Localism: Key West's Old Town

Real Estate Market Lows, Real Estate Market Woes!

Tue, 11 Nov 2008 09:21:48 -0600

I was talking to a fellow Realtor yesterday about the current real estate market in Key West. I was asked my opinion of what is going to happen. I don't have a clue. I see great properties that cannot find buyers. There are buyers. Don't get me wrong. They just don't want to buy now. One of the commentators on CNN or MSNBC was recently discussing the huge drop in the stock market during the past weeks. He spoke about the stock market testing new lows in an attempt to find it's bottom.

That discussion caused me to look at the single family homes that sold during the period between October 2007 through October 2008. I included all single family home sales from Sunset Key just off shore from Old Town through Shark Key. These homes are all in the Key West Association of Realtors database of homes in Areas One, Two, and Three. I did not exclude any sale. So the material is raw. And it is uniform in the sense that it was not manipulated. Statistics can be used to show just about anything. I'm not trying to prove any particular point. You as the reader can draw your own conclusion as to what the data shows.

The "spike" in prices during June, July, and August occurred in months when we had a couple of very high priced per square foot sales in Old Town and Sunset Key. Had those sales not occurred, the monthly averages would have been reduced.

The drop in sales during September and October 2008 is pretty much a seasonal occurrence. Sales during the summer usually take about 45 to 60 days to close. So the early fall sales reflect the lack of earlier sales activity. The disturbing reduction in price per square foot sales during September and October 2008 from September and October 2007 is troublesome, however.

The graph at the top of this page is the result of my attempt to try to figure out what our market is doing. I am not a statistician. I do not claim the figures are anything more than I mentioned earlier. You can judge for yourself.

If you think prices have dropped enough for you to seriously consider buying a home in Key West, please CLICK HERE to search the official Key West MLS database in real time and without registering with anybody. If you find a property that you like, please call me, Gary Thomas, 305-766-2642, or e-mail me at kw1101v@aol.com.

Real Estate Auction - Key West

Mon, 10 Nov 2008 14:43:19 -0600

Attention Bargain Hunters! I know you are out there. I know there are buyers waiting for the absolute rock bottom prices. When bank owned properties do not sell after being on the market for several months, they are moved to the next level in an attempt to sell them. The next level is public auction.

There is going to be a huge public auction in Miami on Sunday, December 14, 2008 where the Key West houses shown here are available for purchase to the highest bidder. A company called REDC (REAL ESTATE DISPOSITION CORPORATION) is conducting the auction for various bank owners. CLICK HERE to see the RULES of the auction and the drop down menu of properties available across the state of Florida. The same company is conducting similar auctions in other areas of the United States in the immediate future. So spend some time on the internet to checkout other areas of Florida or elsewhere. Why anybody would consider buying a vacation house anyplace else boggles my mind, however.

The five Key West properties are listed below. I am not recommending anything. I am simply letting the buying public know about this opportunity.

3533 Flagler Avenue Key West. Nice two story single family home near the east end of Flagler. There is a newer kitchen, 3 bedrooms, and a pool. Starting bid is $189,000.

630 Elizabeth Street Key West sits at the top of Solares Hill. This is an apartment building in need of TLC. There is a small outside area at the rear. Great location but it is going to need some work. Starting bid is $169,000.

1 Coral Way is a cute townhome located on sunny Stock Island. The starting bid on this two story unit is only $99,000. I have not seen the unit itself, but others have recently sold for a lot more than the current asking price on this unit.

3711 Duck Avenue is located in the New Town area of Key West. The starting bid on this single family home is only $69,000.

The final is a condo at 201 Coppitt Road (Unit C 204) on Big Coppitt Key. The opening bid is only $5000.

Two of the properties have been listed by a real estate firm out of Miami that has no physical presence in Key West. I personally think Realtors that list properties this way are hurting the seller and harming the local community as well. The bank owner does not get its property promoted and shown properly; the property stagnates and does not sell; the property is sold at a huge discount to its real market value; and that discounted price tends to drive down prices of other houses in the area.

Checkout the links and checkout the properties. All homes Open for inspection 11AM to 4PM on 11/22/08, 11/23/08 and 11/29/08.

Read the RULES at the website carefully. The RULES must be followed. Advance registration is required. This is not a solicitation for business on my part. I am not affiliated with the auction or any of the properties listed.

But if you are looking to buy a place in Key West, I would appreciate your phone call to me, Gary Thomas, 305-766-2642, or e-mail at kw1101v@aol.com.

