Ripe for the Picking Casa Marina Oceanfront Key West

Sometimes I think I sound too pessimistic about what is going on in the Key West real estate market. I talk about prices going down instead of up. I talk about short sales where sellers potentially (Ha!) owe more money to the bank than the property will fetch at sale. I mention bank foreclosures as sometimes being buying opportunities but I know many readers are scared of a market where there are so many foreclosures already and some dumbass like me predicts there will be more. Why a only a fool would buy into that market. Or is it.

I remember Christmas 2004 and the beginning of 2005. People in Key West were giddy about real estate. Everything was selling, especially things that were not even built yet. It seemed like everybody wanted in on the action. I had this dufus that lived somewhere in the middle of the state call me incessantly about buying in to the Key West Beachside project, the Seaside Townhomes, and the Santa Marina Condominiums. He didn't have any money, however. He wanted to finance everything. I had an appointment to meet him and his wife around 3:00 PM on a Sunday right after Christmas to look at properties. We met in the parking lot behind my office. They had camped there in their camper the night before. But they were in Key West to buy property priced over a million dollars. They both wore cheap grey fleece suits from K-Mart or Target. I did not write any deals for the couple, but he later did tell me he bought two units at Seaside with no money of his own.

Around that same time I started working with a sailor at the Key West Naval Air Station. His mother had just passed away, and he inherited just under $500,000. He wanted to buy some income property in Key West. We looked and found a couple of places that really interested him on Northside Drive. He made a reasonable offer on a legal duplex, but the seller turned him down and demanded full price. I told him not to do it. I said it was priced too high. He said he was thinking of looking in Pensacola as well because some of his buddies had bought a couple of brand new condos up there for what one place would cost here. I told him that there is a huge difference between Key West and Pensacola--mainly that there are thousands of units up there whereas there is a limited supply of properties in Key West. I told him that area will continue to build even more units in the future whereas Key West has a mandated limited growth forced on us by the nature of the island and the restrictions imposed by the State of Florida. He found some realtor up in Pensacola to sell him 3 units. I really, really liked that guy. We went out to lunch a few times (his treat). He even bought me a toy replica of a 1959 Mercedes 300SL Roadster that I used to own and foolishly sold.

Several of the units at Seaside have been foreclosed upon or have been offered as short sales. Many of the units on Northside Drive have also been foreclosed upon or are being offered as short sales. I just visited Realtrac dot com's website to see how many foreclosures they have in Pensacola: 1,817. Pensacola has a population of 56,255. There are 629 foreclosures in Key West with a population of 25,478. The worst place for foreclosures in the US in just north of us in Lee County (Ft. Myers area) where there are 21,137 foreclosures.

The couple in the grey fleece outfits did not lose a dime, probably. They didn't have much more than that invested anyway. The sailor did not lose any money in Key West because I cautioned him not to buy at the top end of the market. I hope he did okay up in Pensacola. But there are a lot of other people who did buy into the exuberant Key West real estate market and the 1,817 foreclosures are proof of it.

CLICK HERE to checkout an ocean view property in the Casa Marina Area. It sits on the corner of Grinnell and Casa Marina Court directly across the street from tennis courts and just beyond the courts is the Atlantic Ocean. The property is being offered as a short sale at $899,000. The seller purchased the property in early 2005 for $1,100,000 and the property is mortgaged. It's a short sale. It will sell for lower than the asking price to someone who has some vision; someone who wants to perhaps build a new house to compliment the other multi-million dollar homes in the area. I see this transaction like buying a building lot with the right to build a new house on a 6455 sq ft lot. We don't have many ocean view properties in Key West. This one is ripe for the picking.


CLICK HERE to perform your own personal search of the Key West mls database. Remember, it is maintained in real time so all information is current as of the time you look at it. If you see something that interests you, please contact me, Gary Thomas, 305-766-2642, or e-mail at kw1101v@aol.com. Maybe you'll find yourself in Key West sooner than you think.

April 2008 Real Estate Sales Report for Key West

There were 23 single family homes that sold in April 2008 for a total of $16,442,000. The one an only short sale was at 1119 Oliva Street that I reported earlier this week. But there were three bank foreclosures that sold. All three sold for about one half of the original mortgage amount. Interesting!

Eleven condos and town homes sold during the same time period with sales totaling $7,612,900. Two of those were bank foreclosures, and both were at 1800 Atlantic Condominiums. The same bank that foreclosed on one unit financed the repurchase by a new buyer. (It was my customer and he got a great deal.)

