Thar "almost" Sold in them thar Solares Hill

In spite of all the doom and gloom about the depressed real estate market in Key West, there are occasional bright spots. We had one over the weekend. And another office had an equally pleasing weekend as well.

I have written a couple of blogs about listings at 612 Olivia priced at
$3.2 million and 616 Olivia priced at $2.1 million. A single buyer purchased both homes over the weekend and will close within the next two weeks. I mention this because it reinforces what I previously wrote about certain segments of the market continuing to be strong. The high end homes always do well if they are in the right location.

Another big house at 620 Eaton that was originally priced at $8.5 million and reduced to $4.5 million also went under contract. That property was way over-priced when it was originally listed. It did not go down in value. There is a difference.

Another home I wrote about at 1400 Whalton that was priced at $2,995,0000 went pending yesterday. Whoever is buying this home is getting a bargain. It was under-priced so that it would sell this season. It is one of the most beautiful homes that I have ever seen. Anywhere.


I see each of these properties as a positive sign for continued positive sales opportunities for well located quality homes. Now, if the rest of the market would follow.

If you are looking to purchase a home in Key West, please CLICK HERE to search the mls website for all current mls listings. Then please consider giving me a call to help you find your next home, vacation home, or commercial property in Paradise. 1-305-766-2642.

How to Sell your Home in Key West

"What is the SINGLE most important thing someone selling a house should when putting a property on the market, and why?" That is the question posed by Nancy Klinger, Editor of Solares Hill newspaper to various Realtors for possible inclusion in an upcoming column she is preparing.

My Response: Get an appraisal form a qualified professional appraiser and list your home at or below the appraised value. Then use the appraisal in your marketing to show that your list price is reasonable.

The Key West real estate market is volatile right now. Prices continue to drop daily because listing Realtors (or their customers) set asking prices that were too high. The inventory of unsold homes is at an all time high, and the selling season is coming to a screeching halt in a few weeks—in my opinion.

Some Realtors are famous for obtaining listings by charming sellers into believing they can sell their home in spite of the market downturn.
Once the house is exposed to the market and there are no buyers (or maybe not even any lookers) the agent then suggests that the asking price be lowered. And the property sits and sits and sits. The “For Sale” sign gathers dust.

My suggestion is based on years of professional experience in selling bank owned real estate. We had an appraisal on every single house or commercial property we owned. We did not just rely on the opinion of the Realtors we used to sell the property. That would be foolhardy no matter how knowledable the Realtor may be because he has a vested interest in getting the listing and achieving the sale. Banks need an independent opinion of value that is not clouded by the potential of individual gain.

Even appraisers are having a difficult time arriving at opinions of value today, because they use past sales as indicia of what the current value is. But in a market of declining values (and that is generally what we are experiencing in Key West), the appraiser’s job is especially difficult.

Banks are required to follow federal banking regulations on how they treat assets acquired through foreclosure. If the asset value cannot be justified by appraisal, the asset must be written down to a verifiable amount. The balance must be charged off. So the bank takes a financial hit. But it is this process that keeps the banks from trying to obtain a “wish price” for property owned through foreclosure.

I suggest that homeowners adopt the same approach in pricing their homes for sale. With the appraisal in hand, the listing Realtor should then list the house at the appraised price and use the appraisal in marketing the property.

When you go to SEARS to buy a TV you may see several brands with various options at different prices. You can choose the TV you want to buy based on price or other criteria. But you know the listed price is the price you must pay, because you cannot negotiate with SEARS on price.

My theory is that when a potential buyer knows that the asking price is based on an independent appraisal that the seller gains real marketing advantage. The buyer can’t discount the negative items affecting the property such as age, condition, location, etc. because the appraisal already took each item into consideration during the appraisal process. The price thus becomes “objective” rather than “subjective”. And I think that makes selling a home in a difficult market much easier.

A short case in point: Last year I got a listing next to a large school parking lot exit on a busy street in Key West. The house had sustained some flooding during Hurricane Wilma. And there were three similarly sized houses for sale across the street. The seller was the sister of the deceased former owner. She lives a thousand miles away. She had to get a home equity loan on her own home to continue making mortgage payments and pay other expenses on the Key West property. Another Realtor told her she could ask for substantially more than my approach. I showed her mathematically the cost of ownership on a monthly basis, and she saw how much holding out for a “wish price” could potentially cost her. She accepted my approach. I got the listing, and we closed the deal 53 days after listing at 98.91% of asking price.

