Dirty Pool -- Bank Foreclosure

Before you accuse me of Dirty Pool, read the rest of today's blog. The little house at 1310 Olivia Street in the Meadows Area of Key West is another example of a Bank Foreclosure that takes a bad deal and only makes it worse. Here's why: the pics to the right are of the property two years ago when it was still owner occupied. This is how the former owners' realtor described the property before the foreclosure: "Excellent Meadows location! Very private 2BD, 2BA home in a very tropical setting, fully fenced on a quiet street with off-street parking. Open, airy & bright, freshly updated, hardwood floors throughout, new 25 ft pool, entertaining decks and a wonderful large covered 419 Sq Ft porch." CLICK HERE to read the description of the property by the listing realtor for the bank owner and look at the pics the realtor provide of the house. Doesn't look or sound like the same place does it!

I've been telling possible buyers to look at this house. I showed it several times right after it was renovated back in 2004. The house is CBS (concrete block structure) that has been stuccoed. That eliminates a huge universe of potential buyers who are fixated on owing a charming wood cottage with the same features. The prior owner purchased the house in 2004 for the sum of $799,000. The bank now owns the house and it is presently priced at $699,900 or $761 per sq ft. That's high for today's market.

The pool is dirty. I looked at it yesterday. And there is some mold growing on the exterior trim. No big deal. But that's what happens when you neglect property. Weeds grow, pools become stagnant, houses develop a musty odor. But the good thing is that most of the things that detract from the appeal of the house are fixable--often times without a huge expenditure of money.

My first real estate purchase in Key West was Eaton Lodge (guest house) at 511 Eaton Street. It was foreclosed upon by the SBA and sat boarded up for two years. I bought it at public auction in October 1993 and moved in three months later. CLICK HERE to see a pic of some of the junk we threw out of the property immediately after taking possession. A little bit of paint and elbow grease can work wonders on bank foreclosures.

If you want to see 1310 Olivia Street please give me, Gary Thomas, a call at 305-766-2642. Somebody is going to see the underlying value of this house and make a fare offer and end up getting a pretty good house in a pretty good location.

No Pretense Needed

I had a walk-in a couple of weeks ago who was interested in buying a large winter home for his family. He's a self-made man from the mid-west and has accumulated other houses and according to him quite a bit of money. But if you looked at the guy, you'd never guess it. He told me that he's just a "No pretense" guy. I told him "You picked the right place".

When I first started thinking seriously about living in Key West I thought it would be great to live in a gay town. I gotta confess I thought the idea of lots and lots of gay men would be fun, even though I was in a long term committed relationship. But I wanted to live where I could be open about being gay. Or so I thought.

There was a program on PBS last night that was part of a series called "In The Life". The episode included a piece on gays in Poland and how oppressed they are by the government. Polish society stigmatizes gays as needing help for the abomination that socieity deems as intentional but also curable. The government even prevented gays from holding peaceful parades seeking fare treatment by the government. One fellow talked about being so repressed that if he had not left his village and moved to Warsaw he knew he would have committed suicide because of the oppression. It made me re-evaluate my situation in Key West.

Generalizations are usually full of holes and probably unfounded but I'm going to make one: people in Key West don't care who you are or what you do in your private life. They may gossip about what you do, for sure. But most people are happy to let you be whoever you want to be and expect the same from you toward themselves.

There are a bunch of groups that make up the local population. The Conchs are natives that trace their family history by the number of generations they have lived on the island. Conchs can be white and black. There is a big military presence made up of Navy and Coast Guard men and women. Every person I've met that is in the service has been very polite, well groomed, and well spoken. They are in a class of their own for sure. The gay population is another community that is divided between people who moved here to either retire or open a business and people who moved here to experience life in Key West and who probably have at least two jobs to make ends meet. They may be servers in restaurants, bartenders, guest house employees, shop clerks, or maybe mates on a boat. There is an identical group of young straight guys and gals that have the exact same jobs and aspirations. And then there is this very large group of foreign born people who live here--many who have overstayed there 6 month visit to the US. There are many Czechs, Russians, Ukranians, Polish, and Nicaraguans in this community. Women in the groups probably work in hotels and most of the men work in construction.

As I watched the PBS program I wondered about how the local Polish population feel about Key West gays. I've had several Polish people work on my house during the past year. They knew I am gay and never said anything bad to me. But then I was paying them money. Lots of money. But it made me wonder. And then I thought about how everybody here is in the same boat so to speak. We are all on this little island out in the middle of the ocean. We're closer to Cuba than we are to Macy's or a Target store. We share the same weather (good and sometimes not so good). We live in an economy that's not doing so well right now. So everybody makes do. Then I intuitively knew that the Pols are just here living their lives and really don't care.