There are a total of 59 homes, condos and town homes currently listed as contingent or pending. That means there are binding contracts between seller and buyer that may either have some condition that needs to be satisfied or that is just waiting to close. Interestingly, 46 of the properties are listed as contingent/continue to show or contingent/kick out. The Key West Association of Realtors requires that property listings be changed from "active" to "contingent" once a short sale contract has been accepted by the seller and is pending approval by a lender. It looks to me like a significant number of the contingent sales are short sales awaiting lender approval.

Our mls system does not automatically sort short sale or bank foreclosure listings. So it is necessary for a Realtor to make a search of all listings for language that denotes short sale or bank foreclosure. And some Realtors are entering erroneous information into the mls database. So our database is not exactly 100% correct. We did a manual search of the 1154 active residential listings and of those about 250 are listed as short sales. That is scary.

There are way too many properties on the market right now. Many of the pre-foreclosure properties are condos or town homes and are being listed as short sales. Many of those properties were purchased in the past three or four years and most of those were purchased with little or no money down. That means the "owner" has no money invested and no commitment to the property. Many of those same properties have declined in value and are not worth what they owe. It is no wonder that owners are walking away. That exodus is driving down the value of other similar units. Home owners who purchased their properties years earlier are unaffected by the price decline as long as their basis is at par with the current market value. They just missed the opportunity to gain from the huge price increases that occurred prior to the bubble burst.

I think we will see continued downward movement on prices overall until the remaining homes condos - town homes are foreclosed upon. I know there are many more properties that will be foreclosed upon and I anticipate more downward pressure on prices as a result.

The banks are keenly aware of what is transpiring. They are playing a numbers game. They do not have an emotional tie to their real estate assets. Their only commitment to Key West is that they either own or will potentially own a foreclosed home or condo. The goal of the banks is to recover as much on the sale of their assets as quickly as possible. That is is. A good Realtor can help a buyer find a short sale or bank foreclosure and turn a bad deal into a good deal. Not all short sale properties are good deals. And certainly not all foreclosures are good deals. Low price does not equate in any way to some piece of real estate being a "deal".

I still think that there are some very good buying opportunities in Key West, especially in the Old Town area, Casa Marina, and Meadows areas. The topsy-turvy market is driving down the asking prices of properties that are not under distress. And that creates opportunities for prospective buyers. If you are interested in buying a home or condo in Key West please consider calling me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

Casa Marina Short Sales

Last week I cautioned that Short Sales may not be all they are cracked-up to be. So today I am touting two Casa Marina Short Sales just to tease you. But who knows, you may be in the 18% of buyers lucky enough to actually close a short sale. Read on and you may be enticed to give it a try.

1712 Laird Street is a wonderful renovation of a concrete block house with high open ceilings, open floor plan and French doors that lead to a large deck and beautifully landscaped gardens. There are 2 bedrooms, 2 beautiful baths with a study that can be used as a third bedroom. Shell stone floors through out, walk-in closets and plentiful storage, central air, stainless steel appliances, beautiful hardwood counter tops and a good sized laundry room. Handsome privacy fencing, off street parking and plenty of room for a pool. The asking price has been reduced to $629,000 or $419 per sq ft. I suspect the sales price will be lower indeed.

CLICK HERE for more info and photos of 1712 Laird Street.

I have written before at 1116 Seminary. The asking price is $1,000,000 but I suspect the seller will accommodate any reasonable offer. The seller has no equity to preserve. Renovated three bedroom two bath home in Casa Marina area close to beaches and Old Town. Amenities include bamboo wood floors, cherry cabinets, granite counter tops, tumbled marble baths, heated pool and off-street parking. CLICK HERE for more info and photos.

A short sale generally occurs when the Seller's net sale proceeds after payment of customary closing costs from the sale of real property are insufficient to pay outstanding mortgage and /or other lien(s) in full at closing. Typically, a short sale seller is in default of loan or lien obligations and is able to document the financial inability to meet ongoing repayment obligations. A short sale is not a sale that occurs quickly. Short sales take a lot of time because the third party lender must go through a series of exercises to determine whether the price is reasonable and whether the borrower is financially unable to repay the mortgage. But for those aspiring buyers willing to spend the time and effort to go through the process the reward can be fruitful.

Want to see either of these homes? Please call me, Gary Thomas, 305-766-2642.

