the houses I mentioned in that blog, the one previously owned by author Philip Caputo, was just listed for sale at the offering price of $5.75 million--CLICK HERE for more details. You will recall that the present owner purchased this home in July 2006 for the price of $3.4 miilion. The new price is $5.75 million. The house has been undergoing a major renovation of the buildings and grounds including cosmetic, structural and landscaping. The home has 5748 square feet of living space according to the official tax records. So the house is priced at $1,000.35 per square foot. The house occupies one-half of a large city block just a short distance from the Atlantic Ocean. I went by the property again this morning. It looks just beautiful. And for that price it should.

The listing broker made this comment about the house in the mls "This magnificent property brings Palm Beach to Key West." It does. This house is not a typical Key West "conch house". It is anything but. It is grand and magnificent. And I think the price is a steel.

But if you are looking for a home that is a tad bit more affordable, please CLICK HERE to use our mls search feature to see all current homes and condos for sale in the Key West area. And if you find something that really interests you, please give me a call for more information. 1-305-766-2642.














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Harpoon Harry's--On the Waterfront

Harpoon Harry's is to be Auctioned on March 31st.

One way to sell real estate is to auction it. In some auctions, the seller places a "reserved price" or a price below which he will not sell. Other auctions are absolute, meaning the seller will sell to the highest bidder without reservation.

There are two things that make this particular auction interesting to me. First, the property has an excellent location and an excellent reputation. All kidding aside about the flood pic above showing the property right after Hurricane Wilma, the property is located right at the foot of the historic Key West Seaport. Turtle Krals and The Half-Shell Raw Bar are located just across the street and really on the waterfront. The entire waterfront area is undergoing a massive renovation. CLICK HERE to see my post regarding the Harbor House Condominiums just one block to the west. So I view this property as a Prime Real Estate Investment. CLICK HERE for full auction details.

Second, the seller is not only attempting to sell the restaurant, but also 4 beautiful new single family homes located in the Bahama Village area of Key West. The houses are on Terry Lane and have views of the Key West Lighthouse. I think they were priced too high per square foot and that the price has deterred price conscious buyers.

So it will be interesting to see how the auction goes.

Is the glass half full or half empty?

I had two conversations last Friday regarding Key West's current real estate market. One was positive and the other negative. I thought I would share those perspectives with you.

Bob Cardenas is a realtor with a company that sells many of the homes on Sunset Key including this one CLICK HERE. That is the island just west of Mallory Square where the nightly sunset celebration occurs in Key West. Most of the homes there are priced in excess of $2 million. And Bob usually represents the buy or seller of every property out there. He was the realtor who sold the $5.8 million home referenced above.

He said his buyers held back a bit last year thinking that the market would take a dip and that they would then buy at a lower price. They got it wrong, he said. Bob said his niche market has actually increased since last year. Bob mentioned that he had just put another doozy under contract that day. CLICK HERE to see the house that is under contract for very close to the asking price. Bob wasn't boasting about the sale and said his activity has been very brisk all season. I pointed out that his niche market is different from the rest of Key West. He agreed to some extent, but he said he felt too many Realtors are bemoaning the current market and that the negative comments abut the market are helping to keep it down.

Bob said if Key West gets through the summer hurricane season without any serious storms that he thinks the market will vigorously rebound this coming fall. Let's hope he is right.

That same day I talked with a local real estate investor who owns about 20 properties (mostly single family homes) in Key West--most of which are listed for sale at ridiculously high prices. He owns most of the properties in partnership with other investors. And he acquired most of the properties over the past four years or so--at the height of the Key West real estate boom.

Surprisingly none of his properties has sold during the past 18 months. One of his houses is a single family that he has not made a mortgage payment on since Hurricane Wilma (October 2005). The house is rented so he is getting income from the property, but he is not servicing the debt. He said he called the out of state lender and asked to speak to someone about a workout. He said the lender told him not to worry, that the lender was not going to foreclose. The lender offered to restructure the loan and add all arrearages to the loan which could be paid in a lump sum when the house sells.

That reminded me of two similar situations that I had heard of. Another investor bought two different properties. One was a single family home in Old Town and financed it through one of the national lenders that does lots of television advertising. When his world turned upside down, he tried to do a workout with the lender. Impossible. The company is so big, they lost him in the mix. He hasn't made a payment in over a year. And the lender still has not started to foreclose.

He also bought a commercial development project which he proceeded to royally mess up. (I could use more colorful language on this deal!) He had a first mortgage on part of the property from a national bank and a first mortgage on another part of the property from the prior owner (purchase money mortgage on a part of the project, but not all). He had some retained un-mortgaged interest in an additional parcel that was integral to the entire development. The banker responsible for the project has continued to fund interest payments out of the loan reserve established to pay construction costs. So the lender has avoided declaring the loan in default. Then the purchase money lender foreclosed it's mortgage on its collateral. The borrower walked away, but the property is a mess.