If you are looking for a place to escape the world where you have to pretend to be someone or something you are not, look no further. No pretense is required to live in Key West. Let me help you find your new home or business in Paradise. Of course if you want to pretend you can do that too. We have lots of pretenders in Paradise. They are just organized about it and hold a really big event every year where everybody gets to pretend to be somebody else. It is called Fantasy Fest. CLICK HERE to search the Key West Association of Realtors mls database. If you see something you like please call me, Gary Thomas, 305-766-2642, or e-mail me at kw1101V@aol.com.

915 Angela Street Old Town Key West

Half of you won't even read this when I tell you about 915 Angela Street. You see it is located directly across the street from the Key West Cemetery. I'm not being funny when I report that there's no room left. All the plots have been sold and there is a waiting list of would-be buyers who have their hearts set on spending eternity in Key West.

The charming cottage at 915 Angela has a bright and unobstructed view of the cemetery. The picket fence and two driveways define the outer space. But once you step inside all of the downstairs rooms open onto decks and lush tropical foliage. The affect is is just plain inviting. You want to take off your shoes and unwind.

Here is how the listing Realtor describes the home: "Delightful Old Town cottage boasting 3bd/2.5ba, two off street parking spaces and pool. An outstanding use of space brings the outdoors in with living room nestled between spacious covered decks, lush landscape, generous pool with waterfall and private spa. Enjoy charming Dade County pine walls and ceilings, renovated kitchen & baths, cathedral ceilings and lots of glass doors, windows and skylights. Impeccably cared for both inside and out and designer finished available turn key with optional furniture package negotiable."

This 1340 sq ft cottage sits on a 3350 sq ft lot. The cottage to the west is a Key West landmark and will never come down. There is a wide space between the two homes that makes the house next door seem so far away. And the neighbors across the street are just so dang quiet. You never hear a peep. The house is priced at $1,249,000 or $925 per sq ft. That's kind of high for today's market. But this is not your average Key West cottage either. CLICK HERE to see more detailed info and see more pics.

If your aren't afraid of cemeteries you owe it to yourself to see this lovely home. The rooms are very live able--meaning they are not too large and for sure not too small. Please call me, Gary Thomas, at 305-766-2642 or e-mail me at kw1101v@aol.com if you would like to see this charming cottage.

The Greed Factor

When I was growing up it was expected that you would pay your bills. If you wanted something and couldn't afford it, you either didn't get it or you saved to buy it.

I remember my mother going to department stores and making payments on something called "Lay Away". I sort of figured out that you had to make payments to the store until you had paid enough to take whatever you bought home with you.

There was a toy store a few blocks from my house when I was a little kid--around eight years old. I remember going in and giving the lady money every week out of my allowance (I think it was 25 cents per week). Eventually I paid off the $1.25 debt and took home a silver colored pistol that was also a movie projector. In retrospect it was a flashlight shaped like a gun that projected a small loop of celluoid pictures. But it was my first credit purchase. And it was all mine.

Just as I finished college Visa and Master Charge were introduced and I got one. And I bought my first new car with a loan from a bank just as I started law school. I had never had real credit, and the bank took a risk on me I guess. Maybe the fact that the Judge I clerked for in law school vouched for me helped me get the credit.

In August 1976 I borrowed about $8,000 from my mother to help make the down payment on my first house. I promised to pay it back when I got my Christmas bonus from the law firm where I worked. In January 1977 I repaid the money to my mother. She said she was totally surprised. She thought she'd never see the money again. What kind of son did she think she raised?

I worked in the commercial loan workout area of a couple very large banks. We dealt with people and businesses that had defaulted on their loans. We did not make residential loans, but we often had homes that were used as security for commercial loans. I always dealt fairly with our customers, and I expected them to reciprocate. I did not ask more of someone than they could do. But I expected them to do what they could do, and not just do what they wanted to do.

In the past few weeks I have seen the names of many Key West residents (many very wealthy individuals, many professionals, many socialites) names appear on our mls Hot Sheets as they either listed their homes or investment properties for sale or reduced the asking price and offer the properties as Short Sales. A Short Sale is the offering of a property at a price where the lender must agree to accept less than is owed to permit the sale to close. The seller expects the lender to forgive the balance of the debt. Congress recently enacted legislation that allows the IRS not to treat debt forgiveness such as occurs on Short Sales as a taxable event in most cases.

