Disparate House Buys

Do you ever watch any of the reality tv shows that compare home prices in various cities? Several networks have similarly themed shows, but they all basically just demonstrate the familiar, but true, adage about Location, Location, Location as the determinative factor in real estate valuation.

I watched one the programs the other day and the house hunters were looking for a place near New York City for $1,000,000 and I was surprised to see how little, but also how much you could buy for that price if you were willing to shift location for some other factor. I knew that already, and I tell that to clients all the time. But it was nice to see it demonstrated so neatly on TV.

So I thought I'd do my own comparison. My criteria: single family home that sold and closed between 1/1/07 and 1/10/08 any where on the Island of Key West with a final sale price between $980,000 to $1,001,000. There were seven such sales and you can see each individual property in more detail by CLICKING HERE. But note that most of the houses originally were priced significantly higher than the actual sales price. And if you are familiar with Key West you will see why houses that sold for the same price, but in different neighborhoods, looks so disparate.

The Biggest Loser (or Winner depending on how you look at things in life) is the property at 912 Truman. It was originally priced at $1,995,000 but only sold For $1,000,000. But read about it and look at the pictures. I think the buyer opted to purchase a grand Key West home in an inferior location and in exchange got a significantly high value for his money. It sold at $286 per sq ft.


The house at 314 Margaret is in Old Town, but the block is situated in a mix of residential and commercial. It is near the seaport, but with that comes lots of foot traffic and parking difficulties for full time residents. Yet the house sold in only 27 days at 90% of the asking price because it had a valuable transient license. In my opinion is the existence of that license that caused this especially disparate house buy a good deal to its new owner. It sold at $865 per sq ft.

And then there is the mystery house at 520 Angela. It was redone last year along with a cottage at the rear. (That usually means illegal apartment or phantom rental unit.) It sits about 300 feet east of Duval and across the street from the Key West City Hall. The ultra chic Gardens Hotel sits on the east end of the block. So the house would be a duck out of water if it were intended to be used as a residence. The house was listed at $1,495,000 and sold for $1,000,000. The house is small and sold at $1163 per sq ft.

There are many factors that effect the perceived value of property, and location has to be near the top. Referring back to the TV programs I recall having seen mini-mansions priced at $1,000,000, but they were located in places most people want to leave. Like Tennessee. Key West is a place people move to because of the lifestyle it affords and the weather. It isn't referred to as "Paradise" by accident. So if you are a buyer up north in America and are looking to buy way down here on this tiny little island keep in mind that there are a lot of people just like you with money in their pocket who also want to get a place here.

I think it is possible to get a good deal in Key West in this current market. As a buyer you need to be cognizant of the many factors that affect price and work with a good realtor who knows our local market. Be willing to negotiate with yourself to find a house that fits your needs and your budget. And finally, be realistic. Sellers may want to sell their houses, but few want to give them away.

There are lots of homes in all prices ranges available in Key West. CLICK HERE to checkout all Key West mls listings in real time. Then call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com.

1108 Southard Street Key West Florida

Just listed: 1108 Southard Street. Yesterday I commented on 1006 Southard Street one block to the west. My description of the neighborhood rings equally true on this house.

So here is what the listing Realtor writes about this house: A beautiful classic eyebrow style home in one of the best locations in the Old Town Historic District of Key West - This renovated home features a main level open floor plan with living room, a wonderful large kitchen/dining room with vaulted ceiling, guest or master bedroom and full bath. Multiple sets of French doors open to a large loggia and decked private rear yard with heated pool and palms. Upstairs is a master bedroom with French doors to private porch, a large bath with separate tub and shower, walk-in closet and a guest bedroom. The home has beautiful architectural detailing including wood floors on both levels and Dade County Pine walls. Off street parking. Owner/Agent. CLICK HERE for more info on this Eyebrow House.

The house is priced at $1,495,000 or $821 per sq ft. The house is 1820 sq. ft. and sits on a 3740 sq. ft. lot. The owner is a realtor and the listing agent on the house.

