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Home sales down By Robert Silk Free Press Staff UPPER KEYS — The local housing market continued to slump in the first quarter of this year, with both prices and the total number of sales down from the same period in 2007. According to Multiple Listing Service statistics furnished to the Free Press by Tracy Larson of American Caribbean Real Estate and Marr Properties, 38 single-family homes sold in the Upper Keys between Jan. 1 and March 31 — down from 67 over those months last year. The numbers reflect sales from mile marker 74 to 106, but exclude the Ocean Reef Club on the tip of Key Largo. Prices were also off. The 13 dry-lot homes sold during the first quarter of this year cost an average of $401,000, off 7 percent from the 31 that sold last year. Canalfront lots were off by 6 percent, with the average sales price falling to $988,000. In both categories the cost per square foot of living space was down even more: 20 percent for dry properties and 26 percent for canalside homes. Homes sales on the open water also declined — down from nine last January through March to four during that period this year. The ongoing woes in the Upper Keys real estate market reflect national and statewide trends. According to the Florida Association of Realtors, the median sales price for single-family homes statewide decreased 15 percent between March 2007 and March 2008. Nationally, single-family home prices went down 8 percent during the same period, according to the National Association of Realtors. Despite the continued bad news, some in the Upper Keys real estate business say there is a silver lining. Larson, who handles marketing for Marr and American Caribbean, says that agents at both offices are reporting an increase in showings and phone calls. Shawn Wilson, president-elect of the Florida Keys Board of Realtors and an agent for Prudential Keyside Properties, makes a similar observation. "I am seeing a trend upward," she said. "We're showing more property. Of course, prices are coming down, but they are reaching a point where they should have been at anyway." A well-known Yale economist, however, cautioned last week that home prices nationwide could fall a lot further. "Basically we're in uncharted territory," economist Robert Shiller, who developed the Standard & Poor's/Case-Shiller home price index, told the Associated Press. "It seems that we have developed a speculative culture about housing that never existed on a national basis before." One sector of the Upper Key housing market did go up during the first quarter of this year. Seventeen condominiums closed between Jan. 1 and March 31, five more than were sold during the same period last year. The average sales price of each unit also went up, from $579,000 last year to $675,000 this year. The numbers were skewed by eight closings at Mariner's Club in Key Largo, which held an auction of unsold units in February. Foreclosures upBy Steve Gibbs Free press Staff UPPER KEYS — The wave of home foreclosures following the nationwide housing market collapse and credit crunch continues to surge through the Florida Keys. In fact, local foreclosures are outpacing home sales. Through April 16, the Clerk of the Court at Plantation Key had recorded 101 foreclosures. As of March 31, 55 single-family homes or condo units were sold, according to Multiple Listing Service statistics provided to the Free Press. At the current rate more than 300 foreclosures would occur in the Upper Keys by year's end. In 2007, the clerk recorded 222 foreclosures in the Upper Keys. So far this year, 1,874 foreclosures have been recorded county-wide. In 2007 there were 2,000 county-wide. Foreclosures occur when a lender seizes property from a borrower for failure to meet monthly payments. One day recently Monroe County Circuit Judge Luis Garcia had 20 foreclosure actions on his docket. "There has been a steady increase in foreclosures over the past year," Garcia told the Free Press. "Monroe County has initiated a mediation program that is available to some homeowners as a last attempt to save their property." Mediation is limited to those with homesteaded property who have filed for help with the court. Some local experts say the foreclosure spike is worse than people think. "People in Monroe County have underestimated the severity of the situation," said Debrah Bennett, owner-broker of Island Paradise Properties. "We have this mentality that the Keys are different. This is an epidemic in the United States that effects the world financial market." Bennett says foreclosures disenfranchise families and devalue residences around them. She blames loose lending practices, especially "no documentation" loans, that enabled borrowers to qualify for loans with little regard to their ability to meet monthly payments and deal with adjustable interest rates. "The mortgage banking industry was making loans based upon a person's word," Bennett said. "They weren't required to check on their ability to repay the loan." Harry Teaford, branch manager of Fidelity & Trust Mortgage Company in Tavernier, calls them "liar loans." Mortgage houses, he said, were making loans with little or no down payment, failing to require borrowers to meet the "Four Cs": capacity (the ability to pay), character (other holdings), collateral (real property ownership) and credit (a good financial history). By not factoring in character and collateral, lenders laid the groundwork for easy loans to come back to haunt a broad cross-section of society. Lenders incorrectly assumed that the rate of increase in the value of mortgaged homes would make any loan good if a foreclosure was required. But with falling market values and growing home inventories, that has not been the case. Patricia Mull, CPA and owner of Mull Associates, divides mortgages into three categories for the layman: "good, bad and stinky." "[Those 'stinky' loans] got rated better than they are and the big houses sold them overseas. These bad loans are given a fancy name like a Structured Investment Vehicle, or a 'derivative,'" she said. Big brokerage houses pooled huge assemblies of mortgages and sold them as a single investment world-wide. As those investments soured due to foreclosures, the "liar loans" began to show their true value. "The foundation upon which it is based collapses. That sends a ripple effect," Mull said. "It's not a ripple effect. It's an earthquake," Teaford added. As to how to fix the foreclosure crisis, Mull offered a remedy. "Time will fix it," she said. "The free market will reach equilibrium. It may take two, three or five years. Greed caused the problem but time and the free market will heal it." sgibbs@keysnews.com
| Pilot House back on market By Steve Gibbs Free Press Staff KEY LARGO — The Pilot House Restaurant and several former Cay Clubs properties on surrounding waterfront are still on the market after a recent mortgage-holder bidding. The properties have been in foreclosure and are expected to be sold at 60 percent below their appraised market value, says George Wilson of Prudential Keyside Properties. "I fully expect [this package of properties] will be sold at the full asking price in short order," Wilson said. "It's a real estate agent's dream. It's priced right." Wilson is charged with selling the property for its owner, JDI Realty of Chicago, a national mortgage company. JDI, which picked up the properties, acquires income-producing properties, both as a sole owner and as a joint venture partner, throughout the United States. The properties in question, located on Seagate Boulevard, consist of 1.54 upland acres with two restaurants, a marina with 37 boat slips for boats up to 70 feet and dry storage for 48 boats, as well as gas docks and 44 parking spaces. The properties were purchased by Cay Clubs, but as the real estate market soured, so did Cay Club's investment. Cay Clubs imploded in late 2007 after the market collapsed. It has now lost most of its holdings to lenders such as JDI Realty. Last year, the Pilot House property went into foreclosure and JDI Realty, in what Wilson describes as a "friendly foreclosure," reclaimed ownership two weeks ago in Key West. Wilson, who listed the properties last Thursday, said several investors have inquired about the properties. "I immediately found six interested parties showing significant interest. I already have [verbal] offers in excess of $7 million," Wilson said. "I have one offer in hand and expect three more offers soon." Wilson expects both restaurants and the marina to continue to operate and serve the public. The package also includes office buildings, two single-family homes near the Pilot House and other parcels in Key Largo, as well as some vacant parcels in Islamorada. sgibbs@keysnews.com | |
