The Value of Location

Way back in 2003 or 2004 I worked with one of the Key West real estate stars. She had a listing on White Street one half block south of Truman. The house had been totally redone. Three bedrooms, 3 1/2 baths, stainless steel appliances, granite, higher end kitchen cabinets, new3/4 inch solid maple wood floors, pool, and off-street parking. It was listed at $595,000. I hosted Open Houses there for weeks and weeks. I got business off the open houses, but no one would buy it. The feed back I got was that the house was great, but prospective buyers did not want to own a house in Bahama Village. I explained that the same house three bocks to the east would cost $300,000 more. And that is where people were buying homes, not in Bahama Village. Finally, the owner furnished the house and reduced the asking price to $500,000 during a rising market. It sold that same week.


My current office had a listing on 908-1 Terry Lane in 2005. That house and the one next door at 908-2 Terry Lane were basically identical. Our listing was priced at $1,850,000. The Historic Key West Lighthouse is located on just the other side of the lane. The lane runs north and south from Truman down to Petronia--two blocks only. Neither house sold and the owners went through a series of real estate agents in attempts to sell the spec houses.

The house at 908-2 Terry Lane just got listed again. Here are the details according to the listing Realtor: Newly constructed home that was built to the most current codes and finished with the finest materials inside and out! The minute that you look around this fantastic Old Town property you will be sure to notice the beautiful oak and slate flooring, top of line kitchen with granite counters, wood cabinets and professional series appliances. Luxury and function prevail throughout this incredible home with many thoughtful details, such as built in Yamo sound system, custom closets, Anderson doors and storm protection with hurricane windows and shutters. Custom built home situated on a quiet Old Town lane in a growing neighborhood that has been undergoing many recent changes and improvements. Walking distance to all that Key West has to offer!

The view from the second floor front balcony of the lighthouse is quite magnificent. The great room and kitchen open onto the pool and the rear garden area. The house has everything a prospectiv homeowner wants in a Key West home. The house is now listed at $995,000 or $711 per sq ft.

This property is now available for almost half of the original asking price back in 2005. If the property is purchased this go around, the buyer will get a very well built home with a terrific view at a good price. The negative aspects of owning a house in Bahama Village are changing. The City of Key West is redeveloping the huge tract of ground west of Truman Annex that was given to the City by the US Navy. That project will take several years to complete, but when it is finished the impact on the immediate area and the entire city ought to be as dramatic as the transformation of the Truman Annex property was 20 years ago.

I think properties in Bahama Village are undervalued. And I think the house at 908-2 Terry Lane is specifically undervalued.

CLICK HERE for more info and photos of the house. Want to see it, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

1119 Olivia Street Old Town Key West -- Steal This House

The little house at 1119 Olivia Street in Old Town Key West has just been reduced to $585,000 from its original price of $1,275,000 in March 2007. Half Price! Too bad it wasn't worth the original asking price, however. The property is owned and listed by a Realtor--not me. Thank God. But he must disclose that to the public. Please don't take these comments on my part as being negative. But you need to know the facts when you invest your money in property. Especially now!

This is an excellent opportunity to own your own Conch home located in Old Town. The home at 1119 Olivia Street was completely renovated in 2005. The property is Located in the X flood zone and sustained no damage in any of the hurricanes. A true high and dry property. Some of the features include: 2 licensed residential units, 2 off-street bricked parking spots, 2 separate electric meters, 2 water meters and sewer accounts, granite counters in kitchens, and central A/C, and room for a pool. The property consists of a 1 bed/1 bath apt above rented at $1,200, and a 2 bed/1 bath below rented at $1,700 Per month. Owners will have flexibility of occupying entire home as a 3bed/2bath or renting out a portion as a lock out unit. Building was termite tented in July, 2006. As I mentioned the house is now priced at $585,000 or $496 per sq ft. That price makes it very competitive in the market since it is well located in Old Town, has off street parking, and is legally licensed as two living units. The present owner purchased the house in April 2005 and paid $785,000. He then did the renovation which had to cost a minimum of $100 per sq ft rounded to $150,000. So I would increase the capital investment in the property to be in excess of $$935,000. Some smart shopper is going to buy this house on its Half Price Sale quite soon. Mark my words.

