Key Haven -- "Safe" Haven?

With all of the doom and gloom being uttered on TV and in print this past week about the collapse of the stock market, one phrase kept cropping up: "safe haven". Commentators were being asked to tell the public "safe" places to park their money in these trying times.

There are two ways to look at having cash these days. One, if you have a lot of cash you are very fortunate. Two, if you have a lot of cash you probably won't get a very good return if you park it in a bank or a CD. Interest rates are terribly low. So even though cash is king, if you park your money in a bank you will not earn enough interest to buy much bling.

I just created a list of homes for sale on Key Haven. CLICK HERE to checkout the list of single family homes priced in the low $300s per sq ft to over $1100s per sq. ft. Key Haven is a ten minute drive (on good days) from Old Town. It is our bedroom community where so many locals who got priced out of Old Town migrated to. Most of the homes are located on canals that provide boating access to the deep waters only minutes away. Click the photos to see the kind of spectacular views some of these homes have.

Some of the homes on the list are short sales meaning the seller owes more than the amount of the asking price but hopes the lender will accept a discounted payoff in order to avoid possible foreclosure. There is at least one bank owned property on the list (8 Beechwood Dive priced at $499,000 or $364 per sq.ft. - with a pool). It is owned by local bank that has had the property for two long years.

Several of the properties on the list flooded during Hurricane Wilma. Those properties may be priced at a discount because of this.

There are also several very high end properties on the list. These properties have excellent locations and superior upgrades and craftsmanship in their construction. I think there are some good buys on a price per sq. ft. basis on some of these properties. Of course there are more buyers for the less expensive homes, but some of the larger properties are real values even in this stressful environment. It is for that reason that I suggest Key Haven may be a safe haven for buyers who want to capitalize on this current market.

If you see something on the list that strikes your fancy, please contact me, Gary Thomas, 305-766-2642, or email me at kw1101v@aol.com. If you are looking for a place in Key West other than Key Haven, CLICK HERE to perform your own search of our mls database. Then call me to help you.

701 Elizabeth Heart of Old Town Key West

You know the house because of its unique design. You know the house because of its prime location. And know you know it is a deal waiting to be had. The seller just reduced the asking pirce on this unique property to only $879,000 or $443 per sq ft.

This is how the listing broker describes this property: "Live at the highest point in Key West, atop Solares Hill, a premier Old Town location. The main home includes 2 bedrooms, 2 baths, river recovered heart pine floors and 10 foot ceilings. Beautiful French doors lead out to your private deck, heated pool and outdoor shower. The second floor boasts cathedral ceilings creating a soaring master bedroom. The over sized windows feature louvered shutters adding to the architectural features of the home. This custom home also includes parking and a guest apartment featuring 1 bedroom and 1 bath with kitchen, laundry, French doors and deck. A quality home designed by Tom Pope and built by Erik DeBoer." What he does not tell you is that Tom Pope is one of Key West's most noted architects. He also does not mention that Pope and de Boer collaborated on several major Key West projects including the Marquesa Hotel. The pool area of the Elizabeth house was later adapted to the new rooms added to the Marquesa Hotel in 1995. Pope & deBoer used similar louvered shutters on several projects including major homes in the Truman Annex and The Meadows Area.

There is a legal three story one bed one bath duplex unit that could be incorported into the main part of the house. That unit has an opening that soars from the ground floor all the way to the ceiling of the third floor and could become a dramatic foyer into the house.

No need to worry about flooding here. This house sits at the highest point on the Island of Key West. Speaking of which, the views from the second floor are really great. And there is off street parking.This house ws built in 1984. Some features may seem a little dated. Everything works. Maybe in our new economy we will learn to use rather than replace things that work.

This is a very nice house in a very good location that was built thoughtfully by a good contractor. It has what most second home owners want in a Key West property. I'd love to show you this house and take you by some of the other properties the architect and contractor later copied in much more expensive versions. Please call me, Gary Thomas, 305-766-2642 or email me at kw1101v@aol.com.