This particular block of Southard Street has some of the most impressive homes in Key West. A few doors east of this house is the former home of the vice chair of AOL TIME WARNER that appeared in Architectural Digest about 4 years ago. CLICK HERE to see that magnificent home. Magnificent home. And across the street from that house is a very large single family property that sold in 2006 for $5.5 million.

By coincidence the house down the street at 1009 Southard Sold and Closed yesterday. That house was originally listed at $1,950,000 in November 2006. And it sold for $1,280,000 or $344 per sq ft. CLICK HERE to read what I wrote about this house in 2007. I showed this house to several people including a fellow realtor from Atlanta. I even wrote an offer for an attorney from Texas and we got close to getting the deal done, but didn't succeed. Whoever got this house in this location for this price got a good deal indeed. If you read what I wrote you will understand why the price and the property was such a good deal. The seller closed on a much smaller home on a Key West lane (of course) on the same day.

I think either house at 1006 or 1108 Southard Street would make a nice second home for somebody. You cannot beat the location, the neighborhood, or the charm of either home. Want to see one or both, call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com. OR CLICK HERE to search all Key West mls listings to find your future home in Paradise.

1006 Southard Street Old Town Key West

1006 Southard Street in Old Town Key West is a charming renovated cottage in the historic district. The cottage is secluded down a shady bricked walkway. There are a bedroom and bath down and a master suite upstairs. French doors open from the bedroom, living room and spacious vaulted kitchen to a decked swimming pool. It has lots of Dade County Pine and historic details, yet it has been modernized with a new roof, well-appointed kitchen and pretty baths.

The house is priced at $879,900 or $741 per sq ft. (The house is 1188 sq ft and sits on a 2833 sq ft lot.) The house sits to the rear, not the front, of Southard Street. So you cannot see the house from the street. That adds additional privacy for the homeowner. You are a five minute walk to Duval or the Historic Key West Seaport. And you are a two minute walk to Five Brothers Grocery and Sandwich Shop where you can get your morning con leche, Michael's Restaurant
where you can get your steak fix fixed, or Mangia-Mangia Restaurant to get your pasta fazooled.

CLICK HERE for details on this little charmer and more photos as well. Note the Dade County interiors, the open and eclectic feel that this house exudes, and the utter charm of the pool and garden. You won't be spending all of your vacation time tending to fixing things and working on the yard. There is something to be said and cherished about minimalism.

This house is just a basic house in a very good location. It has its drawbacks for sure. But it also has the charm and amenities that second home owners pine for. Want to see it? Call me, Gary Thomas, 305-766-2642 or send me an e-mail at kw1101v@aol.com.

1110 Curry Lane Old Town Key West

1110 Curry Lane is a delightful Conch Cottage tucked away on a beautiful lane in Old Town Key West. The cottage has been lovingly restored to maintain all the character and charm you'd expect to find such as Dade pine walls, Georgia heart pine floors and beautiful attention to detail. The floor plan is open and spacious and offers indoor/outdoor living amid privacy. There are two bedrooms and two full baths plus a chef friendly kitchen with soapstone counter tops and generous amenities. Outdoors enjoy the river rock lagoon pool, an outdoor shower (which is a must in Key West!) and lush landscaping. Relax on the front porch with a cool beverage and a good book. Off-street parking for small car.

The house is priced at $995,000 or $828 per sq ft (1207 sq ft of living space) on a 2321 sq ft lot. Curry Lane is situated between Fleming and Southard Streets and runs between White and Frances Streets. I have written before about the joys of living on a quaint and quiet lane, and this little gem is one of the best lanes in Key West.

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 the street (lane) exists. Even your creditors will have difficulty finding you. See, life on a slow lane isn't bad at all.

CLICK HERE for more photos and info on this little charmer and then please call me, Gary Thomas, at 305-766-2642 or e-mail me at kw1101v@aol.com to schedule a showing. This is one of those very special Key West houses that makes Key West the place people dream of moving to.