I have shown 1119 Olivia Street several times. The downstairs bedrooms are on the small side. But they work--especially for a rental. If a buyer wanted to reconfigure the downstairs or upgrade the flooring from ceramic tile to wood, or even do a chi-chi redo, I think it would be money well spent, but it certainly is not necessary. The seller renovated or rebuilt everything except the roof, and it looks like it is in good shape. (A home owner's inspection will tell for sure.) Finally, I am not a friend of the seller/agent. I just think this property at this location and at this price makes good sense.

A couple of months back I wrote an item about the house directly across the street at 1118 Olivia which is priced at $485,000 or $700 per sq ft for a 2 bed 1 bath home that is in a compound. I think both properties have their individual attributes. The two units at 1119 Olivia is a potential Short Sale. Any sale of 1119 property will necessarily require the approval of the current lender. The listing agent/owner told me he has discussed the short sale scenario with his lender and that the lender is prepared to act accordingly.

CLICK HERE for more info, additional photos, and a map to help you locate 1119 Olivia Street.

And CLICK HERE to checkout a partial list of the 39 duplexes for sale in Key West. I eliminated properties that are not located in the Old Town area or that are not comparable in asking price.

CLICK HERE to perform your own personal search of all Key West mls listings. Then give me (Gary Thomas) a call to schedule a personal showing. My number is 1-305-766-2642 or you can send me an e-mail at kw1101v@aol.com.

Flying Down to Buy REO in Key West

Flights to Miami and Ft. Lauderdale are cheap this time of year. Even some flights to Key West are relatively inexpensive. So hop on a plane and fly on down to Key West to buy yourself an REO.

REOs are real estate owned by banks and mortgage companies acquired through foreclosure. In case you missed the news the past year or so, we got problems in the banking and mortgage fields due to variety of causes. As a result lenders across the country (and internationally as well) own a lot of residential properties in all price ranges and in all localities across the country. Key West is no exception.

I created a list of REO ASSETS (properties for sale) that are available from just one
company in Key West. CLICK HERE to checkout the list of homes and condos from Key West up to Big Pine Key. Most are in Key West, however. But you need to read the details so that you do not assume all properties are here.

I used to work for a couple of the largest banks in Denver and managed the foreclosure and liquidation of bank owned assets. So I am writing from real life experience over a period of years. Banks make money by charging for various services and by lending money. There are lots of regulations that control how much money a particular bank may lend based in part on the value of its performing assets. A performing asset is a loan that is being paid as agreed. Loans that are not paid as agreed are "graded" and sometimes marked down because the bank doubts the loan will be fully or timely repaid. So the portion of loan that is deemed doubtful is set aside in a loan loss reserve category that itself is of various gradations. Sometimes the prospect of collection is so doubtful that the bank must write off the loan, but it may still attempt to collect the loan. Any collection after write off is viewed as a big win for the bank because it goes right to the bottom line as a cash asset.

When a bank forecloses on a house it typically converts the loan asset to an "REO" asset of a predetermined value based on an appraisal and which is discounted for holding costs, sales costs, taxes, etc. The bank usually sets the asking price on REO at the appraised value of the REO. Any amount owed on the prior loan that cannot be recovered through the sale of the REO is usually written off unless there is other collateral or assets which can be quickly recovered upon by the bank.

The problem with REO right now is that banks across the country have too much of it. It is flooding the real estate market and competing with similar properties owned by regular folk who pay their mortgages but who feel the need to sell their homes at an inopportune time. The result can be that bank owned REO may drive down the property values of similar properties in the same area.

Here are a few comments on some of the properties. But I encourage you to review the entire list. What may look interesting to me may not appeal to you. 62 Merganser Lane at the Key West Golf Club. That unit sold for $587,000 in 2004 and is now listed at $319,000.

