According to the chart (above) from Zillow, prices for Key West houses, condos, and other residential real estate are showing a sharp decline since November 2008. Currently, Zillow shows "market value" for the Key West residential market at $472,000 - a 14% decline since November 2008.
Oversupply, along with a list of other problems, continues to weigh heavily on the Key West market. And much of that oversupply is from distressed sellers. Here is a map from RealtyTrak showing 219 properties that are either pre-foreclosure, bank owned, auction, or govt. owned:
Here is a look at the latest numbers from the MLS:
- 922 residential (includes single family, mobile home, condo, timeshare, 3-4 units, townhouse, duplex, and other property rights)
- 417 residential single family
- 400 residential condo & townhouse
If you take a look at the 10-year Zillow chart for Key West, the long-term uptrend line would be at approximately $350,000. This translates into another 25% decline - if it happened in the short term. It is also possible that prices won't deteriorate to that level if enough time transpires to reach the trend line further to the right.
Here is the 10-year chart with a long-term uptrend line drawn in red.
But there is some good news.
Housing is definitely getting more affordable.
With mortgage rates now at 5% and property starting to sell for "affordable" prices (meaning less than the so-called "affordable housing" that the local developers have put up), it now may make sense to look for a place of your own.
Take a look at these numbers:
- 165 single family, condo, or townhouse properties priced at $350,000 or less
- the least expensive is a $128,500 condo at Santa Clara Condominiums (506 square feet). With a 5% mortgage and 10% down, your principle and interest payment would be $618 per month. Add on $300 per month for condo fees, taxes, and insurance and you are buying a condo in Key West for less than $1000 per month.
- the least expensive single family home is $169,900 at 3210 Eagle Ave (1032 square feet - Bank owned). With a 5% mortgage and 10% down, your principle and interest payment would be $821 per month. Add on $500 per month for taxes and insurance and you are buying a house for the same cost as rent.
Don't have 10% to put down? Call the City of Key West. They are planning to loan up to $20,000 to workers for downpayments (20 people initially).
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