Just Listed 723 Southard St - Old Town - Key West

Thu, 06 Nov 2008 10:34:04 -0600

Just Listed (but not by me!) 723 Southard Street - right in the Heart of Old Town Key West, Florida. This is how the listing Realtor describes this most charming cottage: "Totally renovated Old Town cottage located in the most desirable location atop Solares Hill. Absolutely stunning 2 bedroom, 2 bath home with a large family room with 3 walls of sliding glass doors opening onto the tropically landscaped yard, large deck and in-ground jacuzzi/dip pool. The gourmet kitchen has granite counter tops, Bosch stainless steel appliances, vaulted ceiling and a dining area with a wall of glass. Crown molding, designer lighting and beautiful heart of pine floors throughout make this one of the most appealing homes available."

723 Southard Street has 1100 sq ft of living space and sits on a 2228 sq ft lot(24'.75 X 90') midway between William and Elizabeth Streets. It sits in an eclectic block of similar conch cottages and larger conch houses. The location is a three minute walk to Duval and five minutes to the Historic Key West Seaport. If you run out of bread and milk, Faustos Food Palace is a five minute walk. Of course you could just walk to any of the dozens of cafes and restaurants within minutes. 723 Southard is offered at $899,000 or $817 per sq ft. CLICK HERE to see more photos and obtain detailed information on this cottage.

If you are looking for a place in Key West, now is a good time to buy. Prices are way down from their historic highs on all types of properties. I am a firm believer that any property that is listed for sale in today's market is listed because the owner wants or needs to sell it. I think all prices are negotiable. Please CLICK HERE to checkout the Key West mls database. If you see something you like please call me, Gary Thomas, or e-mail me at kw1101v@aol.com.

Like a Virgin -- 522 Grinnell St. Key West

Wed, 05 Nov 2008 08:44:02 -0600

I love old houses. I've spent years watching This Old House as the hosts and professionals restored neglected homes from another era. The end product was almost always very appealing and seemed to fit nicely into today's lifestyle.

One of the first houses I "almost" bought was the Croke Patterson Mansion at 428 East 11th Avenue in Denver. Like a lot of large older properties it was converted into apartments and deteriorated somewhat. Click HERE and HERE to see what I almost bought for $90,000 in 1974 or 1975. I was a young lawyer at the time and needed to borrow some of the down payment money from my mother. She didn't say "No" but instead said it was too much work for me to handle. Same thing. So I didn't buy it. Someone else bought it, fixed it up, and resold it a couple of years later for a little over $1,000,000.

A lot of the old houses in Key West got "bought up" in the 1970s and early 1980s. They got restored and the price of real estate in Key West exploded. Some of the very large houses were converted into apartments and others in guest houses (bed and breakfasts). And a few of the big houses just sat there, neglected. They sat for decades and nobody did anything to them. The exteriors did not painted or the gutters repaired. The facades were untouched. The interiors were un-fooled around with.

It invariably happens when I am driving clients around Old Town they spot one of the virgin houses and ask "How much does that cost?" thinking it must be cheap since it looks so run down. Nothing in Key West is cheap. So properties are just priced more affordably than others. And most of the old virgins are not priced affordably. But that may not make them expensive.

The new listing at 522 Grinnell Street belonged to the same family since it was built in the late 1800s. It was purchased from the original owners a couple of years ago. The house now sits vacant and awaits new owners. Potential buyers can look around this great hulk of a house without feeling like you are intruding. (The previous owner insisted that only she could show the house. She always re-told her family's history room by room. I actually enjoyed her showing the house because buyers got a real appreciation for the property.)

As I recall the story the former owner told this house, like so many of the grand old homes in Key West, was built by ship chandlers. That means the house was built to withstand strong winds and the elements. I would not call this house "grand", but I do think it has a very simple beauty that could just shine after a careful restoration. The house is big (2754 sq ft) and sits on a 55' x 100'lot.

There are bay windows on both the south and north sides. There is a large inviting formal entry. The living room and dining room are formal by design. The other rooms are just basically large rooms with tall ceilings. There is a wrap-around front porch on both the main and second floors. You can see so much of the Key West skyline from the second floor.

The rear yard has a small building that might allow you to "renovate" and turn it into a pool house. Yes, there is room for a good sized pool as well. I'd ask for permission to tear off the existing kitchen addition at the back and reconfigure the main rooms downstairs into spaces that meet our current lifestyle. That would mean creating indoor-outdoor living space. Perhaps you could add a first and second floor rear porches overlooking the pool and garden. Certainly you would want to redo the second floor and have the master suite at the rear to take advantage of the pool views. The nice thing is that this house is so large and so sound that you could dream up all kinds of creative ways to renovate it in style and yet retain that simple architecture that we can see under the peeling paint.

Cornish Lane (it's so small there isn't even room for a car) flanks the south side of the property. There are four cottages on Cornish Lane and a good sized house next door to the north. There are a couple of beautiful restorations on the opposite side of the street. And Five Brothers Grocery is on the corner at Southard Street. The Historic Key West Seaport is a three minute walk to the north and Duval is a five minute walk to the west.

