Bahama Village Needs Your Support

At tonight's Key West City Commission meeting, the Bahama Village Community Land Trust (BCCLT) needs YOUR support.
The Mayor of Key West, Morgan McPhearson, is attempting to undo the will of the majority of Key West citizens. We have voted, in a referendum, to lease the BCCLT 6 acres of land at the Truman Waterfront for housing, community centers, and other projects in support of one of Key West's most historic neighborhoods - Bahama Village.
Instead, the Mayor has been championing a water park. I know of no one that wants a water park.
Further, the Mayor wants to get control of the special funding that has been set up to revitalize the neighborhood.
It is a mystery why the Mayor no longer is interested in representing the will of the citizens, but it is starkly reminiscent of the County Mayor Mario DiGennaro's methods who seemed to never say no to a developer.
The Gang of Three has been broken up and mostly voted out (thank goodness), and the Mayors should read the writing on the wall: THEY ARE NEXT TO GO.
Please support the worthwhile efforts of the Bahama Village Community Land Trust and go to tonight's City Commission meeting at 6pm at City Hall.
And to Norma Jean Sawyer and the rest of the BCCLT, you have my complete support.

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Poll: Do YOU Like The Water Park Idea?

I'm still mystified by the mayor's idea for a "water park" at the Truman Waterfront.

I haven't met a local who likes the idea. The Citizen's Voice, our local anonymous rant column in the newspaper, is filled with people questioning the rational of a water park.

Who knows? Maybe it's all a move to freak out the Truman Annex crowd - something like: Put up a gate on Southard Street?! Fine! We'll build an amusement park next door!

But seriously, let's hear YOUR opinion:



If you can, let others know about the poll so we can get as many opinions as possible. And feel free to add your comments to this blog post to discuss the water park idea further.

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Key West Street View Now Available on Google Maps

Street View, a Google Maps project photo-documenting the streets of the world, is now available for Key West.

To see the images:

• Go to www.google.com/maps and search/zoom to Key West.
  
• Click the grey "Street View" button on the upper right corner of the map.
• Next, you'll see blue highlighting on the streets that have images in Street View. Click anywhere on a highlighted street to see the images Google has captured. (Also, you can drag the yellow human icon to a place you are interested in.)
• Once you see an image, navigate along the streets using the arrows overlayed on the pictures.

You never know who (or what!) you might see. And this has a few privacy advocates concerned. In response, Google has implemented a face-blur technology that prevents most people from being recognized.

Pretty cool technology.

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Make Them Pay for Sending You Junk Mail

Annoyed by the never-ending credit card offers filling your mailbox?

Wouldn't it be great to make them pay for sending you all that junk?

You can!

Inside every credit card offer is a return envelope - postage to be paid by the credit card company. Mailing this envelope doesn't cost you anything - the credit card company pays for the postage. And depending on the envelope's weight, the more you send them, the more they pay. (My research says you can send up to 70 pounds!)

Here are a few ways to increase their cost:

• Stuff the envelope with their entire bloated solicitation, and a note saying "please do not mail me anything".
• Stuff the envelope with other junk mail that you think they may be interested in: Publix fliers, Penny Savers, or fifty Cabela's catalog pages...whatever you can fit into the envelope.
• Stuff the envelope with an advertisement for your business. Of course they won't be buying anything, but the irony is sweet.
• or get nuts with the idea, like this guy, and tape the return envelope to a box with something heavy inside.

The credit card companies will likely keep sending you offers.

But maybe one day, if enough people do this, the credit card companies will relent and leave our mailboxes alone.

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Emm - What is a Waterpark?

Seriously, what on earth is the Mayor talking about?

A "world class waterpark" on the Truman Waterfront property?

What does that mean? Log flume rides? Water slides?

Am I the only one who finds the whole thing strange.

Key West is an island (meaning surrounded by water). There is certainly no shortage of water to play with/on.

Plus, there is a community pool just a short walk from the Truman Waterfront.

So what on earth is the Mayor talking about?

And what's with his poor treatment of the BCCLT (Bahama Conch Community Land Trust), Norma Jean Sawyer, and the wishes of the voters of Key West who passed a referendum granting the BCCLT a 99 year lease for 6 acres.

Norma Jean Sawyer has probably done more for affordable housing than the Mayor has. She is admirable, an asset to our community, and does not deserve the maligning Mayor McFearsome has lobbed in her direction.

