Please won't you be my neighbor?

Please won't you be my neighbor? That's the last line of the Won't You Be My Neighbor, Mr. Roger's theme song. The first line goes "It's a beautiful day in this neighborhood" and that makes me think of why I love Key West so much: it's neighborhoods.

Tourists come and go and most only see Old Town or areas visited by the Conch Train or perhaps a sojurn to the Overseas Market or Searstown. I know that when I am taking prospective buyers around looking at houses many often ask about where we buy groceries or clothes or lumber. Some just see Old Town as the center of the tiny universe that is Key West and wonder how we manage to live here. And many dream of being able to live here.

I have previously mentioned that I live in the Casa Marina area which is located onthe Atlantic Ocean side of the island. Old Town is located at the west and north side of the island. Then there is mid town located, naturally, midway between Old Town and New Town at the east end of the island. But each of these areas has its own separate neighborhoods. And that makes life here so interesting.

Take the area at the intersection of Southard and Grinnell Streets where the Five Brothers Grocery is located. Five Brothers is an institution where locals go every morning for coffee con leche and gossip. It's like Starbucks without the attitude. You will see cops and lawyers and contractors and city government workers hanging out on the street corner in the shade dishing the dish on everything Key West. Contractors meet to talk about what they are doing and where. And Key West politics is alaways the dish du jour. That little building is the anchor of that couple of block section of Key West.

A few blocks away on a not so nice location is the Blossom's Grocery. There you buyer the daily special which is advertised for everyone to see on a sign posted out front--just next to the chicken crossing sign. The area has several gay guesthouses and many apartments. The Sunbeam Grocery is located exactly one block to the south. And it has a totally different clientel and distinctly unfriendly vibe--in my opinion.

These neighborhood groceries harken back to the era before big supermarkets where locals would buy there food supplies at the corner grocery. And like I mentioned earlier, those grocery stores are the anchor for that neighborhood.

But there are other neighborhood hangouts as well. Take Page's Paint on upper White Street. If you spend 30 minutes in the store you will get a good idea about how busy the construction business is by listening to the painters buying paint and the guys in the store telling stories. Paulie, a 60-something Conch who is a paint mixologist, will give you a quick lesson in Key West history at the drop of the hat. I was there yesterday and learned about a city sewer project being constructed on Duncan Street and how much two houses recently sold for. (I previously wrote about everybody in Key West knowing everything about each other's property values.)

You may see people in a store, on a bike, walking their dog, driving in their car talking on a cellphone on a daily basis. You may not know their name, but you know their face. And you know they are your neighbors. You learn not to be rude or pushy, if you ever were either, when dealing with your neighbor. We all live on a tiny little island in the middle of the ocean. And it is a great place to live. Please won't you be my neighbor?

If you are thinking about buying a place in Key West, now is an excellent time to start looking. Prices have dropped, there is a good selection of properties in all price ranges. The remodeling business has slowed, so you may be able to engage a contractor at a better price as well. Give me a call and I can help you find your little piece of Paradise. 1-305-766-2642. Thanks.

CLICK HERE to search all active Key West and Lower Florida Keys mls listings in real time. Then give me a call.

P.S. make sure you have your POP-UP Blocker unlocked so you can see full size photos and all of the mls listings.

1009 Southard Street--Such a Deal!

The grand two and a half story home at 1009 Southard Street is another bargain looking for a new owner. The 3719 square foot home sits on one of the great streets in Key West. Just a few doors to the east is the big house that sold last year for $5.5 million. And across the street is the home of the former Vice Chairman of AOL Time Warner. (It was featured in a huge Architectural Digest piece a few years ago.) White House Chief of Staff Joshua Bolten owns the house next door to the west. All in all it's a pretty good neighborhood.

The house is presently configured as a 3 unit building with a studio apartment downstairs in the front, a two bed two bath apartment on the second and third floor, and the owners quarters are at the rear of the main level. The tenants have their own private pool, but the large pool at the rear is the domain of the owners. And the owner's guests have their own cottage accessed off Lowes Lane. Oh, and there is also a garage.