A Short Sale that Worked

I made several entries in my blog suggesting would-be buyers to consider purchasing 1119 Olivia Street in Old Town Key West. The legal two story duplex had been throughly remodeled within the past couple of years and had evolved into short sale opportunity. The original asking price was $1,275,000 in March 2007, but finally ended up at a paltry $570,000. The property sold yesterday at $550,000. CLICK HERE to see what you could have purchased in Old Town if only you had heeded my suggestion. I did show the property to several prospects that were looking for a bargain. The same seller (who is also Realtor but not a personal friend or colleague) has other short sale properties on the market.

I just did an mls search of Active Single Family Homes in the Old Town, Meadows, and Casa Marina Areas priced under $1.8 million. CLICK HERE to see the homes that I think are either bargains or good buys. A couple are short sales, a couple are bank owned, and a few are owned by sellers who just want or need to sell. A few of the latter may seem priced high on a per sq ft basis, but I suggest that an active buyer look at what the properties have to offer in evaluating the asking price.

CLICK HERE to perform your own search of the Key West mls. If you see something that interests you please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com to schedule a showing.

8 Passover Lane Old Town Key West, Fl

I have often written about the virtues of living life on one of the slow lanes of Key West. Well, 8 Passover Lane is about the slowest of the slow lanes as possible. It is so slow that it is really just walkway about 6' wide that provides access to the three cottages on the lane. I can see some readers thinking I must be nuts. But read on.

This is how the listing Realtor describes the home: "Absolutely perfect story book cottage in one of the most desirable locations in Old Town. Step onto the rocking chair front porch and open the front door to the main level open floor plan with a large living/dining room and beautiful kitchen with custom cabinetry, granite counter tops and stainless steel appliances. Also on the first floor is the master suite w/vaulted ceiling, master bath and French doors to the rear deck,a cozy study/bedroom with built-in day bed and adjoining full bath with French door to private outdoor shower. Upstairs is a large guest bedroom with sitting area and half bath. Outdoors is a nice sized yard with heated small dipping pool and tropical landscaping. Beautiful turnkey property in absolute pristine condition."

Every once in a while a listing Realtor will refer to a new listing as a "quintessential Key West cottage" and that is exactly what this property is: the most perfect embodiment of the Key West cottage. I guess I'd describe it this way: you walk down the little lane and spy the mystical mailbox notifying you that you have arrived at 8 Passover Lane. You look to the front porch where you see the sign that you have indeed arrived "Paradise Found". Then you see the rocker on the front porch inviting you to seat yourself. Then you open the front door and enter into another world. A world far from the madness that has become the daily life up north in America. The place is done to a Tee, but not over-done. You just feel at ease. At home. In fact there is a sweet little sign over one of the doors that says it all Home Sweet Home. There isn't anything cookie cutter about this cottage. Everything, every view, every last detail is unique.

This two story dream house can be yours for $799,000. It is 1120 sq ft and sits on a lot that is 2349 sq ft. So the asking price equates to $713 per sq ft. They didn't make a lot of these cottages. In fact this is the only one. That's why it is so special. So desirable.
CLICK HERE for more detailed information on this charming two story cottage and additional photos. But understand you must see this living doll house to appreciate it. There is not another like it in Key West. Not at this price, anyway. There are some equally charming homes, but they are all priced much, much higher.

Want to see this property? Please call me, Gary Thomas, 305-766-2642, or e-mail me at kw1101v@aol.com. This is the place everybody dreams about. But only one person gets to own it. Maybe that person will be you.

Recognizing a Real Estate Bargain In Key West

I just Googled "recognize a bargain" and up comes this incredible blog written by fellow Realtor Dan Melson from San Diego. CLICK HERE to read the item in full. It is worth your while, especially since I agree with what he says. lol!!!

The premise of his treatise is that his services as a Realtor are valuable because he has years of experience that enable him to help a buyer find a genuine bargain.

Melson says "The ability to recognize a bargain property is a valuable skill. If you disagree with this, what reason do you have for looking at properties before you buy them? Why don't you simply pick out the cheapest property that meets your specifications on MLS, make an offer, come to an agreement, and pay the price, all sight unseen? Remember, you're claiming that the ability to recognize a bargain does not have value. Why would you want to take the time to look if there's no value in it?When there are ten thousand identical items in a warehouse or on the grocery store shelves, you grab one and get on with your life. You might look at the label to make certain it was manufactured to fill the need you have. You don't bother opening the box - if it's defective, you can just exchange it for another. They're all interchangeable."