Meanwhile, the budget for Key West is in critical condition under the stewardship of the Mayor. Hasn't the Mayor already cost us enough with his water play toys (aka Vandenberg). Now - who really has mismanaged funds?

If the mayor has a real problem, he should submit those details to the public.


What do you think?

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The Radiators in Concert in Key West

July 3rd may be the musical highlight of 2008 for Key West when one of New Orleans' favorite bands, The Radiators, play the Ocean Key House pier.

The Rads, as they are known by their fans, are no ordinary band - this is a top notch group that has been playing funky "swamp approved" music for nearly 30 years.

Many consider The Radiators to be one of the original jam-style bands. Their repertoire is immense - you never know what you'll hear - from originals to covers.

Expect a great show showcasing deep grooves, extended jams, New Orleans funk, and amazing musicianship.

This band is tight, fantastic live, and should be well worth the $20. I haven't been this excited since Burning Spear was supposed to play Key West (Hurricane Georges cancelled that).

If you haven't seen this band before, embedded below are a couple Radiators videos.

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Idaho Rafting

Considering that Key West is an ideal vacation destination, tourists always ask: "Where do you like to go on vacation?"


For me, I love to go to the mountains for hiking, camping, mountain biking, and white water river rafting.

One of the best trips is with this cool Idaho rafting guide service. Their location is convenient for Sun Valley and Stanley, Idaho vacations and offer some of the best overnight rafting trips on the Salmon River & Colorado River - known for excellent white water rapids and incredible wilderness scenery. These are all-inclusive trips and include camping equipment, delicious meals, and professional local guides.

They also offers single day trips - as well as a other outdoor activities including mountain biking and fly fishing (there is amazing fresh-water flyfishing on the Salmon River. The fishing guides know where to fish for the local Rainbow & Cutthrout trout).


Here are links to their various pages:

• Idaho Whitewater Rafting
• Rafting in Idaho
• Whitewater Rafting Idaho Group Trips
• Idaho River Rafting
• Whitewater rafting in Idaho
• Idaho mountain biking trips
• Idaho fly fishing guides

This year, the rivers will be especially exciting since the surrounding mountains received HUGE quantities of snow. As the snowpack melts, the rivers will swell - creating plenty of whitewater.

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Key West Hotel Bargains, Deals, & Discounts

Key West hotel rates are coming down, and this is good news for local businesses and visitors alike.

Over the past couple years, as Key West saw many hotel rooms go offline during renovations and conversions to condominiums (and hotel-miniums), room rates went to all-time highs.

Now, most of those hotel rooms are back online and rooms rates have come back down to earth.

And if you are looking for a bargain, visiting Key West this summer will save you a lot of money.

A search of discounts and deals for Key West hotels show bargains (we used http://www.keywesttravelguide.com/key-west-hotel-map.html ) look for the Key West specials and deals link with the red save tag):

• Old Town bed & breakfast inns as low as $129 per night
• Four-star Old Town resorts as low as $179 per night
• and super-budget rooms on the island at under $100!

This more than makes up for the $30 extra it will cost in gas for the average car to drive here from the mainland.

Summer is a great time to visit Key West. Room rates are low, it's less crowded, and the fishing is excellent.

Plus, the sea temperature is warm and very comfortable, at least 80 degrees, and you can snorklel, swim, and dive to your heart's content.

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WARNING: Citibank Credit Cards Screwing Over Best Customers

Watch out if you have a Citi Bank (Citi Cards) credit card. The big bank is desperate for money due to losing billions of dollars in the mortgage meltdown.

Citi Bank is raising interest rates it charges to its best cardholders - regardless if they have a perfect payment history, excellent credit score, and have never been late with any creditors.

This month, Citibank inserted a "Notice of Change in Terms and Right to Opt Out" in cardholders' monthly statements.

The notice reads:

"We are increasing your variable APR for purchases. Your purchase APR will equal the U.S. Prime Rate plus 7.99%, with a minimum APR of 13.99%..."

