Record Foreclosures in Key West & Florida Keys

The number of defendants for foreclosure filings in both Key West and Monroe County (all of the Florida Keys) has hit an all-time high, according to the Monroe County Clerk of the Courts website.

Key West Chronicle searched the County Clerk’s website for foreclosure filings since 1989 for Key West and Monroe County.

Those searches reveal that the number of defendants in foreclosure filings for this year has shattered the all-time highs and is already 50% above last year’s record numbers.

Keep in mind these numbers show the number of defendants in these cases, and therefore overstate the number of actual properties since many properties have multiple owners/defendants. Also, many of the foreclosure filings are for timeshares – which begs the question: “Is there something wrong with buying a timeshare in Key West?” – but that topic may be for a future post.

Still, this is a useful view of the condition of the real estate market in the Florida Keys.

Year	“Foreclosure” defendants, Key West	“Foreclosure” defendants, Monroe County
2007 (so far)	1467	2000
2006	855	1305
2005	317	617
2004	271	587
2003	454	883
2002	568	1202
2001	512	1018
2000	450	870
1999	324	693
1998	373	723
1997	549	865
1996	170	310
1995	72	117
1994	16	64
1993	0	7
1992	3	5
1991	0	1
1990	0	0
1989	0	1

Some have lately blamed the press, media, and blogs like this for contributing to the demise of the real estate market.

Instead, they should blame:

1. Lenders – who lost all sense of reason while lending money with no equity and questionable credentials
2. Developers – as they overbuilt like mad, responding to a temporary surge in demand from the loose lenders (and who also continue to overbuild – I mean, who on earth is going to buy these ridiculously expensive projects like Harbor House, Steam Plant, Casa Marina Club, Cay Clubs, King’s Pointe, Parrot Singh ;-D, Swift’s Stuff, the Spottswood Hotelzone, or the countless other developments? And yet they keep building – further flooding the market with property for sale
3. Realtors – who were there throwing gas on the fire, convincing the public that they couldn’t lose
4. and Flippers - who saw the dollars and sucked up every crumb left over.

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Photos: Gloria Estefan Free Concert in Key West

Gloria Estefan treated Key West to a free concert as part of a television production for the Univision Network.
The grammy award winning singer sang on the waterfront of a local Key West hotel. Key West is closest point in the United States to her homeland of Cuba.
The concert was part of the debut of Gloria Estefan's new album "90 Millas" - a reference to Key West's nearby island neighbor.
She was backed by her impressive band - with a stage full of percussion - congas, bongos, timbales, and more.
It was a treat to see her, listen to her magnificent, and appreciate the beauty that is inherent in Cuban culture.
THANK YOU GLORIA!!! MUY BIEN!!!!
Here are photos from the event:

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Tip of the Hat to Rock Trueblood

Fellow local blogger Rock Trueblood has has called shenanigans on the Key West Citizen.

The lead article in yesterday's local paper detailed significant problems the "frenzied" developer Cay Clubs is facing. The problems are so serious, the Citizen writer speculated Cay Clubs has bankruptcy looming.

But today, all traces of the article have disappeared from the Citizen's website. There is no correction printed today - so one can only wonder why this particular article is gone.

Fortunately, Rock Trueblood has published the major points of the article on his blog. In his post, Rock speculates on what is going on:

"Key West is such a small town that the paper is inextricably dependent on advertising revenue to make up for its tiny circulation. And no ad revenue is bigger than Real Estate.
I feel someone, somewhere, with ties to Real Estate interests made a big ass phone call to the Citizen and asked, cajoled, pushed or even threatened Citizen bigwig with the loss of ad dollars if that Cay Clubs article wasn't erased online."

We would welcome an explanation from the Key West Citizen.