Then he comes up with a terrific and easily understandable exposition: "But that isn't the case even on everything in the grocery stone. There's a reason they wrap meat in transparent plastic - so you can see the piece of meat you're buying. To view the cut, how much fat is on it, how large a piece of meat it really is, how fresh it is - in short, the value of the meat. If you know what good meat looks like, you've seen people that have no clue as to what to look for choosing crummy meat that you've just rejected. It happens most of the times when I'm at the meat counter, as a matter of fact. It's why the grocery stores keep putting out bad cuts of bad meat. Somebody who doesn't know any better will buy it."

Public access to the Key West Association of Realtors' mls database is open and free to the public. No need to get sign up with a Realtor to get access. Simply CLICK HERE and you can search all real estate listings from Key West to Key Largo. But using the database only gets you a list of properties.

I often add tags like "bargain", "value", or "locational value" to attract readers looking to find great buys. But I agree with Dan Melson that bargain and cheap price are not the one and the same. Tags only attract attention. I try to provide an explanation of why a particular property is a bargain or why one location is better than some other location so that a potential buyer will see the merit of my position and appreciate the value of my experience. I know I have written on several occasions that everybody in Key West is an expert on real estate, because everybody knows what every piece of property costs or sold for, and now who is losing his home in foreclosure. But knowing the price of a piece of property is only the start.

I've written before about one of my best (or worst) learning experiences that occurred almost 30 years ago. I had a bunch of cash and wanted to buy a new (actually old) house on Clermont St. Parkway in Denver. The house looked like something out of a storybook. I made a low bid, all cash offer which went down with a thud. The seller refused to even respond. I went around my Realtor and called the seller up. I offered to pay full price. He said I was an idiot and said he would refuse to sell even at full price. I got the message. And ever since then I have counseled buyers from making the same mistake. If you see something you really like and want to own, make a good faith offer. Low ball offers are fine on run of the mill condos, but if you want to buy something that is really special, treat the seller with respect or you run the risk of losing the ability to buy the property like I did.

There is a lot of junk for sale in the Key West real estate market. A few years ago people were fighting to buy that junk. Now many properties sit vacant--either foreclosed upon or even abandoned knowing they will be foreclosed. There are some good deals to be made on these types of properties. For the most part they are functional. They are not the types of houses that people up in America dream about owning as a second home in Key West. But they can provide good, decent shelter and now at a more affordable price. And there are the occasional properties that come up that are very well located, or have all the bells and whistles, or maybe circumstances require that they be sold quickly and at a huge discount. Both types of properties can be bargains. But it takes experience and knowledge to know the difference between a cheap house that costs too much and an expensive property that is being offered at a very reasonable price.

I encourage would-be buyers to checkout the mls listings CLICK HERE. Get a feel for what is available and what the asking prices are. If you see something that interests you please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

The Fallacy of Short Sales in Key West

A couple of days ago the Key West Association of Realtors held a lunch hour lecture on Short Sales. The attorney for our association conducted the lecture. There were about 110 Key West Realtors in attendance.

There are a significant number of active short sale listings in our market. There are so many short sale offerings that the Florida Association of Realtors and the Florida Bar Association have adopted a Short Sale Addendum that is to be attached to an Exclusive Right of Sale Listing Agreement when a short sale is offered. The form defines a short sale this way: A short sale generally occurs when the Seller's net sale proceeds after payment of customary closing costs from the sale of real property are insufficient to pay outstanding mortgage and /or other lien(s) in full at closing. Typically, a short sale seller is in default of loan or lien obligations and is able to document the financial inability to meet ongoing repayment obligations.

The Association's lawyer cited one ominous statistic that only 18% of the contracts between sellers and buyers actually close (lender approves the mortgage release at a discounted payoff). Assuming his statistics are correct that means that 82% of potential short sales do not close.

I have been promoting short sales in Key West as buying opportunities, and I think they still are. But I may have mislead potential buyers into believing that just because a property is offered at an attractive short sale price that some lender will actually approve a discounted payoff. It is not that simple.

I found a very well written blog on this subject and I hope you will read it. Short Sales - A misnomer AND a Marketing Ploy. The blog and the comments point out all of the downsides to a short sale.

I think Short Sales are a marketing tool, not a panacea, especially in Key West. We have a lot of properties on the market right now because many second home owners and investors are walking away from properties, and short sales are one method of marketing those properties.