In my case, my Citi Bank card (a Platinum Select from a major brokerage account - this card is supposed to have very favorable rates), will see its interest rate rise from 9.5% to 13.99%. This card has never had a late payment (and I have never been late with any creditor, so this is not a "universal default" issue. Plus, my credit score is very good and has seen no deterioration)

According to a Citi Card supervisor, the move is "widespread" and has nothing to do with your credit history. In her words, "It is a banking decision." The representative expressed embarrassment and said "I don't know why they are doing this".

The notice does allow cardholders to "opt out" of the increased rates - but the account will be closed when the card expires. Though I won't close the account for fear of harming my credit rating, I will never again use it my Citi Bank credit card.

In the past, I have lamented about the predatory credit card industry - with terms equivalent to loan sharking.

And I expressed my real sorrow for those who fall on hard times and are at the mercy of the credit card industry.

Some commenters to this blog blamed the card holders, writing:

"As to credit card issuers being out of control... They aren't. They are operating within the law, and it is rather credit users who exhibit a lack of control."

But in reality, the credit card industry is totally out of control.

Fortunately, there are regulations and new laws being created that will finally reign in some of this abuse (the bills could go much further, but the credit card industry has lobbied and bought off more than a few politicians).

With looming regulation coming, Citi Bank is making one last ditch effort to screw as many people as possible before time is up.

Shame on you Citi Bank.

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No Big Mystery: Still $1000+ Per Sq. Foot & Still Not Selling

In January, the Key West Chronicle blog reported that the Harbor House luxury condominium project was not having much success finding buyers.

The local MLS, at that time, showed 29 of 32 units available and priced at approximately $1000+ per square foot.

Another post questioned if these projects were viable - asking "Will they make it?".

A regular and respected commenter erroneously computed the condo-tel investment potential when he wrote:

"It's my guess that most of these EXCLUSIVE properties have a large exclusivity premium built in and that even if it's necessary to reduce selling prices by 20% (or throw in incentives), there's still a substantial profit in these units, most of which, after all, include a transient rental license that can help to pay the mortgage. The developers talk about these as $500 a night and more rentals. I'll do the math: $500 per night at 80% occupancy = 292 days X $500 = $1,460,000. Take away another 20% for management fees and condominium charges, that leaves a paltry $1,168,000 to cover mortgage and taxes."

The correct math, using his assumptions, would be 292 days x $500 = $146,000. Taking away another 20% for mgmt. fees and condo charges leaves $116,800.

However, Key West hotels are at $500 per night only a few weeks of the year. For the rest of the year, these condos will likely rent for much less. If you hope to hit 80% occupancy, the average rate may be closer to $300 or less. Also, the income a buyer would receive is TAXABLE income - so take another 25% off for that.

Here is the correct math: 292 (80% occupancy) x $300 (per night average) = $87,600. Take away a 20% mgmt/condo fee = $70,080. And remove the 25% taxes = $52,560 in income. That equals $4380 per month - less than half what a mortgage will cost, at 6% with 20% down, on the least expensive unit in the MLS.

And this is if everything goes "right".

Today, over 4 months later - and beyond the traditional real estate selling season - there are still 29 of 32 units available and "active" on the MLS. Amazingly, the prices listed are still stratospheric: $1,965,000 to $3,120,000. The developer, Keys Caribbean, is offering a "Special pre-construction pricing starting at $1,710,000" on their website.

The developer has built a model home that towers over Lazy Way Lane and plans to build more as buyers come forward.

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Mayor Plans to Designate Country Song the Official Song of Key West

When you think of Key West, what music comes to mind?

For many it's Jimmy Buffett - whose career started here on the island now synonymous with the song Margaritaville. Each year the Parrothead fan club holds its Meeting of the Minds in Key West.

For others, it's Bahamian music - reflecting on the island's Bahamian roots, and today still well represented by the Junkanoos.

Latin music is also a part of the island - with its historic ties to Cuba. And lets not forget the Village People's song Key West.

But how about a country song? Don't laugh.

During the upcoming Songwriters Festival, the Mayor of Key West, Morgan McPherson, is about to designate the country song "Key West Address" by James Slater (James who?) as the "official" song of Key West. (There is only one country radio station and one country bar in Key West)

Listen to the song below:


Sounds to me like a Jimmy Buffett knockoff. If you're going in that direction, then why not designate a Jimmy Buffett song?

What do you think? Should the Mayor decide for all of us the "official" song of Key West?



What tune would you vote for?