If you want to be more out in the open CLICK HERE to search the Key West mls database. Same info applies: please call me, Gary Thomas, at 305-766-2642 or e-mail me at kw1101v@aol.com to schedule a showing.

Lessons Learned

See the old house on the right? It was one of four buildings that had been assembled into a 23 unit apartment complex near downtown Denver. I bought it in August 1980 with a guy I worked with in Denver, and we had a contract to flip it in December 1980 for more than a 100% profit. The deal blew up, we sued the buyer for specific performance, and our Realtor disobeyed our specific written instructions not to return the earnest money deposit to the buyer. The settlement we reached with the buyer was nothing compared to the loss we incurred when the market disappeared. And my co-worker "friend" stopped paying his half of the mortgage. The short term flip turned into a 13 year learning lesson.

The Denver market had been on an up-tick for several years and the area where the property was located was being purchased for redevelopment by lots of folks. I was doing commercial loan workouts for the largest bank in Denver so I was very familiar with what was happening in the market. The Denver residential and commercial real estate markets were skyrocketing. My own house appreciated 253% between 1977 and 1982 when I sold it. But my experience was typical, not an aberration.

But when the oil market tumbled in Colorado, the whole economy farted. The housing market didn't just go limp, it went south. Properties across the board depreciated in value. Homeowners walked away from homes that they had recently purchased that had mortgages higher than the their worth.

The logic was simple. If homeowner owed $100,000 on a house only worth $75,000 the homeowner would just walk away from the house and let the bank deal with the property. So what if the homeowner had to file bankruptcy, the bank should have been more careful in the first place. Besides lots of other people were doing the exact same thing. There is no shame in having been taken by a bank.

But the banks lost as well. They had loaned millions on new office buildings, shopping centers, strip malls, etc. The problem was the banks did not always know how many other and usually similar other projects were being built. As a result Denver ended up with a huge over supply of downtown office space, shopping centers, and one gazillion strip malls.

And as for me, I bought out my co-worker so that my credit would not get impaired. But instead of selling the building and going forward, I decided to wait for the market to return so that I could make the profit I wanted. I did, sort of. But it took 13 years.

I'm sure you have heard of the "bigger fool theory". GO HERE to read about the bigger fool theory. In an up real estate market there is always going to be someone willing to buy at a price higher than the present owner paid. But when the market turns south, even stupid people get smart and stop buying. It seems that just about everyone decides not to buy until it is safe. And everyone has their own theory on what the market will do and how long it will take.

Well, it took me 13 years to get out, and I should have known better. I let that little ego-maniac in my brain rule my thought processes. I should have sold and gone on to do other things.

And the banks that made the stupid loans should have learned not to do that again. They didn't. But I did. The banks and savings & loans took a whipping in the late 1980s and early 1990s. And the banks (and this time investment banking firms as well) are getting hammered over bad home loans. Homeowners are doing what they did in Denver in the 1980s and that is walk away from their homes and mortgages.

There is a slew of inventory on the market and few buyers with the nerve to buy it for fear (or expectation) that the market will continue to fall further.

There are a few parts of Key West real estate that are hitting the skids big time: the Key West Golf Club, Seaside, and many homes in New Town that were damaged during Hurricane Wilma. The cheap units at the Golf Club that sold in 2005 for over $500,000 are now priced around $300,000 +/-. That is scary. But the prices there may fall more. Homes in New Town that were built in the late 50s and early 60s that sold in 2005 in the $750,000 + range are now available in the mid $500,000 range +/-.

During this past week in Key West there were 48 new residential listings,43 residential price reductions, 13 contracts that went contingent or pending and 3 sales. This is selling season, so it is not surprising to see all the new listings. But the price reductions (especially the drastic ones) indicate a market in turmoil.

