This is a question I am often asked.

Many buyers I work with are looking for an opportunity to take advantage of current market conditions and get a good deal on real estate in Key West.

There definitely are still opportunities to buy a Key West home at a good price, but understanding the difference between a short sale and a foreclosure is an important part of the process.

“Key West Foreclosures”

The foreclosure process is lengthy and complex.

Most people that are looking for a “foreclosure” in Key West are actually looking for a property that has gone through the foreclosure process and is now a bank owned or an REO (Real Estate Owned) property.

The benefit to the buyer is that banks don’t want to be in the business of selling real estate and they may be more motivated to have a quick sale at a bit below market than perhaps someone selling a home under a conventional sale scenario.

The down side to the buyer is that often these properties have been neglected so they may have deferred maintenance or significant physical issues.

A property with significant physical issues also may be difficult to finance.

“Key West Short Sales”

A short sale is when the seller still owns his/her property but the sale of the property will be for an amount less than what is owed to the bank(s).  Most likely the seller owes more than the home is worth.

As such, the bank must approve the offer and agree to take less than what is owed them.

The seller may be in default on the loan and the bank may be in the process of foreclosure proceedings.

There may be multiple mortgages on the home, which can make a short sale more difficult as secondary loan holders might only receive pennies on the dollar and as a result be less motivated to approve the sale.

When you are considering making an offer on a home that is a short sale it is important to understand the facts so you can make an educated buying decision.

Getting answers to the following questions will help you when it comes time to making an offer.

•  How many mortgages are on the home?

Multiple mortgages on the property may create more difficulty in obtaining bank approval.

• What is the amount of each mortgage and how does this compare to what the list price is?

If the gap is not huge, the bank might be more likely to work it out quickly.

• Has the bank(s) approved the list price?

If the bank has already approved the price and you are prepared to offer what is being asked it is likely that the process will move more quickly from contract to closing.

• Is the bank(s) communicating with the listing agent regarding the short sale and potential bank approval?

If the bank is not communicating with the agent or seller it could be months before the offer is considered by the bank.  This does not mean it won’t happen, just be prepared to wait.

• What are other similar homes selling for in the neighborhood?

It is not unusual for the banks to get an independent appraisal before they accept an offer.  Understanding the market and recent sales will help you to make an offer that the bank will consider.

I have experience and a successful track record working with buyers and sellers with both short sale and banked owned properties.

As a matter of fact, I just recently closed the short sale at 2 Aster Terrace in Key West as the listing agent on behalf of the sellers.  I worked successfully with the bank to obtain the bank approved price and closed within 48 days of the executed purchase contract.

If you would like help navigating the process, please feel free to give me a call at 305-746-2525 or visit my website at www.BEinKeyWest.com

Click here to search home listings in Key West.

Statistics just in from Realtor.com.  The national inventory for available homes for sale has dropped 21% in March of this year compared to March of 2011.  In addition, the median list prices increased more than 5% compared to last year.

How does this compare to Key West home sales??  Year to date through March of this year average and median home prices are up 8% compared to YTD through March of 2011.  Inventory is down almost 10% compared to a year ago (and down by about 22% from two years ago).

What are your predictions for the real estate market?  Do you think we are turning the corner toward recovery?

I get calls often from people all over the country looking for a second home or an investment property here in Key West.

The call I receive most often is from people looking to find a home in Key West  for under $200,000.

They are often dismayed and disappointed (and sometimes even in disbelief) by what they hear from me.

Although not impossible, it is a challenge to find a home (other than a mobile home) for under $200,000 in Key West.

There are a couple of condominium communities on the island that do have active listings available for under $200,000 and there are also a few townhomes in this price range.

Homes available for under $200,000

As of March 7^th, 2012, according to the MLS, there are fifteen homes available for sale in Key West under $200,000.  There are no single family homes available for sale at or below this price.

Of the fifteen homes available four are 1 bedrooms, ten are 2 bedrooms and one is a 3 bedroom townhome.  Three of the homes have income restrictions and at least two have substantial physical issues.

The average single family home price is over $600,000 and the median (the price where ½ the homes are higher and ½ are lower) is over $450,000.

A home for under $200,000 is a difficult find here in Key West. 

There are certainly other areas of Florida where a deal like this is readily available, but here in Key West the cost of homes are higher than many cities in Florida.

Supply and Demand

As we all know, prices are driven by supply and demand.

When supply is fairly constant – as is the case in Key West with limited opportunity for growth in new housing – demand is the variable which determines pricing.

There seems to always be a demand to live in paradise!

If you ask a local they will tell you that there are great deals right now.  This comes from someone who was here during the peak and they understand that although housing may not be considered affordable to many, prices are significantly lower than during the housing peak – sometimes as much as 50% lower.

Why you should consider buying in Key West now

If you can swing it, now may be the time to buy with interest rates at all time lows and home prices starting to rise.

This is a wonderful, historic, eclectic tropical island with great art and culture, not to mention all that is available by being surrounded by beautiful ocean waters of the Gulf and Atlantic.

We would love to have you here!

If I can help you find your home in paradise I would love to share my knowledge and assist in your search.

Beth@BethEliot.com

www.BEinKeyWest.com

305-746-2525

2011 Key West Real Estate Year in Review

2011 was an interesting year for real estate sales inKey West.  In a nutshell, things are looking up for sellers and buyers are finding that waiting too long may result in missing good buying opportunities.  Yes, yes, I know… REALTORS® are known for pitching the benefits of buying or selling….. that is what we do, right??   Well, if you are thinking about buying or selling, now might truly be the right time.  Your reasons are unique to you, but your concerns about market conditions and timing are universal.   So with that said, let’s just stick to the facts pertaining to Key West Sales (which are published from the Key West Association of REALTORS ®).

•  In  2011 the median single family home price increased 10.9% over 2010 prices.  Median Condo prices increased 8.6%.
• In  2011 the average single family home price increased 12.3% over 2010 prices.  Average Condo prices increased 16.8%.
• Total number of homes sold increased by 2.3% in 2011 as compared to 2010.

The total number of homes on the market for sale has dropped substantially in the last two years.  As a matter of fact, the number of homes currently available for sale has dropped by almost 50% as compared to January of 2009.

•  The average number of homes for sale in any given month in 2011 was 440.  This compares to an average of 533 in  2010 and 705 in 2009.  In January of  2009 there were 854 homes for sale.

The total number of homes actually sold each year has increased year over year in the last three years.

• 436 homes sold in 2011
• 426 homes sold in 2010
• 392 homes sold in 2009

As with everything else, prices are driven by supply and demand.  Based on these facts, supply is down, demand is up and as a result, prices are increasing.  For these reasons, it may be the perfect time to buy and as prices are increasing, perhaps it is the right time to sell??