1030 Eaton St Unit 404 A is a 2 bed 1 bath condo conversion with 932 sq ft of living space inside, a small outside area, and off street parking in Old Town. I think it is still priced to high at $345,000 even though the former owner paid $555,000 for it in 2005.

The house at 2422 Staples Ave was purchased in 2005 for $736,000 but is now offered at $399,900. It has 2 bedrooms, 1 bath, stainless steel appliances and an in-ground pool and covered parking.

And the house at 2401 Linda Ave Key West, FL also has a pool and a white picket fence. It is priced at only $409,000.

Not all REOs are good , but not all are bad either. It takes some time and effort to figure out if an REO property will work for you as a home or as an investment. There are a lot of REO properties for sale at the Golf Course. Three years ago the prices were outrageous. Today they almost break even as an investment. You might be able to purchase a townhouse around $300,000 and rent it out for enough to cover your monthly mortgage payment and other expenses. Even if you have to come out of pocket a little each month, the present downturn in the market will not last forever and I think the value of these units will go back up. Again, that is an opinion and not a promise.

The banks have already discounted the properties and taken into consideration the problems associated with the individual properties. But that does not mean the bank will not negotiate further. I encourage serious buyers to have a loan commitment in hand so that you can make a strong offer to close on a transaction within a matter of a few weeks. That will get the bank's attention. Don't complicate matters by putting in all kinds of contingencies. You must understand the bank is a reluctant owner that just wants to dispose of the asset. It has no emotional ties to the house. All the bank wants is money--quickly. And with the least amount of problems. If there are problems with the property identify them. But then posture your offer so that you identify the issues and agree to assume them--for a price concession.

If any of the properties listed above look interesting please give me, Gary Thomas, a phone call at 305-766-2642 or e-mail me at kw1101v@aol.com. You may not become a millionaire buying REOs like those guru's on late night tv, but you might become a thousandaire. That could be good.

Don't Say Cheap--Say Inexpensive

I have talked with several would-be buyers who think that the economic downturn has not hit bottom. They think prices will continue to fall and that they will be able to buy a second home in Key West at some future date for a lower price than is currently available. They may be right. But they could just as easily be wrong.

In an area where you have lots of similarly located, sized, aged, and comparable constructed homes I can understand how market events could cause prices on individual properties to fluctuate. And in locations that are dependent on one business or one industry, I can see where a downturn in a business segment (such as a plant closing) could dramatically effect prices across the board--not just in housing but in all segments of the local economy. But Key West is different from most parts of the American economy because of its particular location, the housing base, the tourist industry, and the significant military presence.

Some of the reasons people who visit Key West think about buying a second home here is the wonderful weather, the laid back lifestyle, the colorful locals, and the charming homes. There were stories on this morning's Today Show about the miserable weather in Michigan, snow in New York City, an earthquake in Nevada, and rioting in Europe. Our weather seldom changes and the front page of our paper, The Key West Citizen, usually deals local political news and human interest stories. We don't have riots or any serious crime as a rule. Our economy has taken a downturn because of the national emerging recession, but not all segments of the local economy are effected.

There are unique homes like the one I wrote about yesterday (409 William Street) that are very well priced by today's market and that I think will be deemed to have been a bargain just a few years from now. Some individuals who own numerous properties in Key West are hemmorhaging because they own too many properties that they have not been able to sell and have been forced to liquidate at below the now reduced fair market value. There are numerous properties in the foreclosure pipeline or that have been foreclosed that are now offered for sale at dramatically reduced asking prices.

