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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Florida Housing Bad - Predicted to Get Worse

According to a widely watched index, Florida leads the nation in falling home prices. And if forecasts are correct, 2008 will be even worse.

The S&P/Case Shiller Home-Price Index released yesterday showed Florida home prices have declined 12.4% over the past 12 months - worse than any other state in the country. Meanwhile, the Housing Predictor website yesterday released its forecast for Florida, predicting that in Miami "as Housing Predictor forecast last year, the market is falling and has become the epicenter of America’s housing crisis. Values have fallen by as much as 40% already and more deflation is in store for the market."

Here is a chart of their Florida housing predictions for 2008:


So things look bleak for the Florida housing market overall. Unfortunately, the data does not show the Florida Keys.

If you want to get an idea of what your house is worth in Key West, take a look at comparables - sales that have recently occurred in your neighborhood.

Here are the sales over the last 4 weeks in Key West:

• 1116 Whitehead St - Single Family - Old Town - Price Per Sq Ft. $302.30
• 1501 Olivia St - Single Family - Old Town - Price Per Sq Ft. $411.52
• 1116 Elgin Ln - Single Family - Old Town - Price Per Sq Ft. $629.95
• 1402 Olivia St 1 - Condo/Townhouse - Old Town - Price Per Sq Ft. $325.00
• 3708 Duck Ave - Single Family - New Town - Price Per Sq Ft. $275.16
• 1326 10th St - Single Family - New Town - Price Per Sq Ft. $351.44
• 2401 Harris Ave - Single Family - New Town - Price Per Sq Ft. $321.77
• 800 Georgia St - Single Family - Meadows - Price Per Sq Ft. $445.28
• 3930 Roosevelt Blvd W311 - Condo/Townhouse - New Town - Price Per Sq Ft. $390.82
• 1437 12th St - Condo/Townhouse - New Town - Price Per Sq Ft. $227.22
• 1328 Seminary St A - Condo/Townhouse - New Town - Price Per Sq Ft. $358.02
• 2601 Roosevelt Blvd 207C - Condo Townhouse - New Town - Price Per Sq Ft. $290.82
• 1445 Roosevelt Blvd 411 - Condo/Townhouse (with Transient License) - New Town - Price Per Sq Ft. $593.09

Multiply your home's square footage with a comparable sale's "price per sq. ft." and you'll get some sense of its current value.

And if you are looking at buying, hopefully you'll get a sense of where fair value is.

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Is Upscale Tourism the Next Bubble to Burst?

Upscale Tourism. Seems everyone is debating it these days.

But Key Westers should be asking themselves if it is for real - or is it another speculative bubble, ready to burst?

To answer this question, take look at where this Upscale Tourism Bubble came from.

The Upscale Tourism Bubble was built atop the Real Estate Bubble. As Key West real estate turned to mania, it propped up the idea that everything in Key West is now upscale.

During the Key West real estate bubble, speculation ran wild. It appeared that everyone was flipping properties. Money was easy to get as lenders, realtors, and mortgage brokers handed loans to everyone. House prices jumped from $150,000 to $300,000 to $600,000 to $1,200,000 - all in the span of 8 years.

And it was precisely at this time that the notion of Key West tourism going upscale was born. Speculators thought to themselves, "Heck, if people would pay $1 million for a Conch shack, why not make them pay $300-$500 for a Key West hotel room?"

Developers and speculators, drunk on real-estate-bubble-profit dreams, thought everything was going upscale - and bought up hotels, motels, and other property - thinking they'll get a huge return on their investment.

No doubt, hotel room rates in Key West have increased significantly over the past few years. But this is mainly due to a decrease in the supply of hotel rooms. At least 800 rooms have been offline over the past two years - and the room rates show it.

But can Key West become "upscale tourism" while the housing bubble bursts?

The answer is likely to be no - since one bubble was built atop the other.

As the real estate bubble bursts, the Upscale Tourism Bubble will burst as well.

Fortunately, since empty hotel rooms are like empty "for-sale" houses, room rates will fall - especially from the lofty levels many developers have been throwing around.

So, get ready for the next crash. As the hotel rooms come back online, rates will fall. This may not happen immediately - since the Spottswoods are planning to tear down 500+ hotel rooms in their effort to create a major Upscale hotel/timeshare/condotel/whatever out of 5 of the last affordable hotels left on the island.

Unfortunately, the Mayor of Key West appears to be painting the community into a corner - betting the ranch on upscaling and ignoring the bulk of our visitors - a base which took decades to build.

He's hanging onto a sinking ship - called the SS Real Estate Bubble, and has tied the tourism industry, along with the livelihood of everyone in Key West, to it.

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Is the Mayor Listening?

Few stories have raised such suspicion and anger than Key West Mayor Morgan McPherson's surprise move to oust the head of the Tourist Development Council, Harold Wheeler.