There is a house I have written about here several times that just got listed by another real estate company. The prior listing agent did her customer a huge disservice by listing the property way too high for this market. I personally had written an offer on the property but then decided not to submit it because I thought the listing agent would not convey the offer in a positive tone. We are not supposed to speak evil of other Realtors. I would like to tell you what I think of that woman. But I can't.

I will stop writing now, but I do think there are buying opportunities. Good properties will sell and the rest is going to grow weeds and the paint will peel.

Key Haven Waterfront at Affordable Price

42 Key Haven Road, Key West, Fl has just been reduced in price from the initial $1,300,000 to only $990,000.

This is how the listing broker describes this property: Huge Price Reduction!!! Best value per Sq. footage currently on the market! Spacious waterfront home located on beautiful Key Haven. 5 bdrm, 3 bath that includes a legal separate mother-in-law unit with plumbing in place to add a kitchenette-337 sq. ft.. Renovations completed that include new-tile floors throughout, landscaping, front door, brushed stainless steel appliances & central a/c system. Split floor plan offers a very private master suite with tile handicap access bathroom and lots of closets. Sitting room, dining room area and over sized family room, screened Florida room overlooks the water. Laundry room with hookups in place and extra shower plus door to side yard. Vacant and easy to show-owners say sell!!

That pretty much says it all. Owner wants out. At the reduced asking price the house is offered at $322 per sq ft. There have been five market sales in the same 5th Addition to the Key Haven Subdivision in since January 1, 2007 with the price per foot sales price higher than the current asking price. GO HERE to compare those properties for yourself. Prior to Hurricane Wilma this particular property would have sold fairly quickly, of that I am sure. But today it is a different market and for a buyer looking for waterfront property that may have the mother in law (or some other Lothario) this home may be worth taking a look at. CLICK HERE for more photos and info on 42 Key Haven Road.

If you are looking to buy a house or condo, but don't like the looks of this particular property, don't fret. We have lots of houses for sale in all price ranges and locations. CLICK HERE to do your own search of the Key West mls database and then call me (Gary Thomas)at 305-766-2642 or email me at kw1101v@aol.com to schedule a showing.

Estate Sale -- 912 Fleming Street Old Town Key West

912 Fleming is a really big house with a beautiful pool on a big lot on a great street with really expensive neighbors. And it is priced to sell.

Here's the skinny. The previous owner was a designer who renovated numerous properties in Key West for himself and clients for several years. He had purchased the house next door (at 916 Fleming)and was renovating it when he passed away early in 2006. His estate sold the project house for $1.5 million (the house was gutted and was basically a very expensive "shell"). That property is pictured to the right and shows how it looked in January 2006 and February 2007. It is almost finished.

The house at 912 Fleming is 3228 square feet on a 5650 square foot large--fairly large for Old Town. It has 4 licenses and the owner rented two apartments located at the front of the home and he lived in the rear--most of which was newly constructed by him during his renovation in 1997-98.

The home is perfectly livable "as is", but a new homeowner may want to eliminate the rentals and expand the living space to the entire house. And here is why: the neighbors.

The house next door at 908 Fleming just sold for $3,600,000 ($1,158 per square foot) and is undergoing a massive remodel. That house is huge and has a huge lot. And just next door to 908 another new house is being built. The house across the street at 911 Fleming sold after 120 days on the market for $4,340,000 or $1401 per sq ft. That house also is huge and has a huge lot. See the trend: big houses and big bucks being spent.

The estate of the former owner has reduced the price from the original asking price of $2.6 million to $1,790,000 or $554 per square foot. That's a no-brainer in my book. The house is Perfectly Livable as is. Great block and ready to go.

CLICK HERE to find a stately home or a potter's cottage in Key West. We have them all. There is a house waiting to be made a home. Call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101v@aol.com to schedule a showing of 912 Fleming Street or any other property you may find on the Key West mls website.

Classic Key West Architecture: 1113 Fleming St.

I call it Greek Revival. Conchs call it a Conch House. Whatever you want to call it, it is a Classic Key West home. This great house is located at 1113 Fleming Street and the owner wants to sell.