Yet there is still a resistance by some buyers to buy because they think the markets will continue to decline. There are currently 17 condominium units at 1800 Atlantic listed for sale or less than 10% of the 172 units. They range in price from $398,000 to $1,698,000 (or $253 to $849 per sq ft) depending on location within the complex, extent of renovation, and the existence of transient rental license. There are several units that are in the process of foreclosure or that have been foreclosed. Those units have the lowest price points. A few weeks ago I wrote about ocean front and beautifully decorated unit at 1800 Atlantic that was being offered by the estate of the former owner at a very affordable price. It got snapped up immediately. I can understand hesitance or resistance at buying at the top end of a price range, but the units that are being offered as short sales or units that are bank owned are "buying opportunities". But that is just my opinion. CLICK HERE to checkout all current properties available at 1800 Atlantic. See for yourself whether there is a buying opportunity waiting for you.

Several of the properties that I have written about in the past couple of months have gone under contract and closed or are still awaiting closure. Most of the realtors I know are very busy right now showing properties and many are submitting offers. Many of those are There are opprotunites across the island in all price ranges and all types of properties. If you are seriously thinking about buying a property in Key West, it is time to get serious. Please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com for more information.

Of course I understand that not everyone believes in the future the same way I do. Some will just hang around waiting for prices to fall. Others may dream of buying a luxury land yacht so they can travel the country in style. But maybe a few will act now and buy into the dream of owning a place in Key West--maybe a unit at 1800 Atlantic.

409 William Street Old Town Key West, Fl

I wrote about 409 William Street a few months back. I was hoping that some buyer with a few extra bucks would contact me and say "Let's buy that house!" But that did not happen.

For the last umpteen years it was the Gideon Lowe Guesthouse and later Whispers Guesthouse. The current owner bought the property in June 2005 for $2,000,000 and started an extensive renovation of the property. Everything is new and first rate. The owner/developer did not cut costs or corners. The house is 2850 sq ft and sits on a 4422 sq ft lot on one of the best blocks in Old Town. This 2 story historic landmark was originally built by the youngest son of one of the island's earliest Bahamian settlers (c.1845) and expanded c.1866. The latest renovaton was completed in 2007.

The newest incarnation has 4 bedrooms, 3 and 1/2 baths, state of the art amenities, razzle-dazzle kitchen, pool, off street parking, gardens, sunset views, and a killer location. After the home was completed it was initially offered at $2,999,000, but is now offered at $2,195,000--that is $770 per sq ft. Those that read this blog know I think price per sq ft is a useful tool in comparing properties to determine their present and future value. This house is currently under-priced in my opinion. The seller just has too many properties and wants to sell. This is an opportunity some bottom feeders dream about. I do not see the price going any lower, however.

When the economy turns and lots of people start buying expensive second homes again, this is the type of house that ought to be in very high demand because of its history, architectural features, location, and up-to-the-minute quality renovation. Those features are future value which means this house will increase in value much greater than houses without the same qualities. At least that's my opinion. CLICK HERE for more photos and information on this quality home.

If you have the glue to afford a home like this, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw11001v@aol.com to schedule a showing.

1 Lowes Lane Old Town Key West, Fl

I've written many times about Life in the Slow Lanes of Key West. There is a new listing of a recipient of a Historic Preservation Star at 1 Lowes Lane in Old Town, Key West. This house is 1388 sq ft and sits on a 1305 sq ft lot on Lowes Lane. Lowes is a dead end lane that is accessed midway between Fleming and Southard Streets off of Grinnell. The end of the lane is the entrance to a carriage house of a home that sold two years ago for $5.5 million. The Chief of Staff of the President has a home across the lane. Get it. Good neighborhood.

The home has 2 bedrooms and 2 baths and lots of charm. It has a very comfortable lived in look. CLICK HERE for more photos and information on this home. It is priced at $749,000 or $540 per sq ft. That is a pretty fair asking price for a nice home in a very good area on a quiet little lane.

603 Angela Street Old Town Key West, Fl

Remember the Lennon/McCartney song All You Need Is Love? Well, this poor house at 603 Angela Street needs some luvin' real bad.

Unlike many of the houses in Old Town that need to be fixed up, this house is practically new. It was built in 1997, so it not yet even a teenager. But it has not been maintained very well. That is not to say it has been abused or damaged. I think it needs a thorough cleaning, a fresh coat of paint inside and outside, decks by the pool powerwashed (or better replaced), shutters replaced, and perhaps resurface the pool. The house should be tented for termites as well. Nothing I mentioned is really expensive or difficult to do, but doing all would immediately add value to the property.

