Six Months Sales Report for Key West

I've said before that I am no statistician. I did failed miserably in algebra. But I got an "A" by being able to distinguish "Up" from "Down".

I always go back to 2005 to use as a comparison point to current market activity. In 2005 there were 197 single family home sales in Key West (Key West to Shark Key) during the time period of January 1st to June 30th. The least expensive house sold for $200,000 and the most expensive went for $6,950,000. In 2008 there were 105 home sales with the least expensive selling at $210,000 and the highest going for $4,667,055. But the overall sales volume is the clear indicator of what is going on today. In 2005 single family home sales totaled $236,620,239 for the first six months. During the same period in 2008 the sales amounted to $91,786,605. If I did my math correctly that means that the 2008 single family home sales are down 61% from what they were in 2005. Ouch!

In 2005 there were 173 condo and town home sales between January 1st through June 30th with sales totaling $120,736,398. The cheapest unit sold for $160,300 and the most expensive sold for $2,300,000. During the same time frame in 2008 there were 75 such sales totaling $36,357,096. The least expensive unit sold for $114,484 and the most expensive went for $1,700,000. This is the really scary part: condo and town home sales are down 70% from what they were in 2005.

Our mls database doesn't distinguish between short sales and foreclosures from other "market" sales. I did a very quick scan and found 18 of the condo and town home sales during the first six months of 2008 were such sales or 24% of sales for that period. The bad thing I see from this is that those sales seem to be driving the market sales activity downward. If I am wrong,I am sure somebody will point out my erroneous conclusion.

There are 102 current residential listings (single family, duplex, and condo / town home) shown as contingent, contingent/kickout, or pending. Of those, 61 are short sales and 7 are bank owned foreclosures. That means 60% of our contingent and pending listings are distressed sales. Oh, there is one very opulent mansion under contract on Sunset Key that is listed at $5.1 million. The seller: The United States Government. I guess that could be classified as distressful!

A year ago today I wrote in this blog about where the market was at at that time. CLICK HERE to read what I wrote then.

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

My suggestion: if you are a seller and you don’t need to sell now don’t list your property for sale. If you must sell now, price it correctly. Don't tell your Realtor the sales price. Have the property appraised by a qualified independent appraiser. Then price it at appraised price. Don't play games. If you are a buyer, now may be a good time to buy. The market may not have totally bottomed, but good properties will get purchased before the dregs. Get the right property at a price you feel comfortable with. Do not buy cheap properties because they are cheap. You will regret it.

CLICK HERE to checkout the Key West mls database in real time. If you see some property that interests you, please contact me, Gary Thomas, 305-766-2642, or e-mail me at kw1101v@aol.com.

Edifice Rx

Perhaps I have been sounding like the prophet of doom and gloom. That is not my intent. I think there are some really good values available in Key West right now--especially in the mid-range, but also some very nice big homes that are priced very well.

I decided to show you two photos of a neighbor's house. The house is two blocks from mine. That means that house is two blocks closer to the beach. It is located on one of the best blocks in the Casa Marina area. In fact it is a short two block walk west to the Casa Marina Resort or a two block walk south to the Atlantic Ocean.

The previous owner of the property (when it was a mid century ranch) was a dear friend. He passed away a few years ago, and his estate sold the corner lot to an investor for $1.4 million in January 2004. The investor resold it in February 2005 for $1.850 million. The lot is 11,441 square feet. The present owner paid about $162 per sq ft for a buildable lot in a prime location.

Then the new owner built an edifice. I'm not griping. I like it. It just dwarfs most of the nearby houses--most of which are also big. It is just bigger. Decide for yourself. In a years time the trees and shrubs that look so small will be giants. I don't know how it happens, but plants and trees thrive in Key West.

I have no idea how large the new house is. The tax records don't even show that a house exists yet. Lucky owner! I think the construction of such a large edifice is a testament to the belief the new owner has in the long term viability and value real estate in Key West. I boo-hoo about declining property values and foreclosures. I wouldn't touch a lot of 'em. But there are some real deals right now. There is still a lot of building going on in Key West. But there is not as much as there was in 2005-2006.