The house is in very good condition as it sits. The kitchen and bath in the owner's quarters are about 15 to 20 years old. But they are perfectly liveable as is. A new owner may want to restore the house to a single family residence. There is plenty of room to do whatever suits your fancy. This property was originally priced at $1,950,000 when it was put on the market just before last Thanksgiving. The owners want to downsize and have found a replacement home in Old Town that suits there present day needs. They have just reduced the asking price to $1,595,000. And the price at $428 per square foot is a bargain. But I believe the sellers are very motivated to sell, so I would strongly encourage potential buyers to make a strong, all cash, no contingencies offer. This is a deal in the making.

CLICK HERE to see more photos and read more about this great Old Town home. And then please give me a call to see it. I think you will be surprised at how wonderful a property this is. My number is 1-305-766-2642.

Market Timing

Were you in the stock market on 9/11? Do you remember what happened to the stock market when it reopened after 9/11? I do. It tanked!

I had a bunch of stock in various good companies like Pfizer, Citicorp, and Microsoft. I had several shares of Berkshire Hathaway that I bought in 1995 that had more than tripled in value. I bought a bunch of stock on margin in a variety of good companies. But all of the stocks tumbled after 9/11. And I got several margin calls. I had the cash to avoid having to sell. But it hurt. A couple of years later the market dipped again and this time I had to sell one share of Berkshire Hathaway for $85,000 if I remember correctly. Then it went down again to $80,000 per share. I got really nervous and told my broker I wanted to sell all of it when the price returned to $85,000 and asked him to call me beforehand. It came right back up; he did not call, the stock got sold and my margin account went away. I had money in the bank.

I did not complain. I was tired of nervous nights wondering what would happen next. I had experienced 10 years of ups and downs in the stock market with "profit taking" by market insiders at the expense of everyday investors such as myself. I did not day trade. When I bought a stock I bought quality and looked for long term appreciation. I made a bunch of money during the 1995 to 2000 period. But 9/11 changed all of that. The four years after 9/11 were not fun at all. I just looked up the last quote on Berkshire Hathaway: $111,600 per share. CLICK HERE. The 52 week high was $114,500 or $29,500 more per share than the price I sold mine.

My shortsightedness got the best of me, I think. I knew that Berkshire Hathaway was a great company. That's why I bought it. I did not have to think. Warren Buffet would think and act for me. My problem was one of my own creation. I bought other stocks using the capital from Berkshire. The other stocks tumbled and did not recover. (Microsoft went from $120 a share to $25. I had 10,000 shares. I bought it at different prices but the loss was very damaging.)

So how does my tale of woe relate to what is going on in the Key West real estate market you ask. A lot of "investors" bought homes and condos here "on margin"-- if you will. They borrowed funds to buy properties that they could sell at a profit in the future. It worked like a charm for years. The town is a testament to the truth of it. Key West today does not look like it did 20 years ago.

The problem is that the real estate downturn across the country has frightened would-be buyers from buying in Key West. (That and fear of another Hurricane Wilma.) Many investors put their "investments" on the market and drove down the prices further. Many of these investments will be sold at a loss. On the other hand, investors who bought three or more years ago and who have no need to sell are doing fine. They are enjoying the use of the property or the income from it, or both. And when the market comes back their investments will have appreciated even more.

There are many would-be buyers out there looking. Hovering actually. Like vultures. Waiting to see what tasty piece of property goes on the chopping block, I mean auction block.

I remember another fact about what happened after 9/11. Town was dead as hell until Christmas. Then the "buyers" came back. Big time. Prices soared. And those market timers who procrastinated got hit. I think it will happen again.

Iguana Soup

One of the first items in my blog was a piece on home renovations in Key West and I referred to the old school Cary Grant film Mr. Blanding Builds a Dreamhouse. It has always been a favorite of mine. I loved that guy. I wanted to grow up and be as handsome. And I loved the idea of the movie of turning a dump into a great comfy home.

I have done some renovating over the years. I have done some work myself, but I hired builders to do things I could not do. I know the limits of my ability and my propensity to mess stuff up.

Right after Christmas I decided to replace the dishwasher in my kitchen. It died as a result of 3 inches of water during Hurricane Wilma. All of my house had at least 3 inches of water, but a couple of rooms had up to 9 inches. Then I got the idea of replacing the kitchen cabinets with a cheap set from Home Depot. You know, the $3500 10 foot kitchen. I thought I would add some granite to make the cabinets look better. That shouldn't cost that much since I was only buying 10 feet of cabinets.