More Bank Owned Key West Properties

A few weeks back I wrote about the new listing at 1119 Von Phister a bank owned property that happens to be right next door to where I live. I totally forgot until yesterday that I almost bought that house in 2004. I had plans to renovate it and sell it for a bunch of money. The house sold quickly after it was listed so I thankfully never got the chance to buy the beast. (I'm not putting that property down. Any renovation becomes a beast in my opinion.)

Today stock markets all over the world have moved steeply downward. The mortgage meltdown has turned into a thermal unclear event. Nobody can really predict what will happen next. But I can predict that things will eventually get better. They always do. I lost a huge amount of money after 911. I went nuts. But I eventually accepted what happened. That's all you can do. Or kill yourself.

Time passes and things do improve. Usually. Take the house on the right located at the corners of Elizabeth Street and Southard Street. The black and white photo is from the 1960s or 1970's. I took the color photo two days ago.

I don't know if we are in a new Depression, but there are a lot of depressed folks out there right now. That's the reason for the big smiley to the right as well. People come to Key West to get uplifted and to relax. And the parachute photo just makes you want to get up in the air and fly.

Here are three links to some recently foreclosed properties in Key West.

Link No. One CLICK HERE is a commercial property at 824 Duval Street. It has two commercial spaces of 1500 sq ft each and 6 one bedroom, one bath fully furnished transient rental apartments. There's a pool and tropical garden plus off street parking for eight cars. Bank owned and financing may be available.

Link No. Two CLICK HERE This is a bank owned condominium project that did not quite get completed. Listing agent says it needs about $200,000 worth of work to complete.
It's located on sunny Stock Island. Bank owned.

Link No. Three CLICK HERE This is a group of several homes that are bank owned. I've written about the house on Go Lane and 1119 Von Phister. Our office has the listing on the architecturally "interesting" A frame at 2301 Linda (corner of Flagler) which has a big pool and a small price per sq ft ($168) for the property. Each house is bank owned. Bank financing may be possible on Go Lane and Von Phister only.

If any of these properties look interesting to you, or if you have a specific property that you are looking to find, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

The Flim-Flam Short Sale

One of the better morality movies from the 1960's was George C. Scott's The Flim-Flam Man. He played Mordecai Jones - a penny-ante con man that rode the rails and took the money of Southerners. "You can’t cheat an honest man" was his motto. But he had no trouble cheating would-be cheaters.

I have seen several properties that have been offered as "Short Sales" in the Key West Association of Realtors MLS that are Flim-Flam. Flim-Flam can be defined as "a trick or deception, especially a swindle or confidence game involving skillful persuasion or clever manipulation of the victim".

The concept of a Short Sale is pretty simple. A home owner needs to sell his house quickly because of some impending situation such as a potential foreclosure, illness, marital conflict, etc. So Seller lists the property at a price he hopes will attract a potential buyer. In turn, the Seller hopes his lender will agree to accept a discounted payoff of his mortgage (an amount less than what is owed). If this occurs, the seller theoretically walks away from his problems and resumes a somewhat normal life without the burden of whatever precipitated the need to sell.

The above scenario is playing out with more regularity now across America. It pre-supposes the seller, the buyer, and the lender are each acting in good faith with respect to their competing interests in the sale of the specific property and the potential forgiveness of some portion of the debt. The parties negotiate their best deal based on their competing interests and submit an offer to lender to approve the deal. At that point the lender usually gets Broker Price Opinion (maybe a drive by appraisal by a local Realtor who estimates the fair market value of the property in the given market). Assuming the broker's opinion supports the contract price, the lender would then order a full appraisal and start the process to obtain final approval under the lender's credit authority to accept the discounted payoff.

I have seen a few sellers that have properties listed as Short Sales that are pulling a flim-flam on their lenders. This is how it is done. Seller lists his property for sale at a ridiculous price for a given market. In Key West the asking price might be somewhere around $1000 to $1300 or more per square foot for a nice house in Old Town, The Meadows, or The Casa Marina Area. There are very few houses that would sell for those prices in the current Key West real estate market. Yet the seller dictates the high listing prices.