The Casa Marina area is a very friendly neighborhood. Everybody walks their dogs. We even have a beach for the dogs--doggie beach CLICK HERE. You can join the Casa Marina Beach and Gym. The hotel has undergone extensive renovation. I'm going to join there when my present gym membership expires. CLICK HERE and ALSO HERE for pics of the beach and pool at the Casa.

If you have a Edifice Complex and want to own your own edifice in the Casa Marina area CLICK HERE. If you see something you like please call me, Gary Thomas,305-766-2642 or e-mail me at kw1101v@aol.com. I may be able to help you find the prescription you need.

Bank Owned Condos in Key West

The good news is that there are only 14 active Bank Owned condos and town homes for sale in Key West. The bad news is that there are undoubtedly many more on the way. As of June 27, 2008 the Key West mls shows a total of 345 active condo and town home listings for Key West and Stock Island. I just went through the active listings one at a time (our mls programmer can't figure out how to search for short sale or bank owned properties as being different from non-distress listings). Most of the active listings are short sales followed by properties that are Realtor owned.

Here is an example of what I see that is bringing down the price of many condos and town homes. Unit "A" is a 2 bed 1 bath town home constructed in 1995 in a Planned Unit Development with all the frills. It was resold in January 2001 for $199,900. The post housing bubble occurred and property prices and property values rose through out Key West until the end of 2005 when the decline started. The same Unit "A" sold for 101.20% of its asking price ($415,000) in the year 2004 at $420,000. It was listed for sale in August 2007 at $335,000 and it was offered as a short sale. Unit "A" sold and closed on March 28,2008 for $275,000. In three years the property declined in value from $420,000 to $275,000 or about 35%. Many of the Units in the same development sold in 2005 at over $500,000. What happened to Unit "A" is a typical example of what happened across Key West. It is not the exception.

People who bought properties in the period between 2001 through 2005 paid market prices. Many obtained close to 100% financing. And for those that didn't get 100% financing, many financed their property acquisitions for less than a 20% down payment. The market declined and values fell. This decline created a disincentive to continue making mortgage payments on a property whose loan amount is higher than its value. So homeowners started walking away. In droves.

That is how I explain why the majority of condo and town homes being offered are short sales. I am betting that many of the short sales that do not get sold will become bank foreclosures.

Look at it a different way. Let's say you bought a town home in 2005 for $550,000. Your next door neighbor just sold the same size unit in the same condition as yours for $290,000. You were fortunate enough to have had $55,000 down payment so you only had to borrow $495,000. But now your home is only worth $290,000. What would you do? Think real hard for all of 10 seconds. That is why so many condo and town home owners are selling. There is no upside. At least in the short term. When the market stabilizes the people who buy right now will be looked upon as having been shrewd. That is unless the market goes down even more.

Don't buy somebody's problem. Buy an opportunity. Don't buy cheap because it is cheap. Buy good because the price is good. There is a difference. If you are looking to take advantage of the buying opportunities available in Key West please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. I'd be pleased to work with you.

The photos to the right were taken in Key West during the height of the Great Depression. Key West survived it and thrived. We will get over what is going on. There will always be a Key West. These prices won't last forever.
CLICK HERE to checkout the 14 Bank Owned Condos available for purchase in Key West.

405 Willaim St. Old Town Key West, Fl

405 William Street is located on one of the very best blocks in Old Town Key West. Some of the most historic and architecturally significant homes are located on this block. And this home is one for the books.

405 William Street is a two story renovated duplex. That will cause half the readers to stop reading. But wait. There is more. Before it was made into a duplex it was an awesome single family home with truly unique and grand features that would lend itself to being taken back to single family. Or, the home would make a great second home with legal year round guaranteed rental income from the nicely appointed second floor two bedroom apartment.