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Massive Migration of Birds in Key West

Birding enthusiasts should be well rewarded in Key West - if current radar indications are correct.

According to radar images, there is a massive bird migration underway from Cuba to Key West, and then on to the Mainland.

The radar image, attatched to this post, shows the migration from last night to this morning.

So, keep an eye out. Visit Fort Zach and other bird friendly places. You will likely be rewarded with more than a few different migrating bird species.

If you see something interesting, please comment here and share your sightings with the rest of the birding world.

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Chart: Foreclosures in Key West's Most Expensive Neighborhoods

According to a map of Key West generated by the RealtyTrac website, Key West is still deeply in the midst of a foreclosure wave. This will continue to pressure prices for at least the foreseeable future.

A search of the Key West zip code (33040) on the RealtyTrac website returns 646 properties: 171 pre-foreclosure, 22 auction, 87 bank-owned, 23 for-sale-by-owner (FSBO), and 343 resale homes. The chart, above, shows all the properties in various stages of foreclosure (except the "resale" properties).

As the chart shows, many of the pre-foreclosures are in Old Town, the most expensive part of the island - an area thought to be more immune to foreclosures and dropping prices.

Click on the map, above, to see a larger view.

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Foreclosures & Other Forces Pressure Key West Market

Countrywide, America's largest mortgage bank, currently has 14,451 REO properties for sale on its website (click here to see the Countrywide website inventory) - these are foreclosures that the bank now owns. This totals nearly $3 billion in current listing price. In Florida alone, Countrywide is trying to unload 1,561 properties they have foreclosed on for a total price of $315,324,354.

Key West is not immune. Currently, the Countrywide website lists 10 Key West properties that are REO = Real Estate Owned (by the bank, that is).

The chart included with this post shows the rapidly increasing number of Countrywide REOs since the beginning of the year.

Despite real estate prices falling significantly these past two years, the number of properties for sale in Key West remains stubbornly high. Currently there are over 1000 residential listings for the island of Key West - far outweighing the few small number of transactions occurring - and roughly the same as two years ago. Until the inventory level drops and more closely meets demand, prices have no way to go but continue down.

Even if the high inventory levels magically disappeared, there would still remain downward pressure on prices due to:

1. the very uncertain state of hurricane insurance in Florida. Hurricane insurance already costs roughly 2% of your houses value each year. Currently, Citizens' Insurance (the State-backed insurer of last resort) is proposing doubling premiums. Though valiant efforts by grass-roots organizations have managed to keep increases at bay, when the next hurricane hits Florida, all bets are off.
2. the Florida budget is a disaster - and the county budget isn't much better. Currently, the Florida legislature is working on a budget $5 Billion less than last year. This will devastate many health and educational programs statewide. One has to recognize that this contraction in spending will have its own recessionary effect on Florida.
3. the US is, by some measures, in a recession. House prices will not make any progress upward with these headwinds.
4. the developers throughout the Keys are still planning to build hundreds more luxury units, which will more than meet any increase in demand
5. banks are in peril due to their own lax lending standards and falling house prices. Even if people wanted to buy, they would have difficulty finding financing - especially since South Florida is just about the epi-center of the national housing crash.
6. despite the big drop in real estate prices in Key West, many sellers continue to list their properties at stratospheric levels. Anyone listing for more than $500 per square foot should lower their price if they want to sell their home anytime soon (most property is selling at around $350 per square foot and less). Many are probably upside down, and will end up foreclosed upon, further pressuring prices.
7. housing prices in the Florida Keys dwarf income levels - an unsustainable imbalance.
8. many more foreclosures are coming. despite interest rates being lowered, mortgage rates haven't fallen very much. Borrowers are "upside down" and trapped in variable-interest-rate loans. Foreclosures pressure housing prices lower since banks are eager to drop prices in order to sell property and raise capital.

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Northern Lights Coming to Southernmost Point?

According to an article in the latest issue of Wired Magazine, the Sun is entering a more volatile period, characterized by "solar windstorms" - sunspots that bubble and send plumes of "electrons, protons, and heavier ions toward Earth at nearly the speed of light." (The photo shows the sun "flaring")

Periods of higher sun storm activity occur roughly every 11 years and can cause problems with electrical grids, television broadcasting, and satellite communication.

The peak activity from this storm is predicted for 2012.

