1211Catherine Street Key West Bank Owned Home

Behind the once carefully manicured ficus hedge at 1211 Catherine Street sits a hidden 1930's vintage home with great potential. The 3 bedroom 2 bath home totals 1463 sq ft. The living room has really interesting architectural features including original hardwood floors and elegant windows. The master bed and bath are quite large and were redone by the previous owner. Very nicely done. There is a door leading from the master bath to one of the gardens.

The two other bedrooms share the second bath. One of the bedrooms has French doors that open onto the pool. Another set of French doors open onto the pool area from the kitchen. There's a separate laundry area and outdoor shower as well.

There are good sized side yards on both sides of the house. (The lot is 500 sq ft.) The property to the west is Island Gym. There is a huge ficus hedge that screens that property from view. The property next door to the east are apartments. Across the street on the corner is a real estate office. Then there are three successive houses for sale: 1212 Catherine St., 1214 Catherine, and 1216 Catherine.

This property is Bank Owned and it is priced at $589,000 or $402 per sq ft. I like the house. It has some issues (I think the roof needs replaced--at least repaired--as there is evidence of minor leaking in one bath.) But the listing agent has not let this property deteriorate. Hooray for responsible listing! CLICK HERE for more info on 1211 Catherine St.

I think somebody can pick this house up for around $535,000 to $550,000. If you want to look at this house please call me, Gary Thomas, at 305-766-2642. I am not the listing agent.

July 9, 2008 Please read the Comments Section Below for more discussion of issues the listing agent feels I failed to disclose when I wrote this item.

Fixers - Key West

I don't get enough of real estate working it full time almost every day of the week. No, I gotta watch those stupid "reality" TV shows like Flip That House and Property Ladder. My favorite is Flipping Out on BRAVO. I was showing a $3.4 million house last Saturday when I opened the linen closet. The shelves were stacked with towels and bed linens that had been ironed. And each shelf had neat little tags that told the maid exactly where each item must be placed. I made a remark to my clients and the woman said something like "Jeff Lewis must live here". (He's the neat freak on Flipping Out.) And then we all confessed we watch that show religously.

There are so many shows on TV about fixing houses that it almost looks easy to redo a house. It isn't. Don't kid yourself. Especially in Key West.

On my first trip to Key West many years ago I saw lots of old homes and shacks and thought "somebody ought to buy that place and tear it down and put up a nice new house." The reality is that you can't do that in the Historic District (Old Town) Key West with a few exceptions. Most of the Historic District (Old Town) area falls under the HARC (Historic Architectural Review Commission) Guidlines. CLICK HERE to view the entire HARC Guidelines in pdf format. The purpose of the guidelines is to preserve and protect the architectural environment and unique character of the historic neighborhoods of the Key West Historic District.

The stated purpose of the HARC Guidelines is "to assist property owners, architects, developers, and the HARC Commission in making appropriate decisions concerning renovation methods and materials used. Those guidelines extend to signs, kiosks,out buildings, streetscapes, street furniture, murals, and other new construction. Sometimes it seems that HARC rules with an iron fist and other times it acts like a change agent. I take no position on HARC. I've had good success with HARC.

The photo of the humble house on Thomas Street and the shack CLICK HERE are good examples of why locals don't tear down existing structures even though they serve no useful purpose. Before the City of Key West had building codes and rules of adornment, property owners pretty much built what they wanted where they wanted it. But that was in the old days. Today there are set backs, side yards, floor area ratios, etc. that direct exactly what a property owner may construct on his property. But if a buyer acquires a property with a non-conforming structure, such as a shack in the rear corner of the back yard, the current set backs do not apply. It might be possible to renovate the shack into a pool house or a guest cottage by expanding the property from its present location.

I have just enough knowledge about land development to be dangerous. So I always tell prospective buyers to go to City Hall and discuss their general development plan with someone in the Planning Department. Every time I have done this the people at City Hall have been very helpful. I don't recall any city official ever saying something like "Yes you can do that". But I have heard them discuss the method by which approval is granted and that usually makes it easier for a buyer to make a decision.

Most of the flip reality shows get the houses totally renovated in 30 minutes. In Key West it takes more like 30 months. Plan on several months of working with your architect to get the plans done the way you want. Then you have to go through the HARC process. Maybe you'll have to go before the Board of Adjustment for a variance. That always takes a little more time. And then you get to deal with the contractors, electricians, plumbers, dry wall installers, painters, swimming pool installers, and landscapers. Maybe you even get to use an interior decorator. Thirty months. Count on it.