Classic Key West architecture with an up to date interior make this perfectly located Old Town home a smart choice. The floor plan is perfect for entertaining with the kitchen/dining and living room opening onto a rear covered porch and yard with spa pool. A wonderful feature of the property is the recently built guest cottage at the rear of the 165 ft. length lot. The guest cottage is a legal separate unit and is totally private and can also be accessed from Stickney Lane. There is covered off street parking for 2 cars.

Noted local architect Michael Ingram was the previous owner of the home and designed many of the improvements to the home during the period of his ownership. While the exterior is classic in design, the interior is remarkably "up to the minute" in design and functionality. The rear of the home opens onto the courtyard that is designed to take advantage of Key West's superb weather.

This home was originally priced at $1,725,000 and has been reduced to $1,349,000 or $542 per sq ft. That is a very good price for a superb location. CLICK HERE for more photos and detailed information on 1113 Fleming Street in Old Town Key West, Florida.

If this property doesn't suit your fancy, CLICK HERE to search the Key West mls database to find one that does. Then give me a call at 305-766-2642 or send me an e-mail at kw1101v@aol.com.

Pitch a Tent in Key West

So you have some money that you want to use to buy a property in Key West. You have read that the market is down, and you have decided that now is the time to pitch a tent in Key West. That's me in the photo to the right. I pitched my tent near Rifle,Colorado in 1997. Never heard of Rifle? It's on Interstate 70 between Vail and Grand Junction. It is actually very pretty. If you do a quick Internet search you will see that property values there, though less on the low-end, are proportional to Key West prices for mid-range properties.

Take the pretty as a picture cabin in East Rifle (other photo to the right). It is listed at $950,000, but that includes Pond! One bedroom one bath mother-in-law apartment with single car garage. 8 acre shares of Silt Project Water. Inclusions - 2 stoves, 2 refrigerators, 2 dishwashers, 2 microwaves, window coverings, leather couch, bar and keg in family room. Exclusions - Sellers personal property, 2 freezers in garage, hay in barn, dumpster and 2 grain bins.

But if you look at the cozy little 3 bed, 2 bath fixer-upper in the town of Rifle priced at $240,000 you'll see that fixer-upper isn't that much of a better deal than a Key West fixer-upper, especially since it is located in the boonies.

Now one could say that Key West is at the end of the road, and they would be right. You don't just happen upon Key West by accident. Well, I guess you could be driving and make a wrong turn in Homestead and end up here. But that is doubtful. No, people come here on purpose: to have fun and enjoy the weather and the easy-going lifestyle.

I did a quick search of the Key West mls database and came up with a list of single family homes priced under $1,100,000 in the Old Town area. Take a look and see if one interests you enough to decide to pitch your tent in Key West. I included a couple of "affordable" properties as well as a couple of homes that are what just about every second home buyer dreams about when they conger up what their Key West home should look like. The issue is not being able to find the right property, but it is rather finding the right property at the right price. No matter how much you want a property, even in a down market, you must pay the price. As a buyer you cannot just wait for the price to drop to your comfort level. Your expectation of price and value must be grounded upon a rational basis.

CLICK HERE to do your own personal search of home in Key West. If you see something you like please give me (Gary Thomas) a phone call at 305-766-2642 to schedule a showing. Or contact me by e-mail at kw1101v@aol.com. If all else fails and you can't find a home at the right price perhaps you can pitch your tent at Boyd's Campground on Stock Island.

2007: That Was the Year That Was

Hey readers, I am not a statistician. I am a firm believer you can use statistics to justify any position you want to take. The accuracy of the information I am about to give you comes from the records of the Key West Association of Realtors mls database. The information in that database is entered by individual offices or sometimes individual Realtors. Get the point: I am hinting that the numbers are probably not 100 per cent correct. You know the phrase "garbage in, garbage out". I am certain that innocent errors were made while entering data. Also, our database contains some duplicates (long story--accept what I say.) Nevertheless, it is what we have to work with.