Let's imagine that the seller owns several such properties in Key West. Let's further imagine that seller has each property rented. Let's assume that the tenants pay their utilities and that they send their monthly rent checks directly to the would-be seller. For grins sake we'll assume the seller gets $2000 per month net on each house. Let's make the scenario more interesting. Let's assume that the seller has not made a mortgage payment to his lender(s) since July 2006. If my math is correct the seller would have collected 26 months rent of $2000 per month for a total of $52,000 (for each house) without making any payment to the lender.

Let's add a different dimension. Let's assume the seller lets the "tenant" control when the house can be shown. A lot of tenants "work nights" so that means showings can only occur during certain hours and usually require at least 24 hour advance notice to tenants. The more impediments the seller or his tenant establish to limit the showing the short sale property the more likely there will be no offer on it. Likewise, the higher the asking price, the less likely the property will be shown because buyers are looking for deals not ordeals.

Here's another wrinkle some would-be sellers have devised. They require the listing Realtor to exclude certain parts of the real property from the sale. Examples could include that shiny new Viking stainless steel stove and refrigerator, or that ornate crystal chandelier, or whatever. Those are usually items that were in the property when the seller bought it or added to the property through renovations paid for by a loan on the property. Even though the mortgage covers these new fixtures as becoming part of the real estate, I've seen many sellers treat them as their own private property which they can keep as a souvenir of the once treasured house. And nobody is going to stop them.

The sellers who are achieving short sales in Key West are the ones who have listed their property for sale at a price that is targeted for this current market. The price is not related back to a time when the house may have sold for a higher price nor even to an old appraisal. An appraisal that is more than a year old is worthless in my opinion.

Almost every mortgage I have seen has an assignment of rents provision in it wherein the borrower agrees to give the lender any rents he collects in the event of default on the mortgage. Lenders typically don't enforce this and the borrowers (sellers) keep the rent. So it is not in the interest of a flim-flam short seller to get a short sale accomplished.

If you think I am exaggerating or making something up, you are wrong. There are a bunch of people in Key West who own several properties that are collecting rent but who are not paying their mortgages or taxes. There is no reason to do because they know they will lose the property at some point in time. In the meantime, they get to pocket the loot. We may cheer that the banks are getting hosed by these flim-flam would-be short sellers. But when you consider the "Bailout" or what the President now calls "Rescue Package", we are collectively letting the flim-flam short sellers take money out of our pockets.

And this tidbit may get you a little miffed at the tenants. They often claim to be abused by the awful landlords. Many eventually stop paying rent when they figure something is up. That can occur when the property is listed for sale or when the sheriff posts a public notice on the door advising the property is subject to foreclosure. If the tenant holds over and does not vacate the new bank owner must file an eviction. That costs more money and takes more time. So some banks give up to $1500 in relocation money to tenants to get them to leave without being evicted. Again, it looks like the taxpayers are going to help subsidize this into the future as well.

There are many good and decent people that are facing real adversity right now. My point is not to make lite of their predicament. Their pain must be awful. It just riles me that there are some really devious people that continue to use the system to their own advantage even as they sink into mire.

1110 Curry Lane Old Town Key West

Right after I started this blog about Key West Properties I wrote a piece called Life in the Slow Lane CLICK HERE to read. I mused about the virtues of living on one of the slow lanes in Old Town Key West.

This Old Town gem is tucked away on one of Key West's slow lanes between Frances and White Streets. The cottage has been lovingly restored to maintain all the character and charm you'd expect to find such as Dade County Pine walls, Georgia Heart Pine floors and thoughtful attention to detail. The floor plan is open and spacious and offers indoor/outdoor living amid tropical privacy. There are two bedrooms and two full baths plus a chef friendly kitchen with soapstone counter-tops and Viking stainless steel appliances. Enjoy the outdoor shower and lounge beside the river rock lagoon pool. Relax on the front porch with a cool beverage and a good book. Off-street parking for one small car.

1110 Curry Lane is offered at the price of $999,500 or $828 per sq ft for this 1207 sq ft treasure that sits on a 2321 sq ft lot. If you bought this house you could walk to Duval within 5-7 minutes. Same for the Historic Seaport. Or your job if you have one and it is located in Old Town. There are two convenience stores within a two minute walk as well. But neither you nor your friends would know how convenient this house is because it is tucked away so nicely. You won't hear the noise of Harleys roaring down your street, because their drivers don't have a clue that Curry Lane exists. Even your creditors will have difficulty finding you. You see, life on a slow lane isn't bad at all.

