31 Seaside South Ct - Key West -- Ocean View

31 Seaside South Ct is a beautifully decorated home with stunning views of the Atlantic Ocean. Ideally located in a secluded quiet location at Seaside Key West Residences this luxurious 3 level home includes many amenities. A few of the features of this home include designer decor, multiple outdoor spaces, private elevator, 2 car garage and breathtaking rooftop deck. This is a perfect stress free island home with poured concrete construction and impact resistant windows and doors. Seaside Key West Residences is recently built (2005)gated community with several pools and clubhouse.

This 1914 sq ft home has two bedrooms and 3 baths is offered as a potential short sale at the price of $695,000 or only $363 per sq ft. And if that price isn't good enough, the property comes furnished. There are more photos and additional information about the unit CLICK HERE. Imagine, moving into a place like this for such a potentially affordable price. The developer of the entire development owns the unit next door. That means the ocean view is just about as good as it gets in my opinion.

This is not my listing, but I would gladly show it to you. Please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. Imagine waking up to the sunrise view at your Seaside home in Key West. It can happen.

What Happens When a Bank Fails -- My Experience

I have two sets of personal experience dealing with bank failures. I thought my experiences might prove somewhat helpful in understanding the closure of Indymac Bank and the theoretical possibility of more closures in the near term.

In the late 1980's I managed the Special Assets Department of a national bank in Denver. Our bank was on the FDIC's Watch List of troubled banks. Our liquidity was low and we had very limited loan making ability. Everybody knew our bank would either be sold by its owner or that the FDIC would close it. For well over a year various potential purchasers did their due diligence to identify and distinguish performing assets from problem or non-performing assets. The FDIC was in the bank during the same time as well as it prepared for its presumed takeover.

Takeovers normally occur around 4:00 PM on Friday afternoons. Around 11:00 AM on the day when our bank was to get shut down by the FDIC the president of the bank held a meeting of all bank employees and thanked them for their services and explained how the presumed shutdown would occur and what would happen to the employees. At 4:00 PM the suits (FDIC officials and attorneys) showed up with briefcases in hand and walked in to shut the place down. A meeting ensued in the president's office. The suits walked out the front door to the TV news cameras waiting to hear the announcement that the bank had been closed. Didn't happen.

The bank was owned by a man who had made Billions in oil. His name and reputation were associated with the bank. He made a last minute cash infusion that re-established enough liquidity to keep the bank afloat until it could be sold. And that is what happened about a year later.

Fast forward to the summer of 1990 when I joined the Resolution Trust Corporation (RTC), the federal government agency formed as an offshoot of the FDIC to manage the shutdown of failed savings and loan associations.

As I recall the way things occurred the Comptroller of the Currency identified the S&Ls that were in trouble and it made the decision to "resolve" or close those institutions. The RTC knew which S&Ls would be closed but not the specific date. There were so many institutions that it was impossible to do every "bank" in one fell swoop.

RTC employees called "managing agents" were assigned to the bank to learn bank operations and identify assets. The process is laborious and I am not writing a book. A managing agent might have been a former senior level FDIC official or a senior officer in a large bank or thrift. A managing agent would be the defacto CEO of the thrift once the bank was closed. The managing agents often "lived" in the banks for months before the day we actually showed up to shut the old bank down. Other outside contractors, such as Coopers & Lybrand or Arthur Andersen, would perform due diligence and scrutinize the assets and liabilities so that when the resolution date occurred, a potential purchaser or purchasers would have a credible list of assets available to purchase.

Once closure date was known worker bees such as myself would "visit" the bank prior to closure to identify assets for which we would be responsible. The mission of the RTC was to shut down the failed thrifts, not to manage them for years to come. The banking operations were to continue in without interuption to maintain the value of the assets.

On the fateful Fridays we would show up in suits at the appointed time and get the glares from the disheartened employees as they saw their old lives abruptly change. The RTC retained most of the employees on for the short term basis while the assets were sold. The RTC would typically re-open the failed S&L on Monday with an almost identical name with the appendage "Federal Savings Bank or FSB" to distinguish the new entity from its former self.

The RTC usually had a "suitor" or an "acquiring bank" in hand to purchase the cash deposits and "banking" operations of the old bank. In reality the cash constituted liabilities so the RTC paid the acquirer to take on the responsibility. Again that process is way too involved to discuss here. The Western Regional Office of the RTC where I worked sold many of the failed thrifts to Bank of America. And I consider the purchase of all of those failed thrifts as a significant factor in the explosive growth of Bank of America during the 1990's.

The RTC Operations Department did massive conversions of bank loans from their old accounting and reporting functions to the universal RTC system. Again, this is what I recall. I was never a "loan guy" so if I err in my report, forget it. Notices were mailed to borrowers telling them to make loan payments to a new loan servicer. Eventually, the loans were securitized and sold. But the loans were not lost or forgotten. If you happened to have a mortgage with Indymac Bank do not stop making payments. Do not listen to people who do not know what they are talking about. Your credit is valuable. Don't trust people who tell you to do dumb things! You are only hurting yourself and your credit if you do.