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Flippers in Key West Losing Their Guayaberas

Flippers, who in a frenzy bought up Key West and drove the affordable housing problem to crisis level - are now taking big losses.
Here are a few of the many properties that are selling at a loss:

Address	Date Purchased	Price Paid	Currently Offered For	$ Loss
1116 Whitehead Street	April 2004	$485,000	$309,900	-$175,100
1213 Watson Street	August 2005	$580,000	$369,000	-$211,000
1013 Howe Street	September 2004	$500,000	$429,000	-$71,000
206 Olivia Street	June 2005	$607,500	$433,000	-$174,500
2811 Staples Ave.	Sept. 2004	$661,300	$433,500	-$227,800
1202 Margaret St.	March 2005	$790,000	$669,000	-$121,000
1023 Packer St.	April 2006	$799,000	$699,000	-$100,000
4 Go Lane	May 2005	$1,450,100	$1,299,000	-$151,100
3425 Flagler Ave	Nov. 2004	$595,000	$425,000	-$170,000
3314 Northside Dr. #101	May 2006	$541,000	$430,000	-$111,000
1202 Margaret St.	March 2005	$790,000	$669,000	-$121,000
3719 Donald Ave.	March 2005	$828,000	$799,000	-$29,000
31 Seaside South Ct.	August 2005	$1,138,100	$995,000	-$143,100
1524 Rose St.	January 2005	$985,000	$845,000	-$140,000
3327 Harriet Ave.	February 2004	$370,000	$319,000	-$51,000
3308 Eagle Ave.	Sept. 2004	$485,000	$329,900	-$155,100
3324 Eagle Ave.	Dec. 2004	$520,000	$338,900	-$181,100
30 Kingfish Lane	Jan. 2005	$575,000	$365,000	-$210,000
3326 Eagle Ave.	Dec. 2004	$587,000	$375,000	-$212,000

Is the era of flipping over?Can we go back to fishing, being about more than money, and having neighbors?I hope this is GOODBYE flippers. You will not be missed.

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Key West Condo Prices Tumbling

Now that we are done fighting over the old Jabours Trailor Court property and the developer's plans to build luxury condos there, lets take a look at how sales are going and the Key West condo market in general.

The current Key West Multiple Listing Service shows 21 of the 32 Harbor House units for sale. There may be more, but that is all that is in the MLS. The developer, Keys Caribbean, has been trying to sell these very expensive condo units for the past couple years - so selling only one-third is a clear indication that it is not an easy sell.

Why haven't they been selling?

Maybe it is the outrageous price they are asking - at least $1000 per square foot - meanwhile condo prices in Key West are being slashed and most are now selling for less than $500 per square foot. Condos were the most over-priced, over-speculated, and over-built part of the Key West housing bubble. Now that the bubble has burst, prices are dropping quick.

Here is look at the current Key West condo market.

Key West condos sold over the past 2 months (There have not been many sales of condos lately, but here are the few that have occurred recently):

• 11 Whistling Duck Ln, Selling Price = $394,000, price per square foot=$372
• 1075 Duval St 2R, Selling Price = $670,000, price per square foot=$547
• 208 Southard St, Selling Price = $540,000, price per square foot=$794
• 146 Golf Club Dr, Selling Price = $392,000, price per square foot=$486
• 3930 Roosevelt Blvd E-408, Selling Price = $390,000, price per square foot=$319
• 3314 Northside Dr 74, Selling Price = $250,000, price per square foot=$238
• 1025 Whitehead St A, Selling Price = $360,000, price per square foot=$453
• 1207 William St 5, Selling Price = $250,000, price per square foot=$498
• 816 South St 2, Selling Price = $325,000, price per square foot=$508
• 220 Golf Club Dr, Selling Price = $506,000, price per square foot=$452
• 1012 Packer St, Selling Price = $475,000, price per square foot=$618
• 3301 Duck Ave B, Selling Price = $412,500, price per square foot=$180
• 3312 Northside Dr 314, Selling Price = $278,000, price per square foot=$527

Condos on the market (there are over 400 listed, here are a few of the lower priced units):

• 1830 Fogarty Ave, Price: $199,000, Price per sq. ft: $484
• 409 Margaret St, Price: $259,000, Price per sq. ft: $621
• 1830 Fogarty Ave, Price: $279,000, Price per sq. ft: $494
• 1016 Howe St, Price: $290,000, Price per sq. ft: $2,014
• 815 Pearl St, Price: $298,000, Price per sq. ft: $662
• 818 Whitehead St, Price: $309,750, Price per sq. ft: $798
• 1221 3rd St, Price: $314,500, Price per sq. ft: $419
• 1009 Packer St, Price: $315,000, Price per sq. ft: $630
• 614 Whitehead St, Price: $325,000, Price per sq. ft: $876