Interestingly, the article notes:

"Auroras occur when waves of charged particles light up gases in the upper atmosphere. As more particles stream in, the so-called aurora oval grows, bringing the "northern lights" as far south as Key West."

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Chart: Key West Real Estate Declines Worsening

According to a chart provided by Zillow.com, the Key West, Florida residential real estate market is still in a steep decline which has worsened since late-January. The chart, pictured above, details "Market Value Change" in residential real estate over the past 12 months for Key West and the 33040 zip code.

The Key West real estate market is still flooded with inventory (more is in development) and sales are slow. As of this morning, 1053 properties are listed in the residential category of the Key West MLS.

Also noteworthy is that minimum price-per-unit has fallen to levels not seen in many years. For example, currently listed are condos that are listed for as little at $159,000. Just a few years ago, you'd pay twice that, minimum, for anything residential.

Key West is not immune to the foreclosure wave hitting the United States. The nation's biggest mortgage lender, Countrywide, currently lists 8 Key West properties they now own, due to foreclosure, for sale on its website.

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A Free Cuba Over the Horizon?

Today Fidel Castro announced his resignation as President of Cuba. This is certainly good news. But, with the appointment of his younger brother Raul as President, the future of Cuba still remains very much uncertain.

Nevertheless, Key Westers are debating the impacts of a future non-embargoed Cuba to Key West.

Key West is the closest point in the United States to the island of Cuba - only 90 miles across the Straits of Florida. That point is marked in Key West with the Southernmost Marker (pictured above).

Will Key West gain visitors interested in ferry boat travel to Cuba? Will Key West lose visitors who bypass our island to visit a new, and admittedly fascinating, destination? Will there be a wave of migrants - as seen during the Mariel Boat Lift? Will cruise ships skip Key West on their Carribbean itineraries? Will this open up a whole new world of Key West Cuba relations - something our islands have historically shared? Will real estate in Key West benefit or lose?

There are a large number of questions that, in time, will be answered.

Until then, let us today savor that Cuba is likely one step closer to freedom and prosperity. And we, as United States citizens, may soon gain back our right to free travel. Cuba Libre!

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Paradise Has Its Worries

We all know the pleasures of living in the Florida Keys: great climate, fishing, history, lifestyle, acceptance, and inspiration.

But there is plenty to be concerned about with Key West and the Florida Keys lately, including:

• Big budget shortfalls at the state and local level that will likely mean significant cutbacks to services.


• Cruise ships could abandon Key West should Federal rules currently under review change as some have suggested. Cruise ships account for 12% of Key West's budget. Many local businesses are dependent on cruise ships for survival. If cruise ships abandon Key West, the city would be in dire financial straits. (Changing the cruise ship rules may actually be a good thing for Key West and the US, but that is a subject for a future post)


• The Monroe County Commission is a bad joke - with three commissioners apparrently so devoted to developers that they appalingly let them write recent development agreements. Shame on you Dixie Spehar, Mario Di Genarro, and Mayor Charles McCoy. Their combined fiscal mismanagement is nothing short of sheer lunacy. Voters are very aware of the fiasco and should vote the two who are up for re-election out of office. And also worrisome - Key West's mayor, Morgan McPhearson (McFearsome?) is "best friends" with Digenarro, who's behavior on the County Commission more often resembles a thug than an elected representive.


• Florida, for the most part, doesn't recognize evolution in its public schools. Egad. Do I really live in Florida? That's why I think Key West isn't in Florida - it really is different here. Applause to Monroe County for taking the lead - but it is embarassing that 80% of schools in Florida don't include evolution as part of the science curriculum.


• The real estate market is overbuilt, overpriced, and collapsing. Affordable housing is nearly non-existant, and employees are moving away in droves. The community, for the most part, is dwindling.

But the biggest worry of all is rarely mentioned - global warming and its effect on the low-lying Florida Keys which could be profound. Key West's highest point is 16 feet above sea level. The rest of the Florida Keys rise only a few feet above the water.

According to a new study released by the University of Buffalo, "...the sea level rise estimated during this century could be twice as high as what they (United Nations Intergovernmental Panel on Climate Change) are currently projecting." The IPCC is currently estimating a 17-23 inch rise in sea levels over the next century. But if Greenland, whose massive ice fields are on land, melts significantly, sea levels could rise 20 feet (this is not currently projected for this century, but the data keeps moving and evolving).