CLICK HERE for more info and pictures of 1110 Curry Lane.

There are lots of nice little house on the many little lanes in Key West. If you have some spare time CLICK HERE and search the Key West mls to search for your new home in Paradise and then please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com for more information.

Apocalypse Now?

If you are like me you spent lot of time yesterday either watching CNBC or maybe checking in every few minutes on CNN.com or MSNBC.com to see what in the world the stock market was doing. Yesterday was most troublesome. The DOW plunged 800 points. The good thing is it could have been worse. It ended up only losing 369 points. But that "good" news was diminished by the world wide cataclysm of stock markets everywhere taking a similar dive.

I'm no economist. My economic education is probably akin to that of John McCain. Hell, I keep urging people to buy now because a lot of properties are "bargains" by comparison to what they were priced at just two or three years ago. Yeah, the fundamentals of the Key West economy are as sound as anywhere else in America.

Except they are not. Right after I started my blog in late 2006 I began to profile new projects that were being built in different areas of Key West and hoped to attract a buyer for one of the projects. I reasoned that even though the real estate market had cooled there were new projects that were designed to provide the kind of amenities many would-be buyers want. I further reasoned that the financial guys behind the deals would not be putting money into the various projects if they believed the projects would fail. Some of the properties include the uber-expensive townhomes with water views known as Casa Marina Residences, the less expensive Casa Marina Estates, the Sea Isle Townhomes, Atlantic Drive (near the ocean), the Santa Maria Condominiums, Paradise Harbor, the Steam Plant Condominiums, the Key West Beachside Resort, and the politically and legally challenged Harbor House Condominiums. I did point out that the once planned demolition of Atlantic Shores Resort to make way for another high end ocean front condominium project was scuttled and replaced by the construction of more ocean front high end hotel rooms.

The one thing I did get right was my questioning of the business model that would permit the construction of so many high end units. Not counting the Key West Beachside Resort, there were about 150 units priced in the $2 million and higher price range. I don't know the number of units at Beachside that were or are available.

Potential buyers responded to the multiple offerings with a resounding a lack of interest. This past weekend the Casa Marina Residences put the land up for sale so that uber-project is toast. The Santa Marina Condominiums have not fared well and that's all I will say on that. Key West Beachside has had some closings. The Steamplant is not yet finished. Harbor House built a model unit on the waterfront. Prices were reduced on several of the units to attract buyers. I don't think it worked. Sea Isle Townhomes is being rented a vacation rentals. The Atlantic Residences only built two buildings and the remaining lots are vacant.

People still want to buy a place in Key West, but it seems like most would-be buyers have decided to take a "time-out" and wait until the market settles before they commit. I can't argue with that.

I recently received a gift from a client: a book entitled Timing in the Real Estate Market by Robert M. Campbell. I'm almost finished. I agree with almost everything I have read so far. He discusses predictable behavior in good and bad markets. He wrote about boom times and the emergence of speculators whose sole purpose is to make a rapid profit. (That happened here over and over again. It lead to the huge price spiral from 2003 to 2005.) Houses stopped being homes and became investments.

When the real estate market got really bad and sales activity slowed (on real sales as opposed to the new phenomena of short sales), the market in Key West became driven by fear just as Mr. Campbell posits. Some owners abandoned their homes. Others just abandoned their investments. Many of those properties became foreclosures. I think many of the short sales we have seen in Key West are investments gone bad as opposed to homes being sold by abused home owners. But I don't have any statistics to substantiate my theory however.

Mr. Campbell theorizes "real estate trends are influenced by a whole host of market forces -- interest rates, the expansion or contraction of the economy, consumer confidence, income levels, inflation, population trends, changes int he tax laws, and even war." Add in gas prices and hurricanes for extra emphasis (the Gary Thomas theory).