I visited the model kitchen of the new homes being built on Petronia Street and saw the GE Professional Kitchen appliances and I thought I would add them since they looked so good. They were expensive but worth it for resale later. Then I did a Google search to checkout Viking Appliance costs for comparison purpose. Viking was more expensive for sure. But then I reasoned that the kitchen would really "pop" if I had Viking appliances.

I also decided to add travertine marble floors throughout the house. That would really make the house look much better. I had to repair some of the old wood floors that were damaged by years of too much dampness under the house. A wise and necessary investment I thought.

You are getting the picture I trust. One thing led to another and I got to become Cary Grant. Not the handsome gent,the guy who spent a fortune building his dream house.

Now things are not done, but progress is being made. I tore down the house I owned next door and now have a huge backyard that also needs to be landscaped. And more money to be spent. So here's where the Iguana soup comes into play. Just about every person who has worked on the house is not an American. The contractor is from Rhodesia, the lead carpenter is from England, the carpenter's helpers are from Nicaragua, the electrician is from Ireland, and so on. Two days ago the Nicaraguans saw a 3 foot Iguana in the backyard where we were working. They tried to catch it. They couldn't. So the carpenter said he could and picked up a large 6" x 6" post and hit the beast on the head, killing him instantly. The time was 11:45 AM. He took the Iguana home at noon. He returned at 12:30 and announced he had thrown the Iguana into a pot and was making Iguana Soup.

Later that day after everyone had left I saw a baby Iguana about 12 inches long walking by my pool. It wasn't even afraid. I thought buddy, you better move or you could get thrown into the pot with your mom. Yesterday the carpenter retold the story of his slaying the Iguana and reported on what a tasty tail the beast had. Best Iguana I ever ate, he said.

P.S. I didn't buy the $3500 kitchen at Home Depot. No, like Mr. Blandings I had to have the best. I'll post more on this when the cabinets arrive in later September. They are being custom made.....

House w/pool in Old Town under $449,000

Want to buy a single family home in Old Town with a pool for under $449,000? Call me. Quickly. This little charmer at 722 Galveston Lane is located just two blocks from Duval and across the street from Bill Butler Park. It is a tropical cottage (628 square feet on a 1481 square foot lot) on Solares Hill, the highest point in Key West. This one bedroom, one bath home has a new pool, roof, kitchen, bath. Quaint hideaway, lots of privacy yet within easy walk of all downtown attractions. Nice retreat for selective buyer.

This house was originally priced at $583,000 and the price has been progressively reduced to the new asking price of $449,000 which means the price per square foot is $714. Now that price is still a little high for today's market. But if you consider what you would be getting for your buck (pool, location, old town), it really isn't that high. This is the kind of bargain buyers were searching for three years ago. But today it sits unsold.

The photo to the right shows the pool in the front yard which is enclosed by a fence with lush tropical foliage. There is a walking lane on the north side of the house that provides easy access to Elizabeth Street.

This is not my listing, but I really would like to show it to you if you are looking for a bargain. The present owners bought this little gem in January 2006 and paid $583,000 or $134,000 more than the asking price. Give me a call if you are interested. You may be pleasantly surprised. 305-766-2642.

Second Quarter Sale Report for Key West Real Estate

The second quarter of 2007 is over. How did the real estate market do in Key West this year as compared to 2005 and 2006?

I did a quick search of SOLD homes, condos, duplexes, and 3-4 units from Key West through Shark Key priced over $200,000 from March 1st thru June 30, 2007. There were a total of 109 such sales. The least expensive sale was a one bedroom condo listed and sold for $250,000. The average sale was a 3-bedroom home with 1457 sq ft listed for $920,702 and that sold for $845,707. The most expensive sale was a home listed for $4.675million that sold for $4.34 million.