A lot (I mean a lot!!!) of locals helped fuel the fire that drove up prices here. Landowners, apartment owners, commercial property owners, property developers, and local investors took every opportunity to gouge as many dollars out of residential and commerical tenants. They bought and sold properties taking quick profits because they could do so. And in the process the cost of residential apartments increased by at least 50% since 2000. The costs of commercial space on Duval has driven many small businesses out of business. Many of the commercial landlords just let their property sit vacant rather than negotiate reasonable rents because they know in the end some poor fool with a good business plan will take the space at an exorbitant rate.

But here's the kicker. Local investors that own numerous properties are now listing non-performing properties on the market as Short Sales. Many locals including business professionals are doing the same thing. I'm talking about professionals that charge hourly fees in the hundreds of dollars to people like you and me. I recall one such investor who bragged about making $100,000 on a contract he flipped on a Pritam Singh real estate deal in Marathon about 3 or 4 years ago. This person has several Short Sale properties on the market today. That is the truth! And it is outrageous! Take the profits and let the bank and ultimately the American public absorb the loss through higher interest rates or fees in the long term.

It really angers me that some of these Key West investors who made so much money on the market up-tic look like they may avoid any financial responsibility for their own greed on the down side.

I think we were better off as a country when people like my mother had to live within their means and pay for what they wanted on lay-away. The abuse of credit and the avoidance of personal responsibility for one's own actions is driving our country to the poorhouse. Of course, we'll be going in style in an unpaid for luxury gas guzzler.

First Quarter Real Estate Sales in Key West

Let's take a quick look at how well the Key West real estate market fared during the period of March 1st rough March 31, 2008 as compared to the same periods in 2005, 2006, and 2007. The year 2005 was a record year for Key West. There were 45 single family home sales in March totaling $55,369,000 and 36 condo sales totaling $24,880,513. Then the market began its slide. And Hurricane Wilma occurred in October and that created an even greater sense of uncertainty about Key West and Key West real estate as an for primary home ownership and as an "investment" vs. second home ownership as fulfillment of a dream.

The years 2006 through 2006 had the biggest dip in home sales to only 17 for $16,389,000, but there were 20 condo sales totaling $14,045,000. In 2007 there were 21 home sales for $17,320,550 and condo sales increased to 23 for $19,056,725. This year the single family home sales increased again to 25 that totaled $19,565,300. But condo sales slumped to only 14 with a paltry $5,115,450.

The First Quarter in 2005 saw 102 single family home sales totaling $123,299,090 against 46 this year with a volume of $39,589,300. The average home price declined 29% from the 2005 level. But condo sales during the same time fared worse. There were 82 condo sales in 2005 totaling $55,871,563 vs. 29 this year with only $13,240,950. The average condo sale declined from $681,361 in 2005 to $456,584 this year or about 33%.

Back when I started this blog I wrote about real estate market cycles. They start with euphoria transition into denial and end in capitulation. I think and hope we're in the final phase. Everyday for the past three months I watch the mls as real estate owners price or re-price their real estate offerings based on the new real estate reality in Key West. The mark downs and even new offerings at significantly lower asking prices is noteworthy. I'll probably get yelled at for saying it but the condos out on the east side of the island are free falling as are the units at Key West Golf Club. A lot of owners are just "walking away" from Golf Course condos that they purchased in 2005 when the average unit sold at $681,361 vs 2008 when the average unit sold at only $348,700--that's just about a 50% drop in price. The "value" of the units is still there. But the price is gone. And so are the owners. They are leaving their homes or investments. They are trying to sell short and walk away. There are currently 29 units on the market at the Key West Golf Development with an average asking price of $455,372. For example, Mr. A bought his unit in 2004 for $549,000 and it is now priced at $299,000. He had an 80% loan but got a boost from his lender of an auotmatic second of $54,900 to help with his down payment. Still, he had $54,900 of his own money in the condo. That will be his loss. The lender will probably end up losing $294,000 on this deal when real estate commissions and other sales costs are included. And remember,there are 28 other properties for sale there alone. And the sales are not over.

I've seen a change in the market in Old Town as well. The grand homes are still retaining their allure but they don't sell that often. The large expensive renovations have started to take their hits. Many have been reduced in asking price because they did not sell. I've written about several of them. The homes that would have sold three years ago around $3 million are now worth about $2 million or so.

Just about every Realtor in town is busy showing property and many properties are going under contract every day. A lot of the folks I've been talking to are looking for bargains and they say that they think we are at or almost at the end of the down market and that is why they are starting to look. Key West has not lost its allure. It just got way over-priced, and the national economy and the mess in Washington just compound buyer uncertainty.

BIG Short Sale - 709 Bakers Lane

One of my favorite properties just became a real bargain. No hyperbole. Like Joe Friday (Jack Webb) used to say "Just the facts!"