In 2004 there were 461 single family and condo sales totaling $335,058,765 in Key West. (The specific areas are the islands of Key West, Stock Island, and up to and including Shark Key.) This is our base year.

In 2005 there were 522 single family and condo sales totaling $505,594,132. There were 4 major hurricanes that hit Key West this year with Hurricane Wilma being the strongest and the one that had major short term and long term impact on the island and the economy of Key West. The sales volume in 2005 provided a 66.27% increase over the sales in 2004. And the number of sales increased 61% during that time.

In 2006 there were 302 single family and condo sales totaling $275,697,052. The Key West economy was in recovery most of the year. Many homes were damaged during Hurricane Wilma and local builders and individual homeowners did a significant amount of rebuilding after the hurricane. Buyers were very apprehensive because of the hurricane and the realization that the entire US housing market was in decline. Homes sales declined over the year 2005 by 54% and the number of sales declined by 57%.

In 2007 there were 336 single family and condo sales totaling $283,211,865. The good news is that our sales were up over 2006 by .027% in dollar volume and up by 11.25% in the number of sales. Not a lot, but it is better than being down.

Something really foreign happened in Key West during 2007: the local economy took a deep downturn. Several businesses shut down. Some Duval Street merchants through in the towel and closed rather than getting beaten to death by greedy commercial landlords that demanded higher and higher rents. There were a lot of foreclosures. Some borrowers were able to fend off foreclosure by getting their bank lender to accept a Short Sale price which allowed the seller/borrower to walk away from the property and the debt with the lender getting most, but maybe not all of its loan repaid. There had always been an occasional foreclosure in Key West, but the number of foreclosures in 2007 was totally counter to experience. Year after year property values increased by at least 10%. So the loss of market value (and that is exactly what occurred) was shocking.

In the year 2005 the asking price for a home in Old Town was just about $1000 per sq ft pretty much across the board. Now in 2008 the asking price has adjusted to the new reality that the heyday market of 2005 is gone forever. Many (but not all) sellers are listing their properties more realistically. Some Realtors (read my item Listing Whores) continue to act like enablers who create an atmosphere in which the seller can comfortably continues to believe that their homes are so special that they can command an exorbitant price. I just did a quick check of new listings for the last week of December 2007. The prices ranged from $270 to over $1400 per sq. ft. There are many, many still priced over $1000 per sq ft.

Since we are at the beginning of 2008 the pundits are busy telling us what we already know (or choose to try not to recollect) and that is "The United States is deep in its worst housing slump since the Great Depression, and according to a new report, it's not going to get better any time soon." GO HERE to read the CNN Money item that discusses with clarity the predictions of the potentates from on high. Note that they specifically site three Florida localities (not near Key West) that are probably going to melt-down during 2008: Naples, Fort Whalton Beach, and Punta Gorda.

We are seeing things a little more optimistically here in Key West. I already pointed out that our sales are better in 2007 than they were in 2006. But we also have 46 properties under contract that are waiting to close. The least expensive is $235,000 and the highest is a home on Sunset Key at $5,100,000. There are 18 properties priced over $1,000,000 that are contingent or pending. The average price on those is $1,478,500. Forty Six properties waiting to close as of today, January 1st. That's a pretty damned good way to start the new year. Those folks up in Naples, Fort Whalton Beach and Punta Gorda should be so lucky. By the way, our weather is better, are people are certainly more interesting, and we don't have their traffic.

CLICK HERE to checkout the Key West mls database. It is maintained in real time
not like on a lot of search sites that has dated info. So what you see when you search is what is really availble. After you have done your searching, please call me at 305-766-2642 or e-mail me at kw1101v@aol.com. I'd be glad to help you find your home in Paradise. Don't make the mistake of waiting for the other shoe to drop. That only happens at the Bourbon Street Pub (never did understand that name!) on Duval Street at midnight on December 31st. Things are going to start going back up.