Wheeler is nearly unanimously appreciated for the work he has done during his 12 years at the helm of the Florida Keys marketing arm. As a matter of fact, he recently received a glowing review and a pay raise in recognition of all the good he has done for the Florida Keys.

Every Chamber of Commerce and tourist organization in the Florida Keys has spoken out strongly in favor of Wheeler. At yesterday's meeting to decide the fate of Wheeler, over 120 community members and business leaders showed up and supported him. Fortunately, for now, Wheeler kept his job. But is in no ways safe. Mayor McPherson still seems intent on getting rid of the well-liked TDC head.

So why is the Mayor of Key West looking to fire him?

The answer is likely in the tug-of-war between real estate developers and speculators who want to "upscale" Key West and the tourism industry which is the main economic engine of the county.

McPherson has a background in real estate and seems to be firmly in the upscale developer camp. McPherson wants to spend less of the Tourist Development Council money on advertising and more on infrastructure. The mayor has been vague about what direction he would like to see the TDC head - and that is partly why the whole situation is so perplexing.

The developers have laid huge bets - building hundreds of million dollar condos , McMansions, condotels, and dockominiums that are having a difficult time selling since real estate values in the Keys are deteriorating. Developers have purchased many Key West hotels - converting them to either expensive condos or expensive hotel rooms. No doubt these developers are sweating.

In short, the real estate bubble nearly consumed much of the tourist industry in the Florida Keys. It has made housing unaffordable for workers necessary to the tourist industry, and diminished room supply resulting in greatly increased room rates - pricing out much of the Keys traditional visitor. If not for the bubble bursting, who knows how many more hotel rooms would be taken off the market (by the way, this year over 500 hotel rooms will go "off line" as the Spottswood developers plan to rebuild 5 hotels into an upscale condo/timeshare/hotel.)

This week's Sunday edition of the local paper had a front page story asking if the Keys will be "Key Fancy or Key Funky".

It looks like the mayor is aiming for one thing: Key Fancy. And now that he has been re-elected by a very slim majority, he is behaving as if public input doesn't much matter. Aside from his move to oust Wheeler, the Mayor also ignored public outcry to help save the funky Waterfront Market and was the sole "no vote" to extend the market's lease.

But a word of caution to the Mayor: Your bet on upscale development at the expense of tourism has a good chance of backfiring. The real estate bubble has burst, the economy is arguably in recession, and the State of Florida is in a fiscal crisis. Don't bet the farm on overpriced real estate while sacrificing the charm of Key West and the main economic engine: tourism. You may find that tourism is built for the long run while real estate bubbles only arrive once in a generation. And it is not just tourism that is at risk. The families of the island will find it more and more difficult to live here, raise families, and succeed if there is not industry for them.

The Florida Keys and Key West are not Nantucket - nor do most people want it to become Nantucket. If the Mayor would like to change the direction of the marketing plan for the Keys, then he should attend the meetings and work with the experts and public.

At the very least, the Mayor needs to listen to the people, respect and represent them.

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Newbie Flippers Sue Real Estate Infomercial Guru [VIDEO]

We've all seen them: get-rich-quick real estate programs hawked on television infomercials promising an easy road to wealth.
Typically, some "real estate guru" loosely explains how they made fortunes, and now offers the program for sale - all the while chanting "No Money Down!" and citing huge payoffs.
One such program, from Russ Whitney and the Whitney Information Networks, is being sued by people who took their "classes" and subsequently buried themselves in the real estate market.
Here is a video detailing one woman's allegations: that she spent $30,000 on classes with Russ Whitney (amazing by itself), and then developed a house allegedly at the suggestion of the Whitney organization and which has little chance of making money.

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Key West Videos

Dreaming of Key West? Maybe your margarita machine broke?
If so, here is a selection of entertaining videos, thanks to YouTube, that are related to Key West and the Florida Keys.

Watch the latest videos on YouTube.com

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No Sunshine For Florida Real Estate

Data released today confirms that Florida's real estate meltdown is worsening.

The number of homes sold in Florida in October dropped 29% compared to the same period last year.

The median sales price in October for existing Florida single-family homes dropped 8% compared to the same period last year

The number of condos sold in Florida in October dropped 20% compared to the same period last year.

The median sales price in October for Florida condos dropped 8% compared to the year ago period.

Nationally, the real estate picture is bleak - despite assurances from realtors. The US inventory of unsold homes continues to increase - making a turnaround unlikely any time soon. In October, total housing inventory in the US rose 1.9% - equal to 10.8 months supply at the current sales pace.

Meanwhile, Key West real estate continues to suffer as the number of unsold properties remains at near record levels. Adding to the worry is the large number of developments underway and, for the most part, unrecorded in the local MLS. Price reductions in the 100s of thousands of dollars are not uncommon. (The November 25, 2007 chart from Zillow, above, illustrates the current state of the Key West market.)