The present owners have some issues that require the house be sold. So I think a prudent buyer would seize this opportunity to by a house so well located in a heartbeat. 603 Angela in the heart of Old Town and near the top of Solares Hill. It is one block to Duval. The Gardens Hotel is located caddy corner. (The rooms there go run between $300 to $680 per night.) And the former home of Philip Burton is across the street. CLICK HERE to read about the Philip Burton house.

The house at 603 Angela Street has two bedrooms and three full baths (in case you want your relatives or friends to sleep in the living room.) The two story house is 1440 sq ft and sits on a 2167 sq ft lot. It is priced at $749,000 or $520 per sq ft. That seems like a good price to me given the condition, but I think a real strong all cash quick close offer could take the property for even less. But that is just my opinion. I know the sellers really want to sell. CLICK HERE for more info.

The house next door that was built by the same builder and at the same time as 603 Angela is used as a vacation rental. CLICK HERE to the neighbor's cool pool. The property manager tells me he rents that home for $8000 per month. (It is used as a monthly, not transient, rental. So it is only rented to one renter per month--whether it be for a day or the entire month.) I think the house at 603 Angela could demand a similar price if the improvements I suggested were made.

All this house needs is love, and a fresh coat of paint, yada, yada, yada. Want to see it, call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

Key West Hole in the Water For Sale: Not Cheap

I don't own a boat so I have no idea what I am writing about except that I have heard this phrase used many times: "the happiest day of a boat owner's life is the day they buy the boat and the day they sell it." I guess anything you love can end up being expensive if you do it right or do it up "big".

Two days ago I wrote about the new Steamplant Condos that overlook the Conch Harbor Marina on the Historic Key West Seaport. That area as a whole is referred to as the Key West Bight. Click the black and white photo to the right and it enlarge to provide a better view of all the marinas in that immediate area.

The dazzling moonlight photo is taken from the Galleon Marina looking toward the Steamplant. That photo is a couple of years old and shows the Steamplant's steel skeleton.

If you own a boat and want to buy a hole in the water in Key West I have prepared a short list of boatslips that are for sale. CLICK HERE to preview the list. There are numerous new boatslips available on Stock Island at Sunset Marina, the Pennisular Marina, and Kings Point Marina. There are only a few available at the Galleon or Conch Harbor Marinas. Location plays just as big a roll in the pricing of boatslips as it does in homes. The slips located at the Bight are the ones most in demand because of their prime location. And it seems that boatslips have held there value relatively well during the past two years.

Let me help you buy a hole in the water. Call Gary Thomas, 305-766-2642, or e-mail me at kw1101v@aol.com for more info on other boatslips or other property

High Society: Key West Steamplant Condos

Just before sunset there was a soiree at the new Steamplant Condominiums located at the foot of the Key West Seaport. Realtors only. But the public is invited for a look see on Sunday. Go take a peek and see what you think. Come back and leave your comments here.

The Steamplant is touted as an art deco building, but it was built in 1951 so I'm not sure if it would really qualify as art deco. It was the place where the Key West City Electric Company (now Keys Energy) made electricity. After Key West started getting its electricity from the mainland, the building was no longer necessary. The powers that be declared the building iconic and historically significant and demanded that it be renovated and not torn down.

Ed Swift took us on the tour yesterday and I asked how much of the old building remained. He said the front wall. He called what they did a "facadectomy". They built an entirely new building and retained the historic front wall as a skin. They do the same thing all the time on old houses down here. It makes no sense, and it's a con. But it is considered legal.

There are nineteen condos in the building. Each unit is accessed from covered parking by private elevator. Some of the units that face the seaport are called flats because they occupy just one floor. And the units that face the city are called townhouses because they occupy two floors. Each unit has its own rooftop pool where the owner can dip but not dive. CLICK HERE for a peek at a pool. That photo is for real. It is not a fake. That is the pool you get. The rooftop terraces that overlook the seaport have commanding views, but the terraces themselves are half the size of the townhouse side of the building where the views are less interesting. But that is just my opinion.