By using the appraisal as part of my marketing strategy I was able to get the seller to accept listing the property at a realistic price. The seller was disobliged of questioning whether she could have sold for more money. And I was also able deflect potential buyers’ criticism by showing that all the property’s negative attributes were already taken into consideration in pricing the property.

This approach works. Banks use it all the time. It takes the drama out of selling your home. It treats the process as a business deal.

If you are thinking of listing your home or business for sale in Key West, think about contacting me. You may not know my name, but now you know my game. And it works. Call Gary Thomas 305-766-2642.

Less Is More

Ludwig Mies van der Rohe famously said, "Less is more." And when I decided to write about a little house on Elizabeth Street, that phrase came through so loud and clear.

The house at 514 Elizabeth hasn't changed much since it was built in 1922--according to county records (which are notoriously incorrect!). It's facade certainly hasn't changed since I sold it ten years ago as a second home to a couple from New York. Yesterday I happened to see the owner trimming the shrubs by the front porch. We talked for a bit and he invited me in to see the pool that they added to the property.

I had forgotten how utterly charming this little 1 1/2 story home is. As I walked inside I was immediately transported to another time when material honesty and structural integrity were more important than marble, granite, faux finishes, designer cabinets, stainless steel appliances, name brand this and that. The simplicity of design and the materials used was breathtaking.

The floors are painted, not stained. The windows, doors, doorknobs, hinges and other architectural relics are from an era gone by long ago. The rooms are small but not tiny. They serve their intended purpose. The bedroom on the second floor still has its scuttle, a small hatch with a movable lid in the roof that permits the warm air to rise to the outside. There are two additions to the house. The kitchen and living room were additions built by the previous owner a little over 10 years ago. And the current owners built a small cottage next to the new pool and deck. There is also a small terrace below the deck that is dwarfed by the majestic trees from Nancy's Secret Garden located next door.

Many potential buyers look at homes as projects to tackle and rebuild. If every owner had messed with the house at 514 Elizabeth Street, it would not be the quiet little charmer it is today. Sometimes it is better off to leave things alone.

I personally don't think all houses need granite counter tops, marble baths, or odd looking bowls that sit on a cabinet that are to be used as a sink where you shave and brush your teeth. This house certainly does not. It would look ridiculous and totally out of character.

There are some splendid little houses like the one at 514 Elizabeth Street looking for new owners. If you are looking for such a house, please give me a call at 1-305-776-2642. Or CLICK HERE to search all of the Key West mls listings.

709 Bakers Lane is a Bargain

I have mentioned several times that I used to do commercial loan workouts for commercial banks in Denver. The Denver economy went bust in the late 1970's and both the housing market and commercial real estate market took a steep nosedive. I never knew a good economy until I moved to Key West. I mistakenly thought we were immune from the economic pressures of the rest of the world because of our isolation and the scarcity of real property.

Two months ago I wrote about a great property at 709 Bakers Lane that I thought was a great buy then. CLICK HERE to read that blog. The house was originally designed and renovated to sell for $2.8 million. The owners are Realtors and have done several successful projects in Key West. They relocated to Ft. Lauderdale and the three building compound was just reduced to $1,749,000. The three buildings total 2300 square feet on a 5700 square foot lot in the heart of Old Town and at one of the highest points on the island. The property is surrounded by expensive homes, but is an enclave to itself. It is within walking distance to everything Key West has to offer, but it is secluded from the hubbub of our busy little city. The asking price equates to $760 per square foot.

CLICK HERE for more details and photos of this property that I think is a bargain. This property is not for every buyer. It is unique, even by Key West standards.

CLICK HEREto find your own good property in Key West's mls database. And then call me for more information. 1-8777-778-7092.

Holy Flipper Batman

A few weeks ago I wrote a blog about the new Santa Maria Condominiums. CLICK HERE to read that blog. I wasn't impressed. I think the project has many flaws and the units are overpriced. I abhor the architecture of the new building. And I think the 40% managemtn fee for condo owners is ridiculous! But that is not the point of today's post.

A top story in today's Key West Citizen discusses a lawsuit filed by seven disgruntled buyers who purchased units at the project prior to or during construction and who now claim the were defrauded by the developer, the real estate company, and three realtors who marketed the project. CLICK HERE to read the article.

"The plaintiffs were assured by the defendants that once the building was under construction, prices would increase dramatically as they were contracting at a bargain price, therefore there would be no issue with the plaintiffs being able to resell their investment contracts to somebody else at a profit," the lawsuit says.

