I focus on homes in Old Town Key West. Two story, frame construction, tall ceilings, close to your neighbor and mostly plain looking from the outside. The magic is inside and the back yards. Craftsmanship, optimization of limited spaces and tranquility around pools and gardens. If you've been nose to the grindstone for 2-3 decades, then Old Town is your just reward. Why Old Town? It's a chance to live in an urban area without the pressure of downtown Big City. Walk or pedal for coffee, dinner, theater, cinema, shopping or to see other friends. An investment in Old Town substitutes for a vacation in Europe or South America and you can come here anytime you want; a 4-day weekend or a 4 month winter.
Out of Town Buyers fall generally into two categories.
- Late Boomers approaching 50 years old who are buying ahead and wanting to rent their purchase until they check out of the rat race.
- Early Boomers in their mid 60's and Mid Boomers approaching 60 who have the wherewithal to buy and either make Key West their primary home now or use Key West as their occasional escape from the real world.
Both of these buyer groups have access to cash and financing, though the Early and Mid Boomers often walk in with check books full of cash. Thirty and fifteen year mortgages are practically giving money away for free, allowing Boomers with excellent credit and downpayment money to buy at will.
Boomers aiming at Key West have already paid their dues, they were smart with their long term finances and so qualifying for financing is easier than a walk in Fort Zach.
In 2007, ’09, ’10 and 2011 the number of sales in Key West increased year over year. But only in 2011 did the average sales price in Key West also increase.
- If you drew a backwards “J”, the bottom of that backwards “J” would be 2010.
- In 2010 the drop in average sales prices was practically flat, aka a bottom.
- Average sales price in Key West in 2011 was up 13% over 2010. That’s not a lot but after double digit losses in 2007, ’08, ’09 and a single digit loss 2010, up 13% is huge, even if just psychologically.
Smart buyers, whether using cash or financing, recognized this bottoming in 2010 and returned to Key West in 2011. Oh by the way, Key West was the only market area in the Florida Keys to see a rise in the average sales price in 2011.
So what are these hungry Out of Town Boomers buying?
They are buying all fixed up. They’re walking into the Buy a Home store and buying off the rack. Then – they take it in a little here, hem it, let it out a little. But major renovations generally are not in the cards. They’re certainly not interested in banging their own nails and monitoring a major renovation while living out of town is too darn hard. Why?
Boomers coming to Key West know they have been successful because they made it their way and relinquishing control of their pricey Key West home to an architect and contractor they do not know for an extreme makeover is tough to stomach.
However, value adding fix-ups like bath or kitchen, a small wing, better pool and landscaping, are palatable. The proof of this is in the pick-up of business in shops who specialize in this sort of work. I talk to owners of shops like these all the time and they are happy to report adding inventory and workers.
Here's and example:
I sold a classic Old Town Eye-brow last year to a handsome couple of Out of Town Early Boomers. They had been looking for quite awhile and snapped up my well-priced home for cash. They were very pleased with their new prize. This sizeable, liveable home needed a large makeover to bring it up to their high standards. Their vision was grand and within their financial grasp but the time and energy to get there was more than they wanted to undertake.
Realizing this, they fixed up the house to bring it within reach of other Boomers, Boomers who want to stick with adding value fix-ups as described above. They sold the house they bought from me for what they had in it and bought a pair of smaller but side by side homes that better fit their original goal of a home for themselves and a haven for their family.
Plenty of Boomers have a second property somewhere, often less than a day’s drive or easy flight to their main home. This second house was a get away but close enough to allow them to “get back”. Now the “get back” function is less important, if at all. Now, its more of get away, stay away and Key West fits that description.
But first, sell the second property. This will loosen up some down payment money or money that can be used to add value as described above. Plus the psychology – if I don’t have a “get back” function anymore, then I don’t need a “get back” property.
Sellers should make sure their home shows as clean a palette as possible. Spend $1500 to cut back and haul out all the tree junk and yard goo, paint the fence and front porch and ensure everything inside; from floor to ceiling fan to window shades, are grime free. Price it based upon what has Sold and enjoy a pain free transaction.
Oh yeah, in 2011 it took on average 154 days to sell a house in Key West. Do you really want to wait that long?
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