I personally think many Americans see the coming election as not just a choice of who will be President but more importantly view it as a referendum on the kind of country we want to be in the future. Our economy is broken. Big business took our jobs and moved them to other countries. Our economy became dependent on foreign oil and our wealth got shipped overseas just like our jobs. We have become a nation of consumers and service providers. Our stature as the predominant world leader has diminished greatly. I think the election is time for payback and re-assertion of the US as moral leader.

I don't know that the Wall Street crash has occurred yet or if it is still to come. But if it has not happened yet, it will. Using Mr. Campbell's theory of market forces that can predict real estate trends, I see that crash as the Apocalypse.

I wish the election were this week because I think the results would do a lot to remove a lot of the uncertainty in the American psyche and in the real economy. I think there is going to be hell to pay in Washington. People are seeing their lives being messed around with Wall Street types who cared only about enriching themselves and by the politicians who let them get away with it.

If the election and the "crash" are in fact the bottom of the current market trend, that means that good times are headed our way. That will be the start of the next recovery. And that is the first phase of a new upward trend. The phone calls and e-mails have slowed from would-be buyers. But they have not stopped. People are waiting to see what happens next. They are poised and ready to buy if only they know that the market has hit rock bottom. Mr. Campbell teaches that the smart investor buys now and beats the crowd as they charge uphill on the next price swing.

804 Elizabeth Old Town Key West Historic Eyebrow

804 Elizabeth Street in Old Town Key West is a quintessential classic Key West “eyebrow” style home complete with two saw tooth additions. One sawtooth addition is the formal dining room with vaulted ceiling. Just behind the dining room is the second sawtooth addition (probably the "cook house" in olden times) with its authentic naturally weathered wood vaulted ceiling. The owner has been careful to preserve the Dade County pine walls in the older parts of the house. Upstairs there are even some of the original floors. This home is a great example of the transition from old eyebrow house to a comfortable home that reflects today’s lifestyle. There is a new kitchen in the rear that overlooks the stunning 36 foot pool and gardens. This home was the subject of the TV program “In a Fix”, a few years ago. Truth be known, the owner had to redo what the TV program "fixed". But it was fun to watch.

I've shown this house several times and I absolutely love it. It is a charm to show. The house invites you to sit down and relax. Not a lot of houses do that. But this one does. This is a house you could be comfortable to live in. The rooms are people sized. They aren't too grand. They are not too small. They are livable. And that pool is incredible. The only complaint I've heard is that there aren't enough trees or foliage. That's fixable: plant more.

The master bedroom is located on the ground floor at the rear overlooking the pool. There is an adjacent office that could be remodeled to create a new master bath and master bed suite. And there is room to expand the master bedroom area if desired.

804 Elizabeth sits just a few feet below to the top of Solares Hill. It is a short three minute walk to Duval. The famous Seven Fish Restaurant is a one minute walk. The 800 block of Elizabeth has a mix of restored homes and houses that have been in place of decades. It is a real Key West neighborhood. This 4 bed 2 bath Eyebrow House has 1940 sq ft and sits on a large 5876 sq ft lot. It is offered at $1,250,000 or $644 per sq ft. CLICK HERE for more details and additional photos of the property.

Would you like to see 804 Elizabeth Street? Maybe even buy it or one of the 11 Key West Eyebrow Houses CLICK HERE FOR LIST currently for sale in Key West. If so, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

Bank Owned Homes in Key West

I just created a new list of Bank Owned Homes in the Key West area. Homes from Old Town up to Sugarloaf Key. CLICK HERE to checkout the list. I must add that the list does not contain all bank owned properties. Some Realtors have not entered all of their listings in the mls. Some out of town Realtors (like some from Tampa and Miami) have access to our mls but do not necessarily follow our rules and don't always get their listings entered correctly.

There are some dogs on the list. Some of the houses have had the kitchen appliances and even the kitchen cabinets removed. Some need more than a little "TLC". But there are a few really nice homes that are priced very aggressively. The bank owners want to sell those houses. A couple of the houses are located on water. What a treat: a good deal and a water view.