709 Bakers Lane sits on Solares Hill at just about the highest point on the Island of Key West. It was renovated to sell at $2.8 million. The owners missed the 2005 selling season and then the downturn occurred in the real estate market. The sellers then made periodic price reductions. We put a deal together a few months back but the buyer was unable to complete the transaction.

So today the property is offered at $1.4 million on a short sale basis which means that the lender will have to approve the sale price since the asking price is less than the amount owed to the lender. The loss for the seller is substantial. The opportunity for you as a potential buyer is very substantial. This is a deal at this price. This place is really sweet. The gardens and pool area are enchanting. There is enough space for you and your family and friends (you'll have lots of friends when they see these new digs!!!) to have separate living areas and very accommodating common areas. CLICK HERE for more info and more pictures.

And your private little island within the Island of Key West is only two blocks from Duval Street and short walk to the Historic Seaport.

CLICK HERE to see 6 other houses in Old Town with 3 or more bedrooms that are comparably priced (actually, all are priced higher by more than $75,000). You will quickly see and truly appreciate why I call this house at this new price a Bargain.

Call Gary Thomas immediately to write an offer on this property. 305-766-2642 or e-mail me at kw1101v@aol.com.

Bank Foreclosure 1103 Virginia Street Key West

Bank Foreclosure at 1103 Virginia Street. Four bedroom, two bath house with no kitchen--looks like somebody took it away. Central A/C, beautiful pool and deck area, covered off street parking, some nice decorator touches and some work left undone. The tax records show this house as 1626 sq ft and sits on a very large 3515 sq ft lot. The house has new siding, new windows and doors, new floors, new drywall, new electric, and new plumbing. The asking price is $499,900 or $307 per sq ft. That sounds too good to be true for Key West.

CLICK HERE to read what the listing Realtor has to say about this property. The listing Realtor is not local and did not have any pics posted. So I took some pics and you can see them HERE, HERE, HERE, HERE, HERE, HERE, HERE and HERE.

1103 Virginia is located one block west of White Street and one block north of Truman Avenue in the south portion of Old Town. Fausto's Market is one block to the east. The Truman & White Chevron is a block north and a block east for reference points. The Wesley House Child Care facility is one half block to the east and the Montesori School is one block south of that. The area is a mix of long time Conch family homes and recent renovations. There are several compounds in the immediate area as well.

For a buyer looking to get a big piece of property with a pool and who doesn't mind installing a new kitchen, doing some painting, and completing the landscaping this may be the house for you. The Prior owner paid $1,000,000 for this property on September 2005.

If you are a serious buyer I think you should act quickly. I would suggest making a cash offer with a quick close contingent only on a home owner's inspection within ten days of the agreement. This is a lot of house for the money. Call me, Gary Thomas, 305-766-2642 to see this house. This property will not last long at this price.

Scream -- Not the Movie

I received an email on Friday. I'll let you read it.

Hi Garry,
I just wanted to let you know that also because of your blog, our short
emailconversation and your analysis of the current properties that are on
the market, I fall in love with XXX XXXXXXX, came over, made a (good) offer
and bought it.
Hope to meet you someday in person in KW...
Greetings from a rainy and cold Netherlands,

XXX XXXXXX

XXX had contacted earlier in the month regarding properties he knew by address and asked my opinion on those houses and specially asked "please give your opinion and options of good properties around 500-600k with a possible reduction during negociations."

It happens that one of the properties he was interested in is a former listing of our office. (It was then listed with another Realtor at a significantly lower price.) I had probably at least ten Open Houses at that location over a year's time. I had intimate knowledge of the house and had listened to the comments from several hundred people who had walked through the property. I felt I could give very knowledgeable information on the house's good points and bad point.

I made an appointment and looked at a similarly located property that was equally charming in the same area. I wrote my would-be client an e-mail message discussing the merits of the two properties. I concluded by saying "Both houses will probably still be available when you come to Key West. But properties are selling. My feeling is that people may be thinking we are near the end of the down market and they don't want to wait until it swings back up and miss the bargains. Again, thanks for reading the blog and call me when you get here. Bring lots of cash!!!"
(I had sent him a list of other properties in his price range earlier with comments.) After reading my e-mail he responded and thanked me for my advice: "Thanks for your quick reply. I am planning to coming to KW in a month to make decisions. Maybe we can make an appointement to discuss serveral options."