The main living level is totally unique to Key West and any other house I have ever seen. You enter through a formal entry hall that leads to either of the two bedrooms or two baths or to the living room and the dining area and kitchen beyond. The master bedroom has larger than normal crown molding that set off the high ceilings and formality of the room. There is a large master closet and bath. The second bedroom is also good sized so you do not get that squeezed in feeling so typical in many older Old Town homes. But it is the living room with its arched ceiling that will make you stop and look in awe. The petite French doors in the dining area lead to the exterior porch that overlooks the bricked courtyard and spa area. The recently updated kitchen is at the far end of the house in a saw tooth addition so familiar to Key Westers. The vaulted ceiling and designer touches yank the kitchen right into the 21st Century.

CLICK HERE to read what the listing broker says about this property and see more photos. 405 William was originally listed at $1,595,000 and has been periodically reduced until it reached its current price of $1,195,000 or $436 per sq ft or this
large 2740 sq ft home on a very large 4642 sq ft lot. There is room for a substantial swimming pool in the lightly landscaped rear and fenced yard. And there is off street parking to boot.

This is one of the sweetest homes in Key West. Please call me, Gary Thomas, 305-766-2642 to schedule an appointment to see this property. Since it is tenant occupied at least 24 hours notice is required. The tenants are on month to month rental agreements.

Busted!

One big item in yesterday's news was the arrest of two Bear Stearns hedge fund accounts senior managers charging them with conspiracy, securities fraud and wire fraud. On the same day more than 400 others including Realtors, appraisers, and mortgage brokers were arrested as part of Operation Malicious Mortgage conducted by the Justice Department. Busted! CLICK HERE to read the details on the Justice Department website. The news yesterday said more arrests are on the way.

I want to know when the Justice Department is arriving in Key West to round up the culprits still walking the streets and doing new deals. A couple of months ago I wrote about how mortgage brokers profited from booking fraudulent loans. The Justice Dept. site referenced above says "mortgage frauds employ a variety of tactics including misrepresentations, deceit and other criminal abuses to fund, purchase or insure mortgage loans". It goes on to say "lending fraud frequently involves multiple loan transactions in which industry professionals construct mortgage transactions based on gross fraudulent misrepresentations about the borrower’s financial status, such as overstating the borrower’s income or assets, using false or fictitious employment records or inflating property values".

Some of you know that I used to practice law. I used to work in banks and chased the bad guys from the inside. I never practiced criminal law, but I know a crook when I see one. I know fraudulent conduct and deceit. I know misrepresentation and prevarication. I know the Justice Department needs to come to Key West.

I have repeatedly noticed that certain names keep reappearing in numerous short sales and foreclosures in Key West. Not a few short sales and not a few foreclosures, mind you. But a lot. So I started to do a little investigating on the Internet. I checked out buying agents and selling agents on short sales and foreclosures. I checked out the offices where the agents were licensed when the original deals went through and where the agents are located today. I used the Monroe County Clerk's website to see which lenders financed the multitude of malicious mortgages.

A few select Realtors happened to sell a lot of properties that ended up in short sales or foreclosures. I'll bet the statistical probability of a responsible Realtor selling more than two or three properties that end up being foreclosed upon or offered as short sales in a little burg like Key West would be astronomical. But that is exactly what happened to several local Realtors and real estate investors.

It takes more than one person to pull off a fraudulent scheme. When I saw so many Key West foreclosures with the same names appearing as real estate agent or purchaser (or sometimes both), I assumed that the Realtors involved had figured out how to manipulate the system. They would use a familiar mortgage broker who could package multiple loans to multiple lenders for the same buyer. Mortgage brokers were booking loans for many different lenders. (Most sales were 100% financed with an 80% first mortgage to a lender like Countrywide and a 20% second mortgage to another lender, often times the same company or a subsidiary.) Finding a willing lender was not difficult as long as there was supporting documentation to substantiate the value of the collateral. Enter the appraiser. The mortgage broker used approved appraisers to value the collateral on pending mortgage applications. I am not saying or implying that any local appraisers engaged in fraud. But I think the Justice Department ought to examine the relationship among certain Key West Realtors, real estate brokers, appraisers, and/or mortgage brokers.