Tuvalu, a tiny island in the South Pacific, spoke at the United Nations this week - appealing for help in the face of rising sea levels due to global warming.
According to the country's deputy prime minister, ""I only need to highlight the fact that our highest point above sea level is only four meters (a little over 13 feet) to emphasize our vulnerability to the impacts of climate change, especially sea level rise"

Today, Tuvalu is feeling the effects of rising sea levels. In a few decades, the islands could disappear.

One must consider if the Florida Keys are in real danger of disappearing under rising sea levels. In the long geologic history of the islands, it wouldn't be the first time.

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Bank of America - Our National Loanshark

Think my recent post about Pier One & Chase Bank's deceptive store-card program (and credit cards in general) was alarming? (all right, maybe I was the only one alarmed)

It's nothing compared to what Bank of America is up to.

Be warned - if you have a Bank of America credit card (they are among the largest credit card issuers), your interest rates may soon double - even if you've been a good borrower.

Business Week reports that Bank of America, apparently desperate for cash, sent letters to cardholders in January informing them that their rates are going to double but failed to give a reason for the increase. Cardholders were given a phone number to call for more information, but reportedly still didn't get an answer as to why their rates were doubling.

This is a troubling story and well worth a read.

Here are a couple particularly shameful cardholders' experiences mentioned in the article:

Michael Jordan, 25, a software developer who lives in Higganum, Conn., says he received a letter from Bank of America in late January advising him that his card rate would rise from 9.99% to 24.99%. The software developer, who earns $80,000 per year, says he was "shocked" because his payments had been on time and his credit score hadn't changed in the last year. In fact, Jordan says, he has only $4,500 in overall outstanding credit-card debt on two cards and that, on the Bank of America card in question, he had paid down his balance to $3,000 from $3,700 last August. "His rate increase seems unjustified based on his credit profile," says David Robertson, publisher of The Nilson Report, a credit-card industry trade publication.

Bank of America is trying to get ahead of Amanda Pennington, 29, of Euless,Texas. She says the bank raised her credit limit three months ago from $5,000 to $8,000 because of her strong payment history. Then she got the letter from the bank in mid-January notifying that her rate would rise from 15.74% to 25.99%. When she called, she says, the bank told her it was raising her rate because her balance was now too high, though it was still under the higher new limit the bank had previously granted.

Nice, Bank of America. You're a real class act. I won't cry when you lose $10 billion on your Countrywide bailout.

Once again I'll say it: Beware of the predatory lender in your wallet.

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Key West Realtor Predicts Prices Will Fall Further

So how bad is the real estate market? For one of the first times, I suggest you listen to a realtor.

According to a local realtor's blog, Gary Thomas writes that much of the real estate market is still overpriced and, like the doomed ship Poseidon, will likely fall further.

One property Thomas mentions was listed in 2005 for $1 million. Today it is listed at $395,000. Amazingly, even at this price, he believes "it isn't even worth that much".

Here is an excerpt from his post dated January 17, 2008:

What you can't see are the daily entries of new listings, price reductions, contingent sales, pending sales, solds, and expirations. But I can. And the number of Price Reductions that are happening is alarming. There are not just a few. There are a lot--everyday. It's like the sellers are finally coming to the realization that we are near the end of the first month of our sales season and that if they have not been getting any positive action on their property that maybe, perhaps, probably their sales price is too high. "Duh!" to quote Homer Simpson.

Yesterday for example one Broker/Owner reduced the price on four separate over-priced properties the Broker/Owner owned and this time included language that each individual may become a "Short Sale" requiring lender approval (shorthand for loan forgiveness) to get the deal accomplished. I specifically recall showing one of these properties in the early summer of 2005 when it was priced just around $1 million. Today it was reduced to $395,000. And it isn't even worth that much. I think the Broker/Owner has finally capitulated.

Yet there are still Realtors listing properties at prices that are out of touch with reality. You will note that I normally recite the price per square foot when I discuss a particular property. That is so the reader can compare other properties to make an evaluation of the real value of the particular property I am discussing. There are a few properties that are so well located and so perfectly done that they may qualify for an astronomical asking price, but the emphasis is on the word "few".