High Anxiety? -- 701 Elizabeth St. Key West

In my March 1st blog called "Season's Beatings" I said "Most of the sales that have occurred [recently] are a result price reduction. There is still a hesitance by many buyers who think the market will fall further, especially after Season ends. I agree. But bargain hunters may miss getting the plum properties just to save money. Homes in Key West are not like fungible goods. They are unique. So the smart buyers are buying location and value at a good price. Some people may make good money buying what is leftover at the end of the day." I then said to expect more price reductions because sellers who need to sell now must expect the worst. "When the buyers leave, the party is over till next year."

So Season is done and gone. My prediction about more price reductions is exactly what has happened. Today the asking price on a great property in a great location was just reduced from $1,295,000 to $1,100,000 or $555 per sq ft. That is a very competitive price for being located in the heart of Old Town. 701 Elizabeth Street sits at the top of Solares Hill (hence "High Anxiety" as a title--no inference to anything else is intended). The listing Realtor describes the property this way "Perched atop Solares Hill, the high point on the island, this duplex includes a 2 bedroom 2 bath owner's unit with private heated pool and outdoor shower and a 1 bedroom 1 bath separate apartment that is currently rented for $1300 per month. Designed by Tom Pope and built by Erik DeBoer in 1984, the floors are recovered river heart pine and the windows are shuttered with metal louvers. Includes off-street parking." Key Westers know that Erik deBoer built many quality homes during the 1980s (this one happened to be his own residence for a while).

This property is another one of those buying opportunities I have written about: quality property, great location, good price. Think back four years ago when buyers were falling all over themselves looking for deals. Here's a deal people. CLICK HERE for more details on this property and more photos. Then please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

23 Whistling Duck Key West Golf Club - Bank Owned

There are two ways to look at bank foreclosures: (1) dumps that nobody in their right minds would buy or (2) buying opportunities. I think the 3 bedroom 2 bath 1060 sq ft condo at 23 Whistling Duck is located in the Nature Preserve area of the Key West Golf Club Development is a buying opportunity. The property is bank owned so we already know we have a motivated seller. The asking price was just reduced to $364,900 or $344 per sq ft. The property is vacant and easy to show. If potential buyers get pre-qualified through Countrywide Home Loans to purchase this (or another Countrywide owned property) they will receive a free appraisal and credit report if buyer finances through Countywide. I'm not a pitchman for Countrywide. But it is sweetening the deal for would-be buyers.

I'm cheating on this listing because the pics above are of the property when it was listed by the previous owner. He paid $753,000 in July 2005. Fast forward to today and the asking price is around $300,000 lower. The actual sales price will most likely be even lower. CLICK HERE to see more info about the unit and see photos of how it looks today. Don't worry it's not all messed up or trashed. This could be a sweet deal. Other units in the same area are priced much higher. CLICK HERE to see what other similarly sized and located units are priced at in today's market.

If you would like to see this unit up closed and personal please call me,Gary Thomas, 305-766-2642 to schedule a showing. It isn't my listing, but it is my job to help people find good deals.

823 Johnson Lane

It is really unfortunate that it is coming to this. Good people with dreams of making something nice and creating a future for themselves are seeing those dreams being dashed through no fault of their own. The sad fact is that now even homes in the Old Town area have been dragged down into the Short Sale pool along with so many properties in the Mid Town and New Town areas that were over priced when they sold 3 or 5 years ago.

The beautiful home (and it is a home, not a house) at 823 Johnson Lane is located in Old Town Key West. It sits midway between the landmark St. Mary's of the Sea Catholic Church at the corner of Windsor Lane and Truman Avenue and the City of Key West Cemetery one full block to the north. Johnson Lane parallels Truman and runs easterly off Windsor Lane.

The home is a newly constructed two story home. The photos speak for themselves about the quality of thought, design, craftsmanship, cabinetry, tile & marble, quality finishes, and top of the line appliances that went into the construction of this home. The kitchen is not only beautiful but also user friendly. It is a cook's delight! The living room has a working fireplace to take off the chill on the one day a year it gets chilly in Key West. The loggia by the pool is as hip as all get out. Upstairs there are two incredible bedrooms and each has an incredible bath. CLICK HERE for more detailed information on this property and additional photos. Well worth the look even if you are going to buy.

The property was originally listed at $2.6 million and was reduced on April 18 to $1,875,000 or $1,050 per sq ft for this very high end 1785 sq ft home that sits on a 3091 sf ft lot. Very few homes in Key West are worth over $1000 per sq ft. This is one of them. If you would like to schedule an appointment to see this property please call me, Gary Thomas, 305-766-2642. I think this is a real buying opportunity. This is not a short sale.