"And this is important to me today because?" you ask. I'm seeing some of the very same Realtor names on short sales and foreclosuresof sales the same Realtors handled a couple of years back. Yep. I'm seeing Realtors listing short sale of people with whom they have a very close personal relationship or business relationship. One Realtor (who I will not name) purchased numerous properties with 100% financing. The company where this Realtor's license is hung is now handling some of those same properties as short sales. I wonder if the banks that are being asked to permit short sales are aware of this incestuous conduct. There are more examples of this kind of conduct. This is not an isolated case.

I'm rooting for the FEDS on this one. I'm hoping they come to town looking to bust more "evil doers"to quote President Bush. We are all paying the price for the greed of some very unscrupulous people.

Flipping Out

You can learn a lot from smart people. They usually don't do dumb things. They usually are successful on the things they do in life. Jeff Lewis and his business partner, Ryan Brown, are very smart people. Jeff is a little eccentric. Correction: he's Flippin' Out! He's the lead in Bravo TV's reality show "Flipping Out". GO HERE for more info on the show. If you have not watched it, you must.

During the second season premiere the other night the show replayed a comment Jeff made last season. If you watch the re-runs you will appreciate the merit of what he said: "You either live like me or you want to live like me." Sounds egotistical I know. But when you invest the time and watch as he creates living space environments you appreciate the thought, work, attention to detail, and the demand for perfection that make Jeff's living spaces so appealing.

Jeff's projects have been high end Beverly Hills plazas that he transformed from yuck to bucks, big bucks in fact. Last season he started on a renovation of a hillside house that looked fine to me. He ripped it apart and the finished property was unveiled last Tuesday. It is remarkable. It doesn't look like the same property. It is unique. And that's why I wanted to share this with you.

Later in the episode he has to deal with a know it all owner that knows the cost of everything but not the value of Jeff's expertise (who she hired to help manage her renovation of one of the Dorothy Chandler mansion). The segment deals with hiring a contractor to replace sewer pipe. The owner sees the issue as money--how much it will cost. Jeff sees it as getting the project done correctly and competently by someone he knows and not the cheapest plumber out of the phone book. Competence. Experience. Reliability. You get what you pay for.

Jeff said this about his shift from flipping houses to managing renovations: "It's been a challenging year for real estate since Season One of Flipping Out. The tone of the market has turned to gloom and doom. The lending crisis has dramatically affected the flipping business, certainly in a negative way, but there is a silver lining -- it's an amazing time to buy and there is a lot of opportunity to purchase property as a long-term investment. During the last eight years, we experienced a huge real estate boom as we saw a lot of over-valued junk sell for ridiculous prices. Also during this time, construction prices soared to a level of absurdity, so the recent correction is helping to stabilize a bull market that no economy could sustain."

Ryan Brown (Jeff'ex but still his business partner) has his own design business called BROWN DESIGN. CLICK HERE to go to his website. The photos show the incredible talent Ryan brings to any project. What a talent. Click on the kitchens link for a real treat.

We've had our share of high-end flips. Some were more flops. It takes more than granite, vessel sinks, and Viking Kitchens to make a flip a success. Some people get it right. Most don't. When you walk into a Key West home and turn on the light does it return the favor and turn you on? That is the mark of a great property. Look at the photo to the right of a very successful Key West flip. A client of mine is purchasing this beautiful home.

I say this because there are some really remarkable homes on the market right now in Key West. Like Jeff Lewis said "it's an amazing time to buy". And some people will take advantage of this down market and profit from it and others will "boo-hoo" or say "I told you so".

CLICK HERE to do your own search of all Key West and Lower Keys real estate offerings in the mls database in real time. Then if you see something at interests you, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. You might be a closet flipper and not even know it.