Or you could buy a house that is already done. CLICK HERE to search the Key West mls database in real time to checkout all real estate listings. Set your search parameters. If you see something you like, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

Single Family Homes in Key West under $500,000

I just went through the Key West Association of Realtors mls database and created a list of select single family homes under $500,000. There were a total of 67 such properties, but our system will not allow me to generate a report with that many listings. CLICK HERE to see all of the properties I was able to include.

Many of these properties are short sales (A short sale occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed). A few of the homes are bank owned and are priced to sell. In particular look at 2615 Staples. It was purchased for $900,000 not too long ago. That's a deal waiting to be made. And there are a couple of actual market sales as well.

Take a look at 1010 Whitehead Street. It is a very small and unpretentious house located one block off Duval near the Key West lighthouse. This house, believe it or not, was the home of one of Key West's most colorful characters: Larry Formica. He was the genius who created the World Famous La Te Da's on Upper Duval Street. He had other properties but his finances failed him. He lost La Te Da in the last economic slow down. But if this simple little cottage could house a giant like Larry Formica, maybe it could house you as well.

Three banks owned houses to consider at 3711 Duck (compare to 3713 Duck), 2005 Fogarty, 2816 Staples that is priced at only $275 per sq ft. There are more bank owned in the group. Some of the bank owned properties come with easy to obtain new bank financing, free appraisal, low closing costs.

If you happen to see a property that you like, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. There are some buying opportunities. Some of these properties are challenged. (That's a polite way of calling 'em dogs.) But there are some real nice houses in good locations. Let's see if we can make a deal and get you that Key West house you have been dreaming about. Maybe you can lay back in your Foster Grants and let the palm trees of Key West reflect your little piece of paradise.

Licensed to Make Money

Many people dream of buying a really charming home in Key West with a pool that they can eventually retire to. But in the meantime they want to be able to rent the house to help make the mortgage payments. Sounds easy. It isn't.

The City of Key West has a transient rental license ordinance that prescribes how single family homes, condos, and town homes may be rented on a transient (daily) basis. The city fathers created a map of locations with existing transient licenses and carved those areas as being permissible. Individual properties that had a transient license were allowed to continue to rent on a transient basis. Residences in permissible areas may rent on a transient basis if they have a license. Residences without a transient license may not. Furthermore, you can't just go to the city to buy a license because they don't issue new ones. Some transient licenses are offered for sale from time to time in our mls. So having a single family home with a transient license, even if you do not want to rent the house that way, the license is a valuable asset to have for re-sale at a later date.

There are two houses interested buyers should consider. The first is a new listing at 1307 Royal Street. It is a really cute property that is loaded with options! The front house has 2 bedrooms and 2 baths, and is in exceptional condition with cathedral ceilings, a heated pool, roll down storm shutters, off street parking and a TRANSIENT license. The back house is a legal 1 bedroom 1 bath cottage which can become completely private and separated by a rolling fence. The property is priced at the June 2008 appraised price.

1307 Royal Street is a five block walk to Upper Duval. El Siboney Cuban Restaurant is located a couple of blocks to the east. The asking price on this property 1438 sq ft property is $1,200,000 or $834 per sq ft. CLICK HERE for additional detailed information and photos.

Then there is 523 Louisa Street. It is just a hop, skin, and a jump off of Upper Duval. It is offered furnished. CLICK HERE to preview this charming abode of 3 bedrooms, 2 baths with 1080 sq ft of living space. It is priced at $1,195,000 or $1,106 per sq ft. Great rental history on this cute story and one-half conch house renovated in 2000 with new roof in 2007. First floor contains open living/dining/kitchen with a bedroom and en-suite bath. Upstairs is two bedrooms with adjoining bath between. Small lagoon style, black bottom heated pool added in 2003. Turn-key property. Strong advanced bookings for buyer to start with immediate cash flow. CLICK HERE to checkout the rental company's listing page for Lousia. And CLICK HERE to preview the advanced bookings that Louisa has in place.

Now it is permissible to rent a single family home, condo, or town home as a legal vacation rental. Such properties may be rented only once per month whether it is for one day or thirty days. That is why having a home with a transient license might be the better investment. I encourage prospective buyers to look at the websites of property management companies like RENT KEY WEST and AT HOME IN KEY WEST. Do the math. You'll be surpirised how profitable owning a house with a transient rental license can be.

If you are looking to purchase home in Key West that you can rent to help make your dream come true, please call me, Gary Thomas, 305-766-2642, or e-mail me at kw1101v@aol.com.

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.