Getting money to buy property is Key West has never been difficult. Maybe it was too easy. And I think maybe too many lenders have yet to recognize the extent of the mess that is out there. I used to do commercial loan workouts and I know how bankers operate. They are great at making loans and terrible at collecting them.

I guess the answer to the question posed in the title to today's blog depends on who you talk to. If you are an optimist like Bob the realtor, you see good things heading your way. And if you are like the real estate investor who can't sell his over-priced homes or if you are like the banker who refuses to acknowledge an impending loss, the end is near.

As for me, I think this is a buying opportunity. CLICK HERE to preview all current MLS Listings in the Lower Florida Keys.

Casa Marina Residences

I have mentioned the Casa Marina area several times in my blog. It is the neighborhood near the historic Casa Marina Hotel. Many of the homes in the area were built post World War II, but there are several large old homes that are over a hundred years old as well. The streets are wider and less busy than Old Town. Some of the streets have paved sidewalks and others do not. The building lots are generally much larger than most of the lots in Old Town. There seems to be a greater variety and more trees than Old Town as well. And there certainly are not as many businesses or tourists.

Casa Marina Residences is a new and ultra-exclusive intimate enclave of only 12 new luxury villas nestled between the Atlantic Ocean and Casa Marina Resort & Beach Club. Each of the 3 bedroom 3 bath home will enjoy luxury amenities including individual elevators, private plunge pools, garden patio, spacious balconies, covered parking & wired for state of the art technology. Owners will enjoy a state of the art fitness club, tranquil destination spa, tennis, private beach access, tropical pools, onsite water sports & multiple dining opportunities. Water front units available ranging from $2.5 million - $3.5 million. (Pre-Construction Prices.) CLICK HERE for information and photos of the new ocean front development.

I think this development will be just right for a second home owner who wants all the comfort of living in an exclusive resort type atmosphere with amenities galore but also with the privacy of individual home ownership. Only four units have been released for pre-sales. Look for the prices to escalate as construction continues. This will be a winner. Mark my words. Call me at 1-305-766-2642 for more information.

HARBOR HOUSE -- KEY WEST

There was a coming out party last night at the San Carlos Theatre. The elite of Key West turned out for the event which featured a private concert by Cuban jazz legend Arturo Sandoval. But the real star of the evening was the unveiling of the plans for the much awaited Harbor House--the newest incarnation of the previously troubled Watermark Project.

Harbor House is a new development of 32 three story private residences located at the historic Key West Seaport. Each unit is over 2000 square feet and has every amenity you would expect. The exteriors are graced by two-story porches both in front and back, with features characteristic of past historic homes of Old Key West. The interiors are classic spaces with period-inspired design elements such as viewing towers and Queen Anne turrets that add authentic flavor. There are 12 floor plans to choose from along with premium options. The units are priced between $1,965,000 to $3,120,000 depending upon size and location. CLICK HERE for a down loadable/printable brochure.

Harbor House is to be located on the site of the old Jabour Trailer Park. It is about a three block walk to the STEAM PLANT CONDOS currently being constructed at the foot of Caroline and Grinnell Streets--also at the easternmost edge of the historic seaport.

Apples and Oranges

I just received my April 2007 issue of Architectural Digest. On Page 140 of my issue (South Florida) there is a picture of a current listing of a Key West water view home priced at $5.995 million. The house was featured in AD in October 2001.

I mention this property because it is referenced in a paid advertising section disguised as an "Editorial Feature" of fine estates around the world. Realtors pay a fee to show their listings in this section. Nothing wrong with it. But the way it is presented is misleading in my opinion.

Other fine homes and estates are similarly featured each month. So the reader can do some comparison shopping in various price ranges around the globe. Other magazines have similar features and I think it is very interesting to compare what you can buck can buy in Key West as opposed to some other destination.

I will bet you dollars to donuts that you could almost buy an entire town in some area of Alabama for $5.995 million. But then who would want that? You may be able to buy tony townhouse in Manhattan for the price, but the price you pay to live in Manhattan is more dear considering all the people and all the pressure.

CLICK HERE to see a similarly priced home in Palm Springs, California. And CLICH HERE to see the Key West home in the current issue of Architectural Digest. Or CLICK HERE to do your own search of all Key West homes.

For the life of me I can't imagine why anyone would want to live in Manhattan, Alabama, of the desert. But I can give you tons of reasons why you should consider living in Key West.

One final point of note: something is going on in town. All of a sudden there is a flourish of real estate activity in Key West. There are 24 days left of prime selling time before the serious buyers go away until next season. The number of price reductions on existing listings has picked up. Sellers are getting serious about setting rational asking prices. And some buyers are responding by writing contracts. Properties in all price ranges are going under contract each day. The number of of listings still exceeds the demand, but the good news is that some properties are starting to sell.

Gorilla My Dream

Remember the Connie Frances movie Where the Boys Are? They are in Key West this month for Spring Break. Town is divided into four distinct categories: typical tourists that take up lots of space on sidewalks, people with money who tend to hang together, the breakers, and the locals --we tend to avoid Duval and all other tourist places like the plague (there so many people here right now!!!).