Ready, Set, Go -- 4 Go Lane Key West Bank Owned

There is going to be a race to buy this spanking new listing at 4 Go Lane Key West. "Why a race?" you ask. Here's why. The price-$990,000 or $382 per sq ft. The location-Riviera Canal direct access to the Atlantic Ocean. This 2594 sq ft house has 3 bedrooms, 4 baths, pool, gazebo, separate mother-in-law suite, fireplace, parking for four cars. You guessed it, there has to be a catch. Naturally. It is bank owned. But the local lender is willing to do "creative financing" up to 100 % of the purchase price. There's gonna be a run on the bank, I think.

Here is how the listing agent describes this different REO: "Hidden Oasis! This large waterfront home overlooks Riviera Canal from the spacious deck and pool area complete with covered gazebo. The interior offers a combined living and dining area surrounded by glass sliding doors. A total of 3 bedrooms and 3.5 baths comprised of two bedrooms in the main house along with 2.5 baths and a separate mother-in-law suite with private entrance. Master suite begins on the first floor with dressing room complemented by built-in storage, large closet and vanity. Spiral staircase leading up to a large bedroom with bath en suite and private roof top deck. 100% financing available through First State Bank of the Florida Keys."

CLICK HERE for more info and additional photos. There is a link so you can locate the property on the map if you are not familiar with the location. Otherwise, drive as far east on Flager as you can go. Turn right and head south about 1/2 block and turn right onto Go Lane. You are there. It's a ritzy little neigborhood of about 4 houses all owned by rich folk. This is not schlock. Don't let the price fool you.

This will be gone in a few days at this price, of this is I am pretty sure. If you want waterfront property in Key West for a good price, call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com to schedule an appointment.

1601 Patricia Street Key West, Florida

1601 Patricia Street is located on the east end of the Casa Marina area near the beaches. This 1721` sq ft remodeled ranch 3 bedroom two bath home was recently reduced from $1,195,000 to $1,095,00 or $636 per sq ft. Spanish tile throughout, new bathrooms, new kitchen and tropical landscaping on a spacious 6300 sq ft lot. The living area flows throughout the house with French doors leading to the heated pool and spa. Covered lanai overlooking the pool and spa. The house sits on a corner lot behind a privacy fence and densely planted gardens. The property has off street parking. This home was professionally decorated -- and it shows in every room and in every detail.

Not surprisingly the house next door at 1609 Patricia Street is also for sale. It is priced at $950,000 for the 2 bed 1 bath home of 950 sq ft. The asking price equates to $1,044 per sq ft. This home has all new electrical outlets, new appliances, has been chemically treated for mold, plaster walls -- no drywall, new paint and new Central A/C. This 2 bedroom, 1 bath home is hidden from view by mature, dense tropical landscaping; the property is totally fenced-in. The beautiful custom pool and waterfall, which takes up most of the side yard, has a privacy wall which hides it from the neighboring property. Landscaping and pool were designed by the renowned landscaper Raymond Jungles. The property sits on a double lot. CLICK HERE for more info on 1609 Patricia.

The house at 1601 Patricia Street is our listing. But I'll be pleased to show you both for comparison purposes. The third pic on the right is 1609's pool. The area is quiet and most of the homes have been remodeled in the past few years. So you would be buying into an area of equally valued homes. That is important, no matter where you buy a home.

CLICK HERE for more detailed information and photos of this beautiful home. Then please call me, Gary Thomas, 305-766-2642 to schedule a showing.

Bank Owned Properties in Key West

Every week or so the Key West Association of Realtors conducts a Realtor's Caravan to show new listings to local realtors. The purpose is to let listing realtors show their new listings to fellow agents and to solicit comments and opinions regarding the property and the asking price. Nine houses were on yesterday's Caravan and three were bank owned. Two others were short sales. So over half of the listings were distressed properties.