It will be interesting to see how the asking prices shake out during the next three months. The properties that are selling right now are following the traditional Key West sales pattern for years gone by: high end, very low end, and very well located and well priced Old Town homes. The stuff in the middle just languishes. If the market cycle theory holds true more and more sellers will capitulate and that, in turn, will drive more and more prices downward.

My applause to Gary Thomas. Thanks for keeping it real.

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Harbor House Condos Largely Unsold

With a straight face, I've heard it said that the Harbor House condos are selling "very well".

But according to the current MLS, 29 of the 32 Harbor House condominiums remain unsold.

Maybe their problem is the price: pre-construction prices range from $1,950,000 to $3,120,000 .

This equals over $1000 per square foot!

For that price, maybe it comes with a time machine that will get you back to the top of the real estate bubble where you can sell it for a profit.

Currently, condos in Key West are actually selling for much less - most below $500 per square foot, some as low as $250 per square foot. (Granted, these may not have quite the same level of "sumptuous bathrooms" - LOL!).

With the glut of unsold condos that have flooded the Key West market, one has to wonder how long before prices on these pricey condos return to earth?

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Beware of the Predatory Lenders - IN YOUR WALLET

With the constant headlines about predatory mortgage lending, I've wanted to write about what I see as the biggest predatory lender - credit cards.

Now, thanks to Pier One and Chase Bank, I've decided to write something about the abusive credit card industry.

Credit card companies are largely unregulated and, thanks to some states' dismal laws, are able to charge interest rates equivalent to loan sharks - we're talking 25%-40% interest rates. I wouldn't doubt there are higher rates being charged (especially with fees tacked on).

Credit card companies are notorious for giving people more credit than they can afford - meanwhile handing them terms that will bury them in bottomless sea of debt should they become even momentarily late with their payments. In the process, credit card companies are systematically destroying the credit of millions of Americans - most of whom can least afford it. Charging anyone 25%-40% is dooming them to failure and, therefore, is predatory.

How is this possible?

Summed up by the PBS Frontline :

If you've ever looked at the return address on your statement, you may notice your credit card issuer is located in a state such as South Dakota or Delaware. That's because these are the states that have either weak or no "usury laws" meaning there is no cap on the interest rate that is charged. (View this map that shows the states where the top ten credit card issuers are located.) The federal government once had national usury laws that set a cap on the amount of interest that could be charged on a loan. But after the Great Depression, it repealed them and some states put no new usury laws in place. That's why Citibank, the issuer of Mastercard, moved to South Dakota, which has no cap on interest rates. (For more on the South Dakota story and how the credit card industry took off in the 1980s, read The Ascendancy of the Credit Card Industry)

It is time to end this predatory behaviour that is destroying too many lives.

If a borrower is so risky that the bank claims they need 25%-40% interest rates to compensate, then the bank should not be lending money to that borrower. 25%-40% interest rates will surely doom the borrower - and this is the heart of predatory lending.

I call upon our Representatives in the State and Federal government to do something about this. Protect and help consumers. Here are some ideas of what the government should do:

• Encourage competition in the credit card industry. Offer favorable lending terms to banks that agree to interest rate limits.
• End loan sharking. Stop charging the poor rates that will doom them.
• Don't allow credit card companies to make predatory loans. Force lenders to establish that borrowers can pay off reasonable penalty rates, otherwise don't allow them to make those loans.
• Lend money directly to consumer. Why should banks and institutions be the only ones to get fair borrowing terms.
• Increase credit card companies' disclosure obligations. Make it mandatory for a credit card company to let customers know how long it will take to pay off their credit card if they pay the minimum balance.
• End "Universal Default" - the raising of a borrower's interest rates when they default or have too much debt with different lender.

If our government is serious about ending predatory lending, then they should not ignore the credit card industry.

What's Pier One Got to Do With It?

Pier One & Chase bank "congratulated" me by "upgrading" my account to Platinum level and issued me a new Pier One store card. However, after a call to the credit card's Customer Service, I learned that Pier One and Chase were deceptively issuing me a Mastercard. There was no Mastercard logo on the card nor mention of Mastercard anywhere, including in the agreement, nor did I ever apply for a full-blown credit card. This was supposed to be a "store" card. Plus, the new card's agreement obligated me to spend at least $1000 over the next 12 months at Pier One - something I'm not likely to do - thereby violating my "agreement" and harming my credit rating. The Customer Service supervisor said they felt consumers would appreciate the upgrade. I didn't and closed my account.