In 2005 there were 189 sales during the same time period. The least expensive condo sold for $200,000. The average sale was a 3 bedroom, 1325 sq ft listed at $1,002,561 and sold for $954,714. The most expensive home was an Old Town home on Sunset Key that was listed for $7.4 million and sold for $6.950 million with only 105 days on the market

The year 2006 had a total of 124 sales during this period. The least expensive was a 215 square foot condo that sold for a whopping $240,000 ($1116 per sq ft). The average sale was a three bedroom 1,525 sq ft home listed at $1,146,748 and sold at $1,038,578. The most expensive sale was a 5,000sq ft home listed at $5,900,000 that sold at $5,500,000 (on the market 440 days).

What do the numbers show? Well, I am no statistician but is easy to see that the overall sales are down and the overall sales prices are down across the board from low end to high end sales as compared to both 2005 and 2006 sales.

I have also noticed something very bothersome. There have been a very large number of properties that were put under contract (both seller and buyer agreed to all contract terms) during the past quarter but that later went back on the market. There are usually four things that cause a property to fall out of contract: buyer remorse, poor homeowner inspection report, insufficient credit, or property failed to appraise for the contract price. My suspicion is that properties have devalued and are not appraising at the contract price. If the seller will not lower the price, the property goes unsold.

The hardest part of the market to sell is the mid-range priced home. If you go back through Key West real estate sales to 1997 you will see that the mid range priced home has always been the most difficult priced property to sell. Back then the affordable fixer-uppers in Old Town sold around $250-280K. Homes over a million sold quite easily. But the majority of homes in the $500-800K range languished. Those homes are now just priced a lot higher. And I think the pessimism or skepticism about the lack of sales is failing to recognize this fact. Doom sayers are comparing the "boom market" sales of 2003 thru 2005 to today, and they are seeing doom and gloom.

The next three months are traditionally the worst. Town is hot, locals go away, not much sells. The hurricanes of 2005 and the market downturn have put a chilling effect on a traditionally down market. We shall see what happens this year.

My suggestion: if you are a seller and don’t need to sell now: Don’t list your property. If you must sell now, price it correctly. If you are a buyer, now is the time to buy. The market may not have totally bottomed, but good properties will get purchased before the dregs. Get the right property at a price you feel comfortable with.

If you are thinking about buying, please CLICK HERE to preview all current Key West mls listings. Then call me at 305-766-2642 to help you find your deal. And there are some good deals out there.

Do you want to own a Guest House?

Have you ever thought of owning a guest house? If so, I have some ideas for you. I used to own Eaton Lodge at 511 Eaton Street in Key West. So I think I can give you some creative pointers when looking for a guest house in Key West or another location.

First is location. Can the public easily find your property? Not every vacationer comes to town with a room reservation. So it is important that your property can be found easily. In Key West there are numerous street booths and referral agencies that can refer tourists to you. But these services charge a fee of 15% to 20% off the top for each night of the stay. That is money off your bottom line. Moreover, having a location in Old Town near the action on Duval or the marina makes it easy for the vacationer to find his way home late at night.

Second is reputation. Word of mouth and printed reviews in books and on the internet are the two biggest sources of new business. Look for repeat business when you review the financials of a prospective business.

Room for improvement. Has the present owner developed the property to its fullest? Is there any upside left for a new owner? Chances are pretty good that the seller is selling because he either has to or he has tired of the business. Under either scenario I would suggest that any prospective buyer scrutinize the P&L Statement carefully. Not every business operator reports all of his income. Surprise! Try to construct a pro-forma operating statement to determine how much money you should make during the year.

We are still in the first week of summer but I think now is the time to consider buying a guest house so that you can get all of the little problems addressed sooner rather than later. We only have 6 months until season starts. That is barely time to get the property under contract and apply for a loan. Then you will need to obtain an inspection, an appraisal, and a title commitment. Commercial appraisals can take up to a month to obtain. I estimate that most guest house closings require a time frame of 60 days from start to finish. So the sooner you start the process the more likely you are to attain your goals.

Late summer and early fall are hot in the Keys and many people are on vacation. But it is an excellent time to do necessary repairs and to prepare your new business for operation once season hits. Of course you will probably be operating prior to season, but your ADR (Average Daily Rate-price per room) will probably be less because that's the way it is in Key West during the off season. Operating during the off season is similar to training for a marathon. You still run your ass off every day, but it really counts during the marathon. The hard work beforehand just makes the race day more fulfilling.