Some of the most overpriced condos on the market:
Harbor House:

• 223 Elizabeth St,Unit# WU102, Price: $2,750,000, Price per sq. ft: $1,297
• 223 Elizabeth St,Unit# W 105, Price: $2,395,000, Price per sq. ft: $1,167
• 223 Elizabeth St,Unit# L 102, Price: $2,495,000, Price per sq. ft: $1,150

Sea Isle Town Homes:

• 909 Windsor Ln, Price: $1,900,000, Price per sq. ft: $1,086
• 909 Windsor Ln, Price: $1,900,000, Price per sq. ft: $1,086
• 909 Windsor Ln, Price: $1,900,000, Price per sq. ft: $1,086

Santa Maria Resort Condominium:

• 1401 Simonton St Unit# 7, Price: $1,369,000, Price per sq. ft: $1,449
• 1401 Simonton St Unit# 16, Price: $1,500,000, Price per sq. ft: $1,587
• 1401 Simonton St Unit# 28, Price: $1,275,000, Price per sq. ft: $1,406

The condo market is flooded with properties for sale - over 400 are listed in the MLS and many more exist that are being sold by owners or developers and are not included in these numbers.
Sellers should adjust their prices to the current market if they hope to sell anytime soon. And buyers contemplating purchasing a Key West condominium should be warned that a wave of foreclosures are likely to hit the market as people dump their properties with negative equity. My guess is there is going to be a fire sale for condos for at least the next two years.

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Cay Clubs Merger Renegotiated Down

The proposed merger/acquisition of Cay Clubs by Key Hospitality Acqusition Corp has been renegotiated down reflecting the stumbling second home market in South Florida.

According to Securities and Exchanges Commission filings this week, Cay Clubs' owners Dave Clark & David Schwarz will receive 46.7% less shares than previously proposed. This, according to the filing, "makes the proposed transaction fair to Key's stockholders". (Dave Clark owns two-thirds of Cay Clubs and David Schwarz owns one-third.) So, instead of 50 million shares, the two will recieve a total of approximately 26 million shares. "For purposes of satisfying an indemnification claim, shares of New Key common stock will be valued at $7.50 per share" - this equals nearly $200 million dollars in stock value for the two. Dave Clark will have nearly $132 million on paper.

Big Incentives have also been put into the merger which will reward the two if the company reaches certain financial goals:

"the Clark Trust and Mr. Schwarz may receive up to an aggregate of 32,000,000
additional shares in accordance with the following performance criteria: (i) for
2008, 6,000,000 shares will be earned and issued if net income exceeds $42
million and an additional 5,000,000 shares will be earned and issued if net
income exceeds $52 million; (ii) for 2009, 6,000,000 shares will be earned and
issued if net income exceeds $60 million and an additional 5,000,000 shares will
be earned and issued if net income exceeds $70 million; and (iii) for 2010,
5,500,000 shares will be earned and issued if net income exceeds $72 million and
an additional 4,500,000 shares will be earned and issued if net income exceeds
$82 million."

My previous post about Cay Clubs has gotten a lot of comments. One is signed by Dave Clark, and with the sincerity and passion it includes, I'd believe it was written by him. Who knows - maybe just a huge fan. Then again, it does include his phone number.
Anyway, I don't have anything against Dave Clark. However, I do not think it is "better for the Keys and the people who live here to have a company that is located here, loves the community, cares about the environment and takes the time necessary to fully engage the community before moving forward with re-development plans make purchases than an outside company with no long term commitment or local employees?" The wholesale consuming and regurgitating of the Keys is what is wrong. As the old saying goes: "Don't piss on my leg and tell me its raining".

Mr. Clark, I don't doubt that you are a nice guy and care about your community and give to worthy causes. But rabid overdevelopment, rolling the dice with the community, especially by novice companies, is not what I'm a fan of.

If the merger goes through, Cay Clubs will be a public company soon - and questions of their viability will be answered as their balance sheets come to light.

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