CLICK HERE to see more photos and more details on the grand old virgin at 522 Grinnell Street in Old Town Key West. They don't make virgins like her any more.

If you are in the market for a virgin, or maybe a place that's been abused and needs some TLC, please call me, Gary Thomas, 305-766-2642 or e-mail me at kw1101@aol.com.

Key West Old Town Sales Report - October 2008

Sat, 01 Nov 2008 04:00:14 -0500

Last month a reader suggested that I report on the sales of just the Old Town area as opposed to all of Key West. I thought his request had real merit since that is the area that is most popular with out of town buyers looking to purchase a property here. So here is my spin on current Key West real estate sales.

I gathered the sales info for the years 2004 through 2008. Pretty simple stuff. And the results are not surprising. The fall months historically are slow months. It usually takes a good 30 to 60 days for a contract to evolve into a closed sale. A contract signed around July 4th might take until late September or early October to close if the buyer is relying on borrowed funds. (Bank approval of the loan application, appraisal, survey, title work, etc. Each item takes time and time enlarges the date for final closing.)

2004 was the base year. We had 9 single family homes close for a total of $7,612,000 or sales at $699 per sq ft in Old Town. There were 8 condo and townhome sales totaling $4,745,000 or $866 per sq ft. Remember there were a lot of "conversions" of larger buildings into condos back then. Interestingly, I counted 7 of the total 17 sales in 2004 as being short sales or foreclosures as of today. The number could be higher because I relied just on properties I know from memory that are in foreclosure.

2005 marked the end of the housing bubble and sales had already started to tighten. In 2006 Key West was still reeling from Hurricane Wilma and the downturn in the real estate market. We did not know then that Key West was only a microcosm of what was transpiring nationally. And I don't think any of us understood the world wide importance of the burst of the housing bubble until late summer in 2008. Sales of single family homes in 2005 dropped to only 3 with a sales volume of $4,590,000 or $876 per sq ft. There were 9 condo sales that year at $8,061,750 or $951 per sq ft.

In 2006 the single family sales increased to 6 with a total of $6,047,500 or $683 per sq ft. There were 4 condo and townhome sales totaling $2,017,500 or $703 per sq ft. Condo prices were dropping more as compared to single family homes.

In 2007 there were 5 single family home sales totaling $5,290,000 at $647 per sq ft. Condo and townhome sales dropped to $640 per sq ft as there were only 4 such sales that totaled only $2,198,000.

And this year, 2008, sales have nose dived. There were only two single family home sales in Old Town. One was in Bahama Village and the other was a brand new house at 408 Grinnell Street that I wrote about on May 21st. I referred to it as a half price sale. Well, it went for less than half of the original asking price of $2,750,000 because it sold for just $1,325,000 or $535 per sq ft. Statistically our two single family solds in 2008 amounted to a whopping $1,700,000 or $398 per sq ft. And condo sales were down as well. There were only two sales in Old Town that totaled a mere $1,310,000 or $724 per sq ft. Interestingly, the larger unit (at Harbour Place) sold for $396,000 less than the seller paid for it four years earlier.

There are currently only 7 single family homes in Old Town shown in our mls as contingent or pending. Several of those are short sales. And there are only 5 condo or townhomes shown as contingent or pending. To make matters worse, 3 of those contracts are for units at Harbour House (the yet to be constructed condo development at the foot of Margaret Street).

I have maintained my optimism that Old Town will recover sooner and more strongly than other areas of Key West. I believe Key West will recover as a whole much more strongly than other areas in South Florida. This is because there is still a demand for homes in Old Town. Buyers are waiting to buy the deals. They are waiting for sellers to get more realistic with the asking and selling prices. To borrow and mangle a line from "Field of Dreams" If you price it right, they will buy.

There are a few really nice properties on the market right now in Old Town. Some are priced correctly as compared to previous prices on a per sq ft basis. Some properties are priced high and some low price per sq ft basis. It is not just the price per sq ft that buyers should consider. Some of the distressed properties cost a whole lot more to build than the asking price. And some of the properties enjoy an excellent location which means to me that they will be worth more long term than other properties that may cost less now on a per sq ft basis.

Sellers who need to sell in this market ought to price their properties based on what they are worth today--not on what the sellers wish they are worth. My advice to sellers is to get an appraisal from a good appraiser. Don't list your property based on what you think it is worth or what your Realtor will list it at simply to get your listing. Don't believe the hype being spread around town that short sales and bank foreclosure sales do not count in valuing property. Those sales are a good percentage of the current sales in Key West. They count. Those are the sales that happened. Don't let your life spin out of control and end up losing your property or your equity by irrationally believing that your property is worth more than it is.