CLICK HERE to review a list of all current guest houses for sale in Key West's Old Town area. Most but not all are near Duval Street. I think several of the properties are way over-priced. And I think a couple of the properties have room for improvement.

One particular guest house you should consider is Seacape Tropical Inn located just off Duval at 420 Olivia Street. It is next door to the Ernest Hemingway house so it gets lots of pedestrian and auto traffic. The guest house has 7 rooms and a small pool. So the size is just right for a regular mom & pop operation. CLICK HERE for more information on Seascape tropical Inn.

CLICK HERE to preview all current mls lisings in the Key West area. Then please call meat 305-766-2642 to help you find your new guest house in Pardise.

Such a Deal

I have been writing about potential "deals" for some time. Well, here is a deal that just closed.

This particular house was totally renovated about 5 years ago. The seller purchased the property in 2003 for $1,050,000. It is a 1530 sq ft 2 bed / 2 bath home on a very desirable block on Southard Street. The "best" block in my opinion. It has all the bells and whistles that most second home buyers are looking for including pool, off street parking, charm, location, quality construction, and no need for updating.

Why is this property such a deal you ask. It sold for $880,000. The house was originally listed for $1,375,000 in December 2005 and went thru a series of price reductions. The final asking price was $1,025,000. So the sales price per square foot was $575. Depending on the contractor a homeowner selects, renovation cost per square foot easily can go $200 to $350 per foot. Obviously when a seller sells for a price lower than what he purchased the property for there is an underlying reason. This seller's reason for selling is not important, but it is illustrative of what I have been writing. There are bargains out there and the smart buyers are taking advantage of them.

Want to find your own "deal"? CLICK HERE and search the Key West mls and then give me a call at 305-766-2642. Let me help you find your deal in Paradise.

Sea Isle Town Homes Open House

We are having an Open House on Sunday, June 24th at the Sea Isle Town Homes located at 901 Windsor Lane. (Just across Truman Avenue from St. Mary's Church.) The Open House runs from noon until 3:00 P.M.

There are only six of the special town homes available. The homes are 1750 square feet and feature 3 bedrooms and 3 1/2 baths. Each home has it's own pool and off-street parking space. The lots are individually landscaped and fenced.

The homes feature 10' ceilings on the main level and 9' ceilings on the second floor. All interior finishes are high end. Additional features include extra high baseboards, crown molding, recessed lights, pocket doors, Baldwin door knobs, Grohe and Kohler fixtures, Toto bath fixtures, PGT doors and CGI windows (hurricane rated) The kitchens feature Greenfiled Cabinets and Viking stainless steel appliances. There are granite counter tops in the kitchen and baths, and the downstairs floors are travertine marble. The stairway and second level floors are engineered Teak. And each unit has it's own 20 kilowatt Quiet Source Generator to provide unlimited electricity in the event of power failure.

So all of the features sound like many new projects you say. But these homes also have individual Transient Rental Licenses that permit the homeowner to rent the home on a daily basis to help defray the cost of home ownership. The town homes are a short 5 minute walk to Duval or the Conch Harbor Marina.

Mid-Centruy Modern in Mid-Town Key West

This exquisite Mid 20th Century Modern designer home was awarded the Star for its 2004 rehabilitation by the Historic Florida Keys Foundation. The home is located at 2026 Seidenberg and will by OPEN HOUSE today (Sunday, June 17th from 1:00 to 3:00 PM.

The house sits on a corner in Mid-Town. But that location is about the only thing this house in common with other homes in the area. It is spectacular. It sits on an angle and is encased inside a privacy fence. The angles, colors, textures, finishes inside bely the 1950 design. It is ultra-modern and chic.

The home was re-designed by Guiellermo A. Orozco and his partner Kent Ducote. The 1500 square foot home with 3 bedrooms and 2 baths is offered at $967,000 or $644 per square foot. Kitchen Features: Custom-made cherry wood cabinets, stainless steel appliances, wine cooler, reverse osmosis water purifier. Slate countertop and glass tile backsplash. Kitchen opens to both inside and outside dining areas.

CLICK HERE to preview all other homes and condos in Key West. Then call me at 305-766-2642 to take a peek at some of the great bargains now available in Key West.