Here are a couple of tips to help make your offer attractive to the guy at the bank that decides whether to accept your offer. First, have cash or get pre-qualified to purchase any on which you intend to make an offer. Most lenders require proof of funds or a pre-approval letter on file before they will even look at an offer. Two, don't clutter your offer with extraneous conditions that the bank (seller) will not consider. The bank is selling only what it got through foreclosure. It will warrant title and nothing else. Do your inspections before you make your offer because the bank will not re-negotiate the deal after it has agreed to a sales price. Three, offer to close within thirty days. In a world of multiple buyers, don't plan on dragging your closing out. Finally, even though the lender will usually pay for the title insurance, you may want to engage a local real estate attorney to represent you at the closing. Don't let a good deal turn into a bad one by being penny wise and dollar foolish.

If you are looking to purchase a bank owned property in Paradise please consider working with me. I used to manage bank foreclosures for two banks in Denver. I have the real world experience to help you present an offer to the bank owner that may have a good chance of getting accepted. Call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. Who knows, we may get the better of Mr. Potter!

Key West Short Sale Opportunities

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 by the property, upon payment of of an amount less than is actually owed.

In yesterday's blog I reported that about one-half of the single family home and condo sales in Key West were either short sales or bank foreclosures. Short sales occur when troubled borrowers try to sell the property prior to foreclosure in hopes of salvaging part of their credit worthiness. Many short sales fail but others are succeeding. So I thought it might be helpful to explain how they work from a buyer's perspective.

Some sellers identify their property as a short sale to attract buyers. Some of those sellers aggressively price the property at or near the price they think the lender may accept as a discounted payoff amount. Other sellers keep the asking price in line with other homes in the geographic area but advise potential buyers to submit their best offer. In this current market I would suggest you look for property you like first then try to determine if there is a real bargain to be made in buying it. There are too many properties on the market just to look for a "bargain". Look to buy value first then make the bargain happen through negotiation.

The asking price and selling price are not always the same or even near the same even in short sales. In a competitive market seek to make your offer as a buyer better than all other offers. That does not mean you have to offer the most money. (1) If you have the ability to do so, make an "all cash" offer. Submit proof of funds (letter from your bank showing more than $X in your account or provide a copy of your most recent bank statement or stock brokerage account showing value of liquid assets) to cover the transaction. (2) Obtain written pre-approval from a lender showing that you can obtain a loan to purchase the subject property within a limited period of time. (3) Do not encumber your offer with unnecessary contingencies. Instead, make your offer as simple as possible. (4) Offer to close the transaction by the end of the calendar month if possible. Make your offer help the bank's performance look better by getting the deal done by month end.

Some Realtors will tell you that you do not need to have an earnest money deposit to make an offer to purchase. That may be true in some instances. But if you want to get a bank's attention, have real money on deposit with a title insurance company or an attorney who will write the title insurance policy. I suggest that you offer to pay for the title insurance. By so doing you eliminate one sticky point in any negotiation. Lenders are seeing a lot of short sale offers that disappear because some Realtors are submitting offers on multiple properties. Having real cash on a specific property may make your offer look better than an offer that is just written on paper.

Once you have a signed contract between seller and buyer, the short sale offer is submitted to the lender (or lenders if there is more than one mortgage). The listing Realtor or short sale negotiator will submit a HUD One form to the lender. That form will show the net proceeds the lender will receive should the short sale be approved. It is a good faith estimate of all charges and fees that seller and buyer will incur to make the deal happen. You are more likely to get a contract approved if there is just one lender or if one lender has both a first and second mortgage. If some outside party has a mortgage of other lien junior to the first mortgage, that other party must also agree to the short sale. That may require a nominal payment to that party. If that party does not agree, a short sale cannot occur.

Assuming that the HUD One Statement is acceptable from a numbers standpoint, the lender will first order a BPO, Brokers Price Opinion. ("The BPO is a tool used by lenders and mortgage companies to value properties in situations where they believe the expense and delay of an appraisal is not necessary. Real estate brokers are given an order to do a BPO by the lender, mortgage company or loss mitigation company. The broker does either a Drive By BPO or an Internal BPO in most cases.") If the numbers still look attractive, the lender will probably order a full appraisal to validate the proposed deal. Once the appraisal is returned the lender will do internal math calculations and obtain departmental approvals of the short sale amount. It is almost like doing a loan approval in reverse. Here the lender must substantiate the deteriorated property value to justify the write off of a larger loan. When approved, the lender notifies the parties that they may close the deal and give them a limited period of time to do so.

