Monday, February 07, 2005

The Real Estate Monster of Key West

Friends, last night, went on about the state of things in Key West. Change has sped up in a town who's once-most-endearing trait was it's slow pace.
The supply side of the housing equation has been rigged, driving the price of homes into stratospheric ranges. The Real Estate Monster of Key West has such an appetite, that it is beginning to eat the fiscal engine of the city: tourism. It has been quoted by city officials that 10% of the hotel rooms have applied to convert to luxury condominiums. When we sell off the hotel rooms, we sell off the visitors and all the amenities that go with it. Clearly, remove the tourists and you don't need three hundred fishing guides, twenty snorkeling boats, 40 attractions, and 200 restaurants and bars to service a population that isn't even on Key West for seventy percent of the year.
Maybe that does solve the affordable housing problem. Get rid of the industry, remove the workers, and you can have a retirement/speculator community, just without any businesses. There she sits, ninety miles from the mainland...Rising a few feet above the Gulf of Mexico and the Straits of Florida. No people=no problem.
Everything seems to be for sale, and for prices that make people rich or priced-out of the community. This threatens the city in ways that no other community has experienced.
So, friends are discussing the foreboding change on Key West. And I'm reminded of what someone once wrote about the island, termed "sliding baselines". Basically, everyone gets here, looks around, and says "This is great! Look at this place". But in five years, they are saying "Man, I remember what this place was like five years ago. It's going downhill." Yet someone new is always arriving, saying the same thing, "This is great! Look at this place!". Sliding baselines.
I think that I remember better days in Key West, and then a true old-timer tells me of fishing for yellowtail snapper off of Mallory Square, the water being crystal clear up to the docks. And I remember, that my complaints about the good-old-days fit into the sliding baselines formula. Like our new neighbor down the street who looks lovestruck. He's fallen for Key West, and is happy he spent the $500,000 for the 500 square foot condo.
One thing I'm pretty sure. Speculative frenzies end with a particular smashing fit. Realtors are rabid on the island, popping up like mushrooms from cow dung. It is not widely known that the realtors have cornered the market. Homes put up for sale have a very good chance of being bought by a real estate agent, only to be quickly resold with a hefty tax applied. These home would have normally been bought by a local, community member. Today, most sellers having held their home for decades, calls a realtor, and doesn't realize that they are dealing with someone who's interests are not aligned with their own. The realtor ends up with these properties that are marketed to out-of-state, second-home buyers. A real shame, and I suspect that the current mayoral administration hasn't grasped the consequences.
Buckle up boys and girls, my hunch is this sure bet has longer odds. It's only beginning to get wierd. Get your rubbery neck ready.
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