I did not have a Buyer-Broker contract with the would-be buyer. And it may be that he thought he had to deal with the listing Realtor or that if he dealt with the listing Realtor instead of through me (or another Realtor) that he would get a better price. It doesn't work that way folks. Every Realtor hopes to sell his/her own listings because they make more money. But in reality the great majority of sales are co-operating sales between two offices (or sometimes between two agents in the same office).

It's ironic that perhaps it was my recommendation that led to the pending sale of this property. When our office had the property it was priced $216,000 more. The owner encouraged me to hold Open Houses to show his property. But he disliked my bringing information sheets on comparably priced homes in the Old Town area for buyers to see. He told me it was my job to sell his house, not to solicit clients. One time he even hid my information sheets. (I quit doing open houses for him by the way.)

Such is life in Key West. Sometimes I feel like the guy in the pic above.
Please, no more well intentioned would-be buyers who want to pick my brain (such as it is). But if you want to buy a place in Paradise, I'm still open for business and willing to help. Call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

CLICK HERE to search the Key West Association of Realtors mls database. This database is maintained in real time. The listings you see and the prices shown are the real deal--not stale info like you may see on other search engines. Don't waste your time searching elsewhere. If you see something you like, please call me.

Time Waits for No One.

I have been getting phone calls and e-mails from people who have been reading my little blog. A lot of people have decided that now is the time to start looking at buying something in Key West. Like a lot of Realtors I have been showing properties to potential buyers. And I have tried to impress on prospective purchasers that now is the time to make your best offer. For the most part the prospective purchasers pack their bags and head back home thinking time is on their side and that they can come back to Key West a few months from now and get a better deal. Maybe they can.
But maybe the deal they could have got will be sold by then.

This week several of the properties I have mentioned in my blog and in personal phone calls or emails to potential buyers went under contract. Real estate in Key West isn't like real estate elsewhere. There are some properties that are so unique that, well, they are just that: unique. The unique character could derive from history, construction, location, view, or price. Time waits for no one. Sometimes you get just one shot at buying something unique. Sometimes the misfortune of others makes the opportunity to buy something at a bargain price seem like there must be something wrong with it. So potential buyers hold back and try to over-analyze the deal. And then somebody snaps up the property.

When I worked for the Resolution Trust Corporation in the early 1990's I could not buy any of the real estate that the RTC was selling. A lot of folks back then waited for prices to drop further. The country was in a recession, and people were afraid to commit to long term investment. Those with vision and money that bought from the RTC got to participate in one of the greatest redistributions of wealth in our country's history. And that is what it was: a redistribution of wealth. One group of owners transferred their holdings to another group who bought at a huge discount. The real estate had not lost its intrinsic value. But it had lost its allure.

That same scenario is playing out again, right now, here in Key West. The property being offered is different, however. The bargains are not unfinished subdivisions, or office parks, or hotels, or golf courses. Today's bargains in Key West are homes, condos, and some commercial properties. But there are so many properties on the market that many potential buyers are afraid to commit. And many of the properties that are being aggressively marketed are short sales and foreclosures. The absentee banks and asset managers are getting a little better at responding to offers in a timely fashion. And I think some have a sense of doom and gloom and are making some aggressive business decisions on sales prices. They aren't giving away the farm--yet. But I sense they are responding to good faith offers in a positive manner.

If you snooze, you lose. CLICK HERE to search the Key West mls database. If you see something that looks good, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

508 William Street Old Town Key West

This one-of-a-kind Old Town house at 508 William Street is waiting for someone to make it a home. The property was completely renovated over a three year time period by JJ Fairbank Construction. This beautiful home features Brazilian cherry floors, high ceilings, crown molding and custom built French doors throughout. The gourmet kitchen is equipped with soapstone counter tops and professional stainless steel Viking appliances. The bathrooms are spectacular with large walk-in showers and Waterworks fixtures. There is off street parking, a covered loggia, and a heated pool. CLICK HERE for more photos and information on 508 William Street.

This smart and slick home is located three blocks from Duval and two blocks from the Historic Seaport. It has 3 bedrooms and two large baths. The rear of the house is brand new construction. There you will find the master suite with vaulted ceilings in both the bedroom and bath. And there are decks on either side of this area. The entire second floor is another master suite with sensational views of Old Town.

Let me show you this house. You will be very pleasantly surprised. The home has 1939 sq ft and sits on a 3346 sq ft lot. The house was just reduced from $1,999,000 to $1,549,000 or $799 per sq. ft. That is value. This house would have sold around $1000 per sq ft 3 years ago. But that was then and this is now. This is a good price on a beautiful home in a very desirable neighborhood. This is what you have been looking for.

CLICK HERE to preview all current Key West mls listings and then call Gary Thomas 305.766.2642 to schedule a showing of your new home in Paradise.