But later in the complaint plaintiffs admit "Plaintiffs ... did not carefully read the agreements, did not get professional advice regarding the agreements and ignored the language and disclaimers in the agreements as they were assured they would never have to close as their contracts would be resold at a higher dollar amount prior to closing."

If we could all only sue someone else for our greed and stupidity. I do not know the facts of their individual cases, but I did get to experience a sales presentation with a customer who was interested in the project. I listened intently as the rep went through the litany of all the things that were promised, but I also heard him say all the things that would cover his backside if things went south. My customer heard only the good stuff, and wanted to buy. He didn't have any money, however, and wanted to borrow the hefty down payment. Seller wasn't in the business of financing down payments so the deal did not get made. My guy didn't have a nickle, but he wanted to participate in the buying frenzy that was going on in late December 2004.

Two and a half years later the would be flippers who did have the money are having to pay up and close on their contracts, or lose their hefty earnest money deposits. I personally know many locals who bought into various projects or existing properties thinking they would hold them and later flip them for a profit. And many of those folk are in deep trouble today. Many.

I personally think now is a good time to buy because prices have taken a major correction downward. That doesn't mean they are going lower. I can't predict the future. But I do think there are some real buying opportunities in Key West. I know that there are several "big deals" in the works. And smart buyers are snapping up good properties. Good is always like gold. Gold may go up and down with the market, but gold will always be gold. And good properties will always be good properties.

CLICK HERE to find your own good property in Key West's mls database. And then call me for more information. 1-877-778-7092.

The Boomer Century

“The Boomer Century: 1946-2046” is a two-hour documentary that looks to the baby boomers’ past for clues to how this generation of 78 million Americans will shape the future. The program focuses on the boomers’ formative years to reveal the personality traits of a generation that has since rewritten the rules for work, marriage and parenthood, and is now redefining retirement and aging.


The Boomer Century is currently airing on PBS stations across the country. I have watched it twice, since it is all about me. Well, me and millions of other baby boomers. I was born on January 1, 1947 so I started the whole damned thing. If you are a boomer, you owe it to yourself to spend two hours to see how we got to where we are today.

Ten Interesting Facts about Boomers:
1. The number of baby boomers in America is estimated at 78.2 million.
2. Approximately 7,918 Americans turn 60 each day. That’s about 330 every hour or more than four million a year in 2006.
3. Within 20 years, the age profile of America will match that of Florida – about one in five Americans will be older than 65.
4. Boomers who reach age 65 in 2011 can expect to live, on average, at least another 18 years.
5. Four out of 10 boomers have less than $10,000 in retirement savings.
6. One-third of boomer households today have at least $100,00 in investable assets.
7. About one-third of baby boomers think they will have enough money to live comfortably once they retire.
8. Four out of five boomers intend to keep working and earning in retirement. Half of boomers plan to launch into an entirely new job or career in retirement.
9. Only one in seven baby boomers say they plan to collect Social Security benefits at age 62.
10. The unpredictable cost of illness and healthcare is by far boomers' biggest fear. They are three times more worried about a major illness (48%), their ability to pay for healthcare (53%) or winding up in a nursing home (48%), than about dying (17%).

Most of my clients have been or are boomers. They still consider themselves young, but are usually looking for a second home or investment property that they can eventually retire to a few years down the line. If you are considering such an investment, whether you are a boomer or not, you can CLICK HERE to search all current mls listing in the lower Florida Keys. Then consider calling me at 1-305-766-2642 for further information.

April Fool's Day Open House

I'm not fooling, I'm working today. Hosting an Open House at the Sea Isle Townhomes on Windsor Lane. Come see me between 11:300 to 2:00 this afternoon.

By the way, that's not me in the photo. He is sitting in front of Fast Buck Freddie's, I think. It's a Key West variation on "I'll work for food." Who wants to work when you can live off tourists...

New & Affordable Casa Marina Estates

There is a group of nine brand new 2 1/2 story townhomes nearing completion named the Casa Marina Estates, and 811 Washington Street #103 is the only one available for sale. This 1876 sq.ft. home is located at the east end of the development and has bright sunny views from the south, east, and north.

The homes look like a traditional Key West two story conch home complete with first and second floor front and rear porches. The main floor has nine foot ceilings and has a custom kitchen with Viking appliances and granite countertops. French doors open from the living area onto the rear deck and the swiming pool and garden. There are two full bedrooms on the second level and the entire third floor is another bedroom and full bath.

The front and rear of the home is completely landscaped and has paved off-street parking. 811 Washington #103 is affordably priced at $1,700,000.