Some lenders have gotten their acts together and have become able to get deals approved within a few weeks. That usually happens when sellers have all of their documents in order and when there are no extraneous requirements to complicate a proposed deal.

Be flexible. Be willing to work with the seller if need be to get the deal accomplished. I've seen several sellers who listed properties at what I think is an aggressive low price agree that agree to sell at an even lower price. Sometimes things crop up between the contract date and closing that make closing look almost impossible. Different lenders have different requirements to approve short sales. Some require a cash payment from seller to permit debt forgiveness for the balance. Others may require the seller to sign a promissory note. Perhaps something happens to the property that requires the contract terms to be restructured. Be flexible. If you are getting a good deal, do not be a hog. Pigs get fat. Hogs get slaughtered.

I created a very simple list of single family short sale properties in Key West. There are more properties but the often listing Realtors may not have entered the information in our mls database correctly for easy capture. CLICK HERE to review the easy single family short sale list. CLICK HERE to review the condo and town home short sale list. If you are looking for a particular type of property or have a specific location, please call me, Gary Thomas, 305-766-2642, or e-mail me at kw1101v@aol.com. Let me know what type of property that you want, your price range, and the time frame in which you want to get a deal completed. Maybe I can help you. I can try.

Out of Business

Those of you who come to Key West know the Pegasus Hotel at the corner of Southard and Duval Streets. There are several store front shops on the Southard Street side including the now Out of Business Psychic. The Psychic of all people should have seen the downside--you'd think.

It's that time of the month again. Time to recap what happened in the Key West real estate market for the month of September 2008 and to compare it with the same time for previous years.

I've said before I am not a numbers guy. I guess I'm in the wrong business because numbers are really important in real estate. Anyway, in 2005 there were 23 single family home sales in Key West totaling $27,454,266. The number dropped to 14 sales in September 2006 with sales of $9,730,000, and fell further to 5 sales in 2007 for only $4,386,500. In 2008 we had 20 sales totaling $12,026,000. We are improving, right? Yes and no. Our sales are up over 2006 and 2007 but they are only 44% of what they were in 2005. Five of the 20 single family home sales were bank foreclosures and 5 were short sales. So one half of our market was distressed property. And I think several of the remaining sales were distressed but not characterized that way because of the way they were marketed.

In 2005 there were 12 condo and town house sales that totaled $8,326,000. That number fell to only 6 sales in 2006 with sales of just $2,728,000. In 2007 the number bounced back to 11 sales of $9,421,000. 2008 produced 11 sales of $3,414,000. Looks bad, right? Maybe. Maybe not. Six units at the high end Key West Beachside Resort closed in September 2007 and that drove prices very high. If those sales are eliminated, there were five market sales of condos totaling just $1,885,000. So it sort of looks like we improved over condo and town home sales over years 2006 and 2007 this year, but we are near the number of sales for the year 2005. But our sales price are off by 59% over what they were in 2005. Out of the 11 condo and town home sales we had in September 2008 3 were bank foreclosures and 3 were short sales. So, again, distressed properties made up at least half of that segment of the market again.

I just checked the Key West Association of Realtors website. There are 1116 residential units for sale in the Key West area. That number does not include timeshares. There are still plenty of people looking to buy in Key West. I know some have decided to hold off doing anything until the uncertainty in Washington and Wall Street clears. As if that is ever going to really change. If the Psychic who went out of business across the street from our office is any indicator of predictor of what the future holds, don't believe anybody who tells you what the future beholds. They don't know. But past behavior is a good predictor of future behavior.

We have been improving year over year. We will not go back to the price levels of 2005 for some period of time. But our sales volume in terms of numbers of units sold is progressing to the same level. That is encouraging even if prices are down. But down prices are good for buyers who got sold out of the pricier market. So now some people who missed the earlier price ride are in on the ground floor of what may become another rise in prices. Who knows? The Psychic is Out of Business.