I had to laugh when I walked into a couple of the bank owned properties. In one house someone had removed the kitchen cabinets and the appliances. It's a shame because someone had been doing a real nice remodel on the house. The house had new wood floors and a nifty vessel sink and custom tiling in the bathroom, but the lack of kitchen kind of hurts a potential sale.

On the otherhand the grand new home at 408 Grinnell Street in the heart of Old Town has every feature you could ever want and all of the work was done correctly. And nobody wants the house even though it is priced competitively. I've seen people pay a lot more money for a lot less of a house. But we are in a new reality in Key West.

The cost of gas has gotten way out of hand down in Key West. So we are using alternative means to tour properties. See photos to the right. But if you want to see any of the Bank Owned Real Estate linked below, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. I'll splurge and use fossil fuel.

714 Windsor Lane a huge house atop Solares Hill that has been partially renovated.

910 United Street has a huge side yard and magnificent trees.

3711 Duck Avenue in New Town.

408 Grinnell Street. A dream home! CLICK HERE for more photos of this exception to the rule about bank owned homes. This is a deal! Somebody is going to own it for a song. Why not let it be you?

518 William Street in the heart of Old Town -- many bedrooms and a possible lockout.

1713 Johnson Street has a pool.

304 Julia Street is a large two story that has been redone. It's nice and clean and has a pool

309 Julia Street. What can I say.

1609 Josephine Street is the house without the kitchen.

1400 20th Street is missing some parts as well.

3575 17th Terrace has a pool and looks really sweet. It has 100% bank financing to boot. I showed this house on Friday. Very clean and newly painted. Great pool and a huge yard if you have kids. There are extra rooms that do not appear on the county tax records--I think.

2005 Fogarty is a small house with a huge yard.

1525 Flagler Avenue is a duplex.

3041 Flagler is a tragic mess.

1212 Catherine is a multi-family.

All properties are Bank Owned. After wrestling that aligator, I can wrestle a banker and make a deal happen.

612 Griffin Lane Old Town Treasure Key West

Way back in February I wrote about a (then) new listing at 612 Griffin Lane in Old Town Key West. CLICK HERE to read what I wrote then.

I got to show the property this past Monday to a prospective buyer who did not want a place with granite, marble, and stainless steel appliances. Griffin Lane was right on target. It is Left-0ver-Hippie to the Hilt. I love it!

The yard is immense and densely populated with all kinds of tropical vegetation and palms a plenty. You walk the path to the wood steps and enter the very large open living - dining - kitchen area. There is a bedroom to the rear and the bath. In the center of the room is a stairway to the second floor where there is another open bedroom with doorway to an second floor deck with a view that is absolutely incredible. I took a couple of photos that appear to the right. They do not do the view any justice whatsoever.

From the second floor deck you look down into the massive yard where there is a second building (a shack with a hole in the roof) but a building which may be allowed to "grow". It is built pretty much on the property line. But the advantage is that you may be able to get permission from the city to keep the existing set backs and increase the usable square footage. A possible usage may be a pool house or a guest bedroom and bath.

Don't let the inside of the present main house scare you. So much of old Key West used to look this way. It's too bad so much of that look is now gone in my opinion. But a new owner will probably want to gussie up the place with more modern amenities. And that can be done.

And what a property you would have if you are the person to buy this secret little treasure that is hidden away from everything and everyone. The "owner" is an estate. The asking price is not cut in granite. The best way to approach this property is to look at it; determine what you think you can do and what it will cost; speak with an architect and contract to see what your vision will cost to bring to life; and then, maybe, submit an offer. CLICK HERE to read what the listing agent has to say about Griffin Lane and see additional photos. Don't let the asking price or the amount of work scare you. You will end up owning a Key West Treasure when this project is done. And I think the actual sales price will probably be much less than you think based on the asking price. Remember,this is an estate sale.

If you are the adventurous sort, please call me, Gary Thomas, 305-766-2642 or email me at kw1101v@aolcom. The property is rented so 24 hour advance notice is required.