Eventually the assets were sold or transferred and the managing agents came back to Denver only to get re-assigned to another failing institution.

The procedures the RTC used are basically what the FDIC use because the FDIC set up the RTC to be run basically the same way.

The process of what happened on Friday with the closure of Indymac Bank is different than a typical FDIC closing because it reportedly came as a surprise to everyone. Indymac Bank was not on the Watch List, meaning it was not being scrutinzied for possible bank closing. It is my understanding that the run on the bank deposits created the liquidity crisis that required the closing. Because the Indymac Bank closing occurred so abruptly the FDIC did not have a "suitor" or "acquiring bank" in place. And since Indymac Bank was so large it may be difficult to find one suitor to buy all of the assets.

The FDIC is organized and they have done lots of bank closings. The FDIC is not FEMA. The FDIC has a new website set up to explain exactly how operations will continue. CLICK HERE to view. For would-be buyers of foreclosed homes in Key West or elsewhere do not think you are going to get a "deal" because of bumbling "Feds".

Regulators Shut Down IndyMac Bank! Friday July 11th

Regulators Shut Down IndyMac Bank! Re-printed by Permission of Ruben Concepcion, Keys Financial.

Bank regulators today shut the doors of IndyMac Bank and have transferred its assets to the FDIC. IndyMac had stopped lending activities earlier this week due to lack of capital and had seen a run on its deposits over the last couple of weeks due to concerns about its ability to survive.



IndyMac is the largest thrift ever to fail and the second largest financial institution in the U.S ever to do so.

What you may not know about IndyMac, is that it was founded by Angelo Mozilo and David Loeb, the same two geniuses who founded Countrywide and likewise ran it into the ground as well.



What’s important to note here:

The last major round of lender closings (Fall ’07) was primarily due to liquidity problems. Credit markets seized up at that time due to investor fears of exposure to subprime paper. Investors stopped buying mortgage securities and lenders were unable to sell their loans. No cash to continue operations – and therefore no choice but to shut down. Those failings were not due to actual realized losses at that time.

These were primarily mortgage bankers and not banking institutions.



The IndyMac failure is different because now we are seeing a major lender/banking institution failure due to actual losses. Rising defaults at IndyMac deteriorated it’s capital position. That called it’s survivability into question and depositors began a run on the bank – resulting in today’s shutdown.



In my opinion, the best thing that’s happened to the US housing market is Bank of America’s takeover of Countrywide. The takeover will in effect serve to hide the actual level of losses at the nation’s largest mortgage lender. If the magnitude of the actual losses at Countrywide were to become public, the resulting panic in the market would make what we’re experiencing now seem mild by comparison.

Are the failures of Countrywide and IndyMac indicative of systemic problems in the banking industry, and should we expect more of the same?

I don’t think so. What sets Chase Manhattan, Wells Fargo, BB&T (our primary lenders) apart is that they are well diversified banking institutions first, and mortgage lending is simply a component of what they do.

Countrywide and IndyMac were sales companies by design – and financial institutions by default. They had an overly aggressive high pressure sales culture with notoriously poor underwriting standards. If you can believe this, their underwriting departments reported to their sales managers! The end result doesn’t seem so surprising when you think about that one.

Go to Keys Financial to get Reuben's e-mailed analysis of how money market news affects you in Key West.

Our office is doing several short sales right now with Indymac Bank. I worked for the RTC in the early 1990s and we closed dozens of small to very large S&Ls. The first couple of days are always edgy. But things start to move smoothly within a few days. Indmac Bank was doing a credible job in addressing short sales that we presented to them. I hope that the FDIC's takeover will permit the process to continue. If the old RTC model is used by the FDIC, the former Indymac Bank employees will be retained by the FDIC or its successor to perform exactly the same job functions as before the takeover. We shall see.

Key West on National Open House

Announcement from the Key West Association of Realtors

Key West will be featured in HGTV’s popular television series “National Open House”. Hosted by local real estate Broker, Rudy Molinet, the show compares homes in Key West with those in Las Vegas and Virginia Beach. The show features local homeowners showing their homes in several parts of town and in different price ranges. There is even a houseboat on the show, probably the first time one has been featured.

The episodes were filmed last year with local Key Westers “showing off their homes” and Rudy Molinet acting as the local real estate expert and ambassador for Key West. The show was filmed at local landmarks including the Old Town Historic District, the Oldest House on Duval Street, the Southernmost Point and many other Key West scenes.

This show will provide national exposure for Key West. This is the first time our city has been featured. The episode will air on Tuesday, July 15, 2008 at 9:30 PM on Home & Garden Television.

The pic at the top is Rudy Molinet about 40 years ago. He uses his pic in all of his advertising. (He even has his pic in one of his listings on Pecan Lane along with the photos of the homeowners children. I kid you not!) The guy right below Rudy is me about 30 years ago. Rudy looks pretty much the same. I look much older and have lots of grey hair these days.

I'm neither an expert nor ambassador. But I know a thing or two about Key West real estate. CLICK HERE to preview all Lower Florida Keys real estate listings. If you see something you like please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. Let's all watch Rudy next week.

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.