The Casa Marina Estates are located just 3 blocks from the Casa Marina Hotel and its beautiful private beach. Key West residents have been able to join the beach club to have access to the beach and spa facilities at the hotel. But the public beach is located just east of the hotel and it is absolutely free. The Casa Marina area is undergoing a tremendous rebirth and property values are destined to rise once the various projects in place near completion.

CLICK HERE to see all current mls listings in the Key West and lower Florida Keys. And then please consider calling me to provide further information. 1-305-766-2642.

Atlantic Shores to be No More this Summer

Atlantic Shores to be no more this summer That was the title in the March 25th edition of the Citizen. End of an Era. Another part of Key West is giving way to big development. CLICK HERE to read the full story in The Key West Citizen.

On my virgin trip to Key West learned much of the folk lore about this tiny town. I remember learning about tea dance at La Te Da followed by tea by the sea at Atlantic Shores. I didn't drink tea. I was from Colorado where we didn't drink tea. So I had no idea what the fuss was about. Twenty-three years ago it was about hundreds of gyrating bodies dancing (mostly gay men) on the deck and pier at Atlantic Shores with music so loud that it could be heard for blocks and blocks. Dancing under the stars and on top of the water. Wow!

Then I learned that Atlantic Shores was a daytime hangout as well. There is a huge (unheated) pool surrounded by concrete and wood decks, the tiki bar, the cook shack, and the infamous pier. And there are the hotel guests, tourists, and locals that worship the sun in various degrees of undress. Most people wear bathing suits, but clothing is optional. For some it ought to be required.

I've seen lots of unforgettable spectacles there. So many fond memories such as laying out almost all day on Christmas Day a few years back. The temperature was near 80 as I remember. And the weather up north was frightful, and that was so delightful.

The photo to the right shows just a portion of the property--mainly the pool and deck area. The attraction for the developer is the ocean front location. Just to the right is the Reach Resort and the Casa Marina Resort is to its right. Both are undergoing massive renovations. The Santa Maria Condominiums are just above the Reach Resort and share that resorts amenities.

The other photo shows some prop set up for Fantasy Fest in 2005. It got blown away along with the deck during Hurricane Wilma. They never really put the shores back together after that.

But the Shores is coming down. Never more, never more.

If you want to buy a home or business in Key West, please CLICK HERE to checkout all current mls listings. And then consider giving me a call to help you find your home or business in Paradise 1-877-778-7092.

HARC

When tourists walk or drive around Key West and see a big old house like the one to the right they often think they could buy it and fix it up. Yesterday I discussed the cost of renovation. One of the hidden costs is governmental compliance. And with houses in Old Town, that is cost that affects just about everybody because the entire Old Town area has been declared a National Historic Landmark.

The primary government body that oversees the renovation of old properties and the construction of new properties is called HARC (Historic Architectural Review Commission). CLICK HERE to read the HARC Rules (Adobe Format). The commission is made up of Key West citizens and a local architect. They review all building permit requests for structures in the historic area. Not every structure is covered, but most are. And is this group of citizens that decide the proposed change or new structure complies with the HARC guidelines.

A smart homeowner will hire a good architect to design a structure that meets the guidelines in the first place. But the architect must then sheperd the proposal through HARC and the building department to get building permits issued. Sounds reasonable enough. But it isn't easy. At a recent HARC meeting one of the new commissioner's stated that the HARC guidelines are the commission's bible and that adherence is mandatory. That is the rub.

Rules are rules because we need a fair and understandable system of dealing with issues in how structures are to be remodeled. But it is the interpretation of those rules that can make construction costs rise. Each meeting an architect must attend and each revision of a plan costs money. And repeated changes repeatedly cost more money.

Most of Old Town Key West was built before there were any building codes. And there are many buildings in Old Town that encroach is some way upon a neighbor's property. It is this haphazard construction that HARC seeks to protect with the enforcement of the HARC Guidelines. I don't know if anyone has ever challenged the legality of the City passing this responsibility off to a non-elected board. (Meaning I think the commission may be an unconstitutional body and may be acting without legal authority. While I am an attorney, I am not licenses in Florida so my thoughts don't matter.)

HARC is not going to go away. Potential buyers must assume that they will have to go through the process of getting HARC approval on any project in the Old Town area. Just don't assume that because you are going to improve an existing building that you will get instant approval. This is Key West, you know.

If after reading that you are still considering buying a property in Key West, please CLICK HERE to checkout the entire mls database of current real estate listings and please consider giving me a call 1-305-766-2642 to help you find your next home or business in Paradise.