Nearby neighbor Miami has seen home prices has drop 10% over the last 12 months.

But have we seen the worst of it?

Probably not. And here is why:

1. Too much supply. As the basic law of supply and demand states: When supply is greater than demand, prices fall.


2. Homes are still overpriced. In Key West, many properties are still listed at over $1000 per square foot while the few that sell are going for far less (often under $500 per square foot).


3. Banks, mortgage companies, and financial institutions are rapidly bleeding money from bad loans on overinflated properties. If you are looking to purchase with credit: GOOD LUCK. And if you are a subprime borrower (or are an investor/flipper/speculator reliant on "liar loans"), sorry - that market has evaporated.


4. Foreclosures continue to climb. When a bank ends up with a property, it typically sells at a 30% loss. This pressures surrounding properties' prices downward.


5. Appraisers are coming under fire from banks (and municipalities) for allegedly overstating the value of property. Banks have suddenly become very skeptical of appraisers - and this may lead to the next leg down in real estate pricing


6. Developers keep building - further glutting the market with properties

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Here Comes the EXCLUSIVE Neighborhood?

Key West is traditionally regarded as very inclusive - welcoming all walks of life.

Residents mingle - unaware of income strata, occupation, accolades, and sexual preference.

And that is why it is so strange that the new, uber-wealthy McCondos and McMansions currently being built here in Key West are usually marketed as EXCLUSIVE.

The Associated Press released a story this week about this new phenomenon - which was published in USA Today and the Orlando Sentinel.

Meanwhile, Key West is dealing with falling real estate prices, foreclosures, and a glut of properties on the market. Yet the building of EXCLUSIVE developments seems unabated. Developers are like steamships - they take a long time to change direction or stop.

Hundreds of $1 million+ properties are being offered, including King's Pointe, Beachside, Casa Marina Residences, Parrot Bay, Harbor House, Steamplant, and Key West Harbor Yacht Clubs (though they do not appear in the local multiple listing service).

Usually, these properties are offered for a cost in excess of $1000 per square foot. Yes, you read that right. And some are offered as high as $1350 per square foot! And these are CONDOS - not spacious houses with land.

But if recent Key West sale prices are any indication, properties are typically selling for below $600 per square foot.

Meanwhile, our nearest big-city neighbor, Miami, is having a real estate meltdown. Predictions are that prices there may drop 20% over the next 12 months. And Florida will likely have a $2 Billion shortfall next year due to declining property tax receipts.

So one has to wonder, what is the future of these EXCLUSIVE McDevelopments? Will they make it? And what will the character of Key West look like?

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[PICS] Key West Powerboat Races

The Key West World Championship powerboat races are underway this week.

This is the WORLD championship - the Superbowl of offshore racing.

According to tour promoters, Key West is the favorite venue for offshore powerboat races - allowing fans to watch the races from shore, mingle with the drivers and check out the boats in the nearby pits, and enjoy typically calm racing conditions.

Spectators lined the Key West harbor - from Fort Zachary Taylor State Park to Mallory Square.

Below are photos from one heat of the races. (click on them to see larger versions)

Seeing boats enter the tranquil harbor at over 100 mph, followed by a swarm of helicopters, was stunning. Congratulations to the winners and all the participants. We may never get the Superbowl, but Key West is happy to crown a world champion.

Race fans watching the action from Mallory Square

Fountain Marine, always a leader, roaring by.

Powerboats racing by Sunset Key in Key West's harbor.

The start of a race - the big (and LOUD) boats head offshore.

Speeding by the Westin Resort (formerly the Hilton) at over 100 mph.

Power boat race in Key West underway.

Looking like a spaceship, this power boat is nearly as fast.

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Luxury Condo Towers Over Lazy Lane in Key West

Traveling down Lazy Lane yesterday, one couldn't help but notice the large construction development in progress. Known as Harbor House, this 32-unit luxury condominium is under construction and will likely change the character of the Key West Bight.

The developers website offers "special pre-construction pricing starting at $1,866,750". With units "ranging in size from 1,900 to more than 2,300 square feet", that translates to nearly $1000 per square foot.

This development caused quite a bit of anxiety among Old Town residents, who thought the initial plans for over 100 condo units was too dense (and tall) for the area. After a long battle, the 32-unit version became the final plan. And now, the construction is under way.

While riding down Lazy Lane, adjacent to the Schooner Wharf Bar ("The Last Little Piece of Old Key West") and home to little shacks housing cottage industries, one can't help but notice the two-and-a-half-story building practically touching the funky Lane.

Notice the photo attached to this blog post (click the photo to see a larger version).

Aren't there set-back requirements that restrict building so close to the property line - especially for a building that is nearly 35 feet tall?

Or does Harbor House own Lazy Lane?

Or was this a part of the development agreement?

Will there be any landscaping between Lazy Lane and this building?

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