826 Olivia Old Town Key West -- Short Sale

I wrote about 826 Olivia Street a while back. I am totally surprised that this little gem has not sold because it is so sweet. Let me tell you the negatives before I expound on the positives. It has no off street parking, there is no pool or room for one, and it is located across the street from the Key West Cemetery. Oh, the house next door to the east isn't as cute as it could be. (But the house directly behind this home is gorgeous and it is on the market for $2,595,000.)

This charming home, with extraordinary ambiance and comfortable, convenient floor plan, is located in Old Town Key West. Upon entering the large Great Room, with soaring wooden, beamed Cathedral ceilings and wood floors, you view the landscaped yard with deck, patio and Jacuzzi. The windows, and the French doors on 3 sides, make this space spectacular! The kitchen, which is open and airy, lends itself perfectly for entertaining, is all new with wood cabinets, stainless steel appliances, granite counters and tile floors. The bathroom, also all new, features granite counters, neutral tile and new cabinetryIt is now offered at only $645,000 or $640 per sq ft. This is a short sale so you may be able to negotiate an even better deal. CLICK HERE to checkout what the listing Realtor/Owner says about this property.

The property has been successfully rented as a seasonal vacation rental. CLICK HERE to see the vacation rental company's website for the cigar maker's cottage.

Want to see this little charmer? Call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

Million Dollar Short Sales -- Key West

There are currently 222 Key West single family homes priced at $1,000,000 or more. Six of those properties are shown as either potential Short Sales or Bank Foreclosures. CLICK HERE to checkout each of the properties.

I have written about a few of the properties previously. I think there are some real buying opportunities on some of these listings. The house at 1021 Johnson for example is located on one of the most desirable streets in the Casa Marina Area. It is flanked by many multi-million dollar homes that will only continue to increase in value as the years pass by.

The home at 3500 Flagler Blvd. is listed at only $1,200,000 ($420 per sq ft) for a 4 bed 6 bath home with a pool that sits on a 10,312 sq ft lot. Its' kitchen is pictured to the right.

The house at 716 Olivia Street could make you cry. The beautiful Arts & Crafts home was renovated by a friend who is also a Realtor. He put so much into the house as far as quality and workmanship that he was not able to finish the project. That makes it difficult to sell a house in this wicked environment. So the house just sits there. Undone. If you go inside you'll see the beautiful floors, woodwork, cabinetry, custom tiles, elegant light fixtures that were so thoughtful introduced into this property. The house is listed at $1,995,000 or $845 per sq ft. It's going to take some money to finish the house. But a smart buyer ought to be able to negotiate a good deal on this property because of the shortfalls.

Then there is the big house at 23 Sea Lore Lane on Shark Key. It is offered at $1,650,000 or $628 per sq ft. The 4 bed 3 bath home sits on the water amid many multi million dollar homes. How often do you get a chance to own a waterfront home in Key West for that kind of price?

And finally there's that sweet little house on Seminary Street with a nice pool and lots of charm. It's offered at only $1,000,000 or $697 per sq ft. The house has 3 bedrooms and two baths.

The houses on the click list are those whose Realtors have shown them as Short Sale or I identified as bank owned. But there are more properties offered that are "financially challenged". I would suggest that if you are looking for a deal on a larger home that you consider looking at one of these properties. The asking prices are just that: asking. Short Sale prices can be negotiated between the seller and the buyer. The lender will ultimately decide whether to approve the deal or not or perhaps offer a compromise price. This may be your opportunity to buy a big house for a small price in Key West. Please call me, Gary Thomas, 305-766-2642, or e-mail me at kw1101v@aol.com if you would like more info or if you would like to schedule a showing.

$3 Million Bathtub

(Carnac holds the sealed envelope up to his turban)
CARNAC: Three Million Dollar Bathtub.
ED McMAHON: Three Million Dollar Bathtub.
(Carnac rips the envelope open and removes the card)
CARNAC (reading): What your friends call your private town home pool.