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Key West Real Estate Prices Will Continue to Fall

Prices for Key West residential real estate will continue to fall in 2008 - part of a downturn that may not recover for many more years to come.

Prices will be further depressed by too much property for sale, continuing overdevelopment, tightening lending standards, and a lack of buyers.

Realtors looking to sell homes are often quoted saying "Its a great time to buy", but the sales statistics reveal a deeply overbuilt and overpriced market.

At the current sales pace, there is an estimated 3.75 years worth of supply (135 sales in the past 6 months versus 1010 residential properties currently for sale in Key West). Keep in mind there are hundreds more properties on the market that are not in the MLS - and a drive around the island clearly shows many more projects underway that will continue to add to the oversupply.

If you are looking to place blame for the falling market, look at the builders/developers who have flooded the market - and continue to do so.

According to the Marathon and Lower Keys Assn. of Realtors spokeswoman, prices fell 20% in Key West while days on the market increased 34% (2007 versus 2006).

With evidence of no real improvement from 2007, expect real estate prices in Key West to fall, on average, another 20%. And those properties still in the pricing stratosphere will have an even greater fall.

Strangely, this happened before in Florida - nearly a century ago. Here is an article about the Florida real estate crash of the 1920s, much of which sounds like it could have been written about Key West's recent housing bubble:

"Starting in 1920, many Americans became enamored by the materialistic and prosperous lifestyle of the time. During this time, the stock market was moving forward at an extremely fast pace. Many investors were becoming quite wealthy.
Florida became a hot spot for these newly rich people, who didn’t enjoy the cold. Many whole families took vacations to Florida. It was at this point that tourism started booming and land prices were skyrocketing. Many astute investors took notice and started buying Florida real estate. The population in Florida was growing exponentially and housing couldn’t meet the demand. Florida became the “playground of the rich and famous”. Illegal casinos and drinking parlors became widespread in Miami.
At this point, almost anybody could invest in Florida, even without much money. Credit was plentiful and soon everybody in Florida was either a real estate investor or a real estate agent. In 1922, the Miami Herald became the heaviest newspaper in the world as a result of its humongous real estate advertisements. People in the North heard about the real estate prices “doubling and tripling”, causing a snowball effect. Capital was rapidly pumped into the real estate market. Whole golf communities were developed, such as Temple Terrace. Resorts and retirement communities were developed almost overnight. Mansions were sprawling in every area, as were swimming pools. As always, waterfront property was the most desirable. Florida was seen as a veritable Utopia.
Real estate prices quadrupled in less than one year. An elderly man invested $1,700 in property and by 1925 the property was worth over $300,000! It seemed you could do no wrong by just buying any property in Florida and become a millionaire. By 1925, real estate prices had become so exorbitant that buying land wasn’t affordable any longer. New investors failed to arrive and old investors started to sell. Panic arrived, as it always does, and the real estate market crashed. Prices kept moving downwards as heavily indebted investors tried to sell to avoid bankruptcy. In most cases, no buyers arrived, and the investors were bankrupt from the enormous mortgages.
To make matters even worse, a highly destructive hurricane ravaged South Florida in September 1926. The 125 mile an hour winds eventually turned Palm Beach County into swamp lands. After the storm, a huge tidal wave crashed upon the towns of Belle Glade and Moore Haven. Due to these horrible turn of events, over 13,000 homes were destroyed and 415 people died. Additionally, the arrival of the Mediterranean fruit fly obliterated the large citrus industry. It took years for Florida to fully recover, even through the highly prosperous time from 1925 to 1929. Florida was barely affected in the stock market crash of 1929 and the Great Depression, because of its poor financial state from the start.
Market crashes always occur in the same manner. Regardless of the market, the same simple psychological underpinnings are always at work. People who are caught up in a bubble never look back for historical examples. For this folly, they become paupers.
“Those who cannot remember the past are condemned to repeat it.”"

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FUNNY: The Ever-Changing Michael Jackson

Michael Jackson's too-numerous plastic surgeries have left him unrecognizable. But when I saw this video on YouTube, I thought I forgot what the "King of Pop" actually looked like.

Will the real Michael Jackson please stand up! This video was produced in Bolleywood, the India film and movie capital. LOL

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