There is a huge public rooftop terrace that overlooks the seaport as well. That terrace has a permanent catering kitchen and bar. The developer said that the profile of the Steamplant owners is such that he expects many events and fund raisers will be held on that terrace. High Society indeed. I can just see Fred and Ginger dancing on the terrace.

The units are large--no huge by Key West standards. They range in size between 2072 to over 3500 square feet. When you add the floor level terraces and the rooftop terraces the combined spaces are between 2879 to 5477 square feet--depending on the particular unit. No two units are the same. However, all share the same quality finishes and amenities. Top of line across the board.

We toured several of the units on both sides to get a feel for the layouts. The owners of one townhouse have spent an additional $250,000 in upgrades the already expensive unit. And the developer told us of another happy homeowner who spent $450,000 on upgrades. (That is so typical of what a lot of rich buyers do when they buy an expensive home in Old Town or Casa Marina: they tear everything apart and redo it. Even if it is new and beautiful. They are like dogs who must make their mark.)

I won't bore you with the details but the building has a full time property manager, a concierge, and staff to maintain the individual pools and attend each property owner's rooftop terrace (garden). There's a car wash, gym, meeting rooms, you get the picture

We have a resale in the building. And there are a few buyers (speculators) who have resales available as well. And the developer still has a "couple" of units left. I would be happier than the dickens to accompany an interested buyer to tour this property. Units are priced $2,750,000 and up.
CLICK HERE for more info and more pics on the available units.

This property was built for the wealthy. If you have a yacht and want a permanent base to house your baby or a friendly port, the Key West Steamplant may be your second home. Or third or fourth. There are boat slips available at the Historic Seaport. And the City of Key West is at your doorstep. Give me a call if you're looking for a place like this: 305-766-2642.

Cheep Cheep--Not Cheap Cheap!

There are a few things that just about every first time tourist or seasoned traveler does in Key West: take pictures of the wild chickens, eat conch and or key lime pie, ride the conch train, and checkout the real estate listings outside local real estate offices.

Some folks return season after season and remark about how high the prices have risen. They say things like "I wish I would have bought that a house back when the prices were cheaper." These days they say things like "I don't think we've seen the end of it yet"--meaning the prices will continue to decline until some indefinite time in the future.

I prepared a short list of single family homes in Old Town priced under $650,000 CLICK HERE. There are a couple of very nice properties in the list. And there are a couple of dogs as well. I should not disparage dogs that way. I apologize.

Some of the houses on the list are described by the listing offices as "potential short sale". That means the offer to sell at the price listed is conditioned upon the mortgage lender agreeing to accept less than the total amount due on a mortgage. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose. And not all sellers nor all properties qualify for short sales, i.e., judgment liens, tax liens, mechanics liens, and other liens dead beats accrue.

5 Hunts Lane in Old Town could be a sweet renovation project for someone. It is a truc conch house that has been in the same family ever since it was built over a hundred years ago. It is priced at $409,000 or $338 per sq ft. The house is a two story and has 1210 sq ft according to tax records.

926 Southard Street is used as a vacation rental and seems to stay very busy. It has all the street charm a buyer could want. There is a cute little pool in the rear. The house has only one bedroom, so that is a bummer for people with friends or family. Or maybe it isn't. It is priced at $645,000.

Our office has the listing at 1011 Truman Avenue. It also is a potential short sale. It has two bedrooms, two baths, heated pool, off street parking and it's beautiful. Offered at $650,000 or $731 per sq ft.

Old Town is always the easiest location to sell. None of these houses is outside of Old Town, not even just across the street. Take a look at the list CLICK HERE and see if one of these little homes might work for you. It may not be cheap, but it could prove to be a good investment in your future.

Please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com if you would like more information on any of these properties.