The other day someone asked me what I thought about current property prices in Key West. I responded that they are still too many properties that are way over priced on a per square foot basis. I was referring primarily to the new generation of high-end luxury condos and town homes built or being built in the Old Town area. I have mentioned specific developments before and discussed the merits of the properties. I even offered to show them to prospective buyers. But no one has taken me up on my offer. I think the reason is that the properties are priced too high.

Most of the new developments are located on or very near the water, and that location supposedly justifies the very high asking prices. Santa Maria on the south end of Simonton Street has a slew of units still unsold. Unit # 16 is priced at $1.5 million or $1587 per sq ft for a 2 bed, 2 bath unit of 947 sq. ft. Shared pool here. On the opposite end of town at the new Key West Harbor Condominiums where you can buy unit WU#101 for $3,120,000 or $1,472 per sq ft for a 3 story 3 beds 4 baths on the waterfront. The views are spectacular and the finishes proposed look amazing.(Shared pool, however, at these prices.) There are several units at the Steamplant still available and a few owner re-sales. The least expensive (an owner resale) is unit #10, and it is priced at only $2,950,000 or $717 per sq ft. for 3 bed 4 bath unit with its own private rooftop pool. (Each of the 19 units has a separate pool--but not a big one. Photo of a pool is shown above on the right.) The Steamplant was designed to provide the very best of everything, and the offering price reflects the developer's view of the value being provided. There are several smaller new town home developments in the Old Town and Casa Marina Areas. Only the Washington Street Residences in the 800 block of Washington has actually sold out or nearly sold out. One six unit town home development in Old Town with individual pools, and priced at $1,850,000 or $1057 per sq ft, has yet to have one sale since it went on the market 16 months ago. The town homes are being rented out on a nightly basis. So much for preserving the value of your collateral Mr. Banker.

It amazes me that none of the banks that funded the construction of these properties has foreclosed yet. (I'm not including Steamplant because it is not complete.) Maybe the banks truly believe the units will sell for the prices being asked. Maybe. Or it could be that the developments were constructed using the funds of the builders and that no banks were involved. If that's the case, I beg your pardon.

Or maybe the banks have enough funds left in the construction loans to fund interest payments for several more months. But maybe the banks are just postponing the day when they will be forced to foreclose on the mortgages and take back the properties.

It is not just one bank that is doing this. I am not aware bank action to take possession of its collateral. The banks are in a difficult position. If they start telling their borrowers what to do and how to price the properties (e.g. price the units more realistically), the banks set themselves up for lender liability defenses of lender interference. By funding more interest and allowing the obligations to grow larger the banks may also see a defense that the banks should have intervened earlier thereby mitigating the loss. So no matter what happens the attorneys for the developers will try to convince a judge or jury that the bank should be held responsible for any short fall on the loans.

There are a lot of smart readers out there. Checkout the Monroe County Property Records CLICK HERE. Just see how many of the new generation of luxury condos or town homes with individual pools and high end finishes have sold in the past two years. (I'm talking about units priced anywhere from $1.8 million to over $3 million.) They are not selling. There is an over supply of such units. There are no buyers for such units at the price points being asked. Not in today's market.

I think this is what is going to happen. Bank examiners are going to require the banks to write down loans on some of the new Key West developments. That will force the banks to acknowledge the potential loss and either start foreclosure or workout a settlement with the borrowers to take back the properties. Once the banks acquire ownership of the properties they will either sell entire developments en mass at a huge discount or place individual units on the market with a liquidation strategy to sell all of the units within a defined time frame.

What is going on cannot continue. Prices are too high. Buyers are not buying. Banks are behaving imprudently. The other show will drop. That's my opinion, anyway. That's one of the great rights we have as Americans: the right to express our opinion.

That being said there are some good deals in Key West. There are many re-sale condos and town homes available in all areas of Key West at many price points. Many of these units are listed as short sales so there may be an opportunity to buy a vacation getaway at a bargain price. True you may not have your own private rooftop pool, but you will probably have many of the same amenities at a helluva lot less money. CLICK HERE to search the Key West Association of Realtors mls website. If you see something you like, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

Mid-Life Crisis -- Short Sales in Key West

I don't think I am overstating anything when I say we are having a crisis of "short sales" with so many homes listed for sale in Key West. Many, many of the homes and condos are short sales. And some of the really cherry deals are offered not in Old Town, but in the Mid Town and New Town areas.