Our weather is so fair that the breakers have to dress for the beach all the time: meaning they hardly dress at all. If you are a father or mother with a son or daughter in Key West rest assured that your kid will return home with an all over tan. Without exception!

Tyler who works the morning shift at my gym arrived at work this morning at 6:00 AM. He just got off his other real job at one of the Duval Street bars. He said the breakers were fairly nice last night. He didn't have to 86 anybody. But, he said, they didn't leave until closing time which is 4:00 AM.

So you can see why I included the pics above. The breakers memories of Key West may be somewhat flawed. But they will surely recall that they had a great time.

Affordable Housing--in Key West. Are you kidding?

Key West is going to hold semi-annual elections later this year for City Commission and Mayor. The candidates are already calling for More Affordable Housing. The problem isn't getting politicians to agree on meeting the demand for affordable housing, but rather deciding on where to build it and how to pay for it.

Construction costs and land costs in Key West are so high and and building code and building restrictions so onerous that the construction of new affordable housing has become nearly impossible. When the city built the new Roosevelt Annex a few years back, it took longer and cost more to build than it should have. Pritim Singh developed an adjacent parcel within half of the time. (Singh developed the Truman Annex and other very successful projects throughout the Keys.)

One of the current topics on the county government level is for the school system to provide affordable housing for new teachers. And there are stories of doctors leaving town because they cannot afford to own a home here either. In fact, those are not stories. They are real life statements.

Key West is not alone in needing to find a solution to its housing dilemma. CLICK HERE to read an article on Affordable Housing For The Upper Middle Class presented in Matrix.

I have an idea for a quick and affordable partial solution to the affordable housing crunch: buy this 5 unit building at 1110 Eaton Street in Key West. It is listed by our office at the affordable price of $997,000. There are three studio units on the main floor and two studios with loft bedrooms on the second and third floors. Four of the five units have been remodeled. And there are three off-street parking spaces.
These units should rent for $1100 per month or more in today's market. Please call me toll free 1-877-778-7092 for more information on this great little housing opportunity or CLICK HERE.

Buy KEY WEST Real Estate in Your IRA

I learned a couple of years ago that you can use your IRA to purchase real estate investments. There is an article you can read on line by KELLI L. CLICK entitled Buy Real Estate in Your IRA. CLICK HERE to read the ARTICLE. Or do as I did and do a GOOGLE search to search for additional articles that explain the process.

I view the process as being somewhat akin to the IRS Section 1031 rules. There are specific rules regarding how the property must be acquired, held, financed, etc. If you follow the rules, you get to use your IRA to potentially make a huge investment gain in today's fumbling real estate market.

Today is March 13th and the website BEST MORTGE RATE is quoting 30 year fixed mortgages at 5.375%. That rate is not for a non-recourse loan such as would be required to purchase real estate for your IRA. But the rate is indicative of the current low market rates that should be encouraging real estate investment.

There are many properties in Key West that may qualify for a self directed IRA real estate investment. Do your own search of the current inventory of properties by CLICKING HERE

If you see something you like, please call me at 1.877.778.7092 for more information.

Coulda, Shoulda, Woulda!

I Could Have. I Should Have. I Wish I Would Have!

Everybody has to have made a comment like that. But lots of folks make those comments all the time when they talk about buying property in Key West. Me included.

A couple of weeks ago some former customers who make at least one annual trek to Key West visited me at an Open House I was hosting at the Sea Isla Townhomes. They live in Connecticut and have four children that are matriculating through college. Their goal has been to get the kids through school, sell an investment property that they own in Connecticut and buy a second home in Key West.

About six years ago we looked at two adjacent houses in the 1000 block of Fleming Street. (One of the best blocks in town.) The houses had been hideously and cheaply redone a few years earlier, and needed some revamping. Her father had been a builder, so she was familiar with construction and saw the potential in the location and the properties in particular. But the money issues prevented them from investing in the project. Somebody else bought the properties and did an "over-the-top" redesign of the property. CLICK HERE to see what the property looks like today. It is offered at $4,395,000. In 2001 it sold for $660,000. The present owner did not put $3.8 million into improvements. But he did create real value by designing a very special property.

Not all stories play out like this one. Most people have fairly simple goals. They lay in a hammock on their guest house porch and dream about what it would be like to own a home or business in Key West. They may even go talk with a Realtor and pretend they intend to buy a house. They may even go so far as to write an offer to buy a house. But so many potential buyers find a reason to not do the deal.

Three years ago houses were selling like hot cakes in Key West. The demand was insatiable. Today, it is the exact reverse. Prices are down. Demand is down even more. I am even thinking of buying another property because I know that if I don't, some day I will say I Coulda, Shoulda,Woulda!

It's official: Now's the time to buy

CLICK HERE to read the full text of a just released study from the University of Florida advising hopeful homebuyers in Florida should act now: The price is right as the state’s single-family residential housing market bottoms out, according to a University of Florida study released March 9th.