Most of the homes built in Mid Town and New Town were constructed in the 1960s and 1970s. They are typically ranch homes constructed of stucco over CBS (concrete block structures). The neighborhoods are family neighborhoods like you would find in most suburbs across the country built during the same time. Some of the homes are even located on canals that connect directly into the Atlantic Ocean.

CLICK HERE to checkout seven homes with three bedrooms and two baths priced under $540,000 that are listed as either short sales or bank owned foreclosures. Many of these properties were purchased between 2003 and later at prices significantly higher than the current asking price. And probably every house flooded during Hurricane Wilma. That was an aberration because these areas had not previously flooded during any hurricane. But they did flood. If you buy such a property you must inspect it and accept it in its present condition. Neither the seller nor the lender that releases the existing mortgage will give any warranty but will specifically disclaim any future liability with respect to the purchase of the property. These homes are "as is, where is" sales. That does not mean the houses are dangerous. It means you better know what you are doing before you do it.

And just like in regular real estate sales the buyer can offer as much or as little on a short sale or bank foreclosure as he or she wants. It is best to make an offer that is not contingent on obtaining financing or selling another property. Keep your offer as clean as possible. The asset managers at the banks have a narrow focus so it is best to keep it simple.

The photos to the left are of some of the homes on THIS LINK. Take your time and check them out. There may be a Key West home in your future, expect instead of being that charming little cottage on a secret Key West lane it may be a 1970s ranch on a cul de sac or located with a canal for a backyard.

If you see something you like please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. Let somebody else's crisis be your windfall.

Classic Key West Cottage -- Short Sale

The Classic Key West Cottage located at 926 Southard Street was justed reduced in price to $535,000 and may now become a Short Sale. A Short Sale occurs when the contract price agreed upon between the buyer and seller is less than the amount owed to a lender, and the lender agrees to accept a discounted payoff upon receipt of less money than is actually owed. The one bedroom one bath cottage is located next door to the famous Five Brothers Grocery and Sandwich Shop in the heart of Old Town. This is a killer location folks.

The cottage is small, but it has just about everything else many second home owners require. This cute one bedroom, one bath eyebrow has been updated with new kitchen, beautiful wood floors, and a tiled bath. Step out into the surprisingly large rear yard with new pool and lots of privacy. A loft above the living room has plenty of extra storage capacity. Great monthly vacation rental history and future bookings available. This property does not have a transient rental license. But you can legally rent this cottage as a vacation rental once a month.

I normally comment about houses being priced too high on a per square foot basis. I'm waffling on this cottage because I see it as a value because of it's utter charm, location, and suitability as a monthly vacation rental. Now the universe of renters for a cottage like this is less than people who have friends or relatives. This is a house for two. Maybe you could have one friend sleep on the sofa or climb up to the loft. I'm kidding of course. But having just one bedroom has limitations. But as long as you are willing to let your cheap friends and relatives sleep on your sofa, it is not a problem. In return you get a cute place that is close to everything.

CLICK HERE for more pics and info. If I were looking to buy a second home in Key West I would compare the benefits of 926 Southard to owning a 680 square foot two bedroom one bath condo at Shipyard for the same price. The cottage has one bedroom. The condo has two. The cottage is a single family residence and the condo is not. The cottage is a classic eyebrow and while the condo development is very attractive, it fails in comparison to the cottage. The cottage has its own private pool, and the condo's pool is shared with hordes of tourists. Do you see where I'm going?

This property was originally listed at $686,000 and now is offered at $535,000 on a Short Sale basis. Give me, Gary Thomas, a phone call at 305-766-2642 to schedule a private showing of this cottage. The place has its limitations, but it has a lot of value in its utter charm.

News We Do Not Need

We live on a small island in the middle of the ocean, and when something happens here news travels fast.

There was a terrible tragedy today at the Key West International Airport. I've been griping for a long time about the insanity of building a new airport when the old one, the one we all love, works just fine. And now this.

GO HERE to read the developing story on the ramp collapse that killed one construction worker at the airport earlier today.

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.