BY BILL CITARA
Reporter Writer
The Reporter, Florida Keys Keynoter
July, 2003

The only thing hotter than July in the Keys is the local real estate market, which – despite war, economic and stock market woes – shows no signs of slowing down.

That’s the consensus of real estate agents from Key Largo to Key West, who say that while some segments of the market may not be moving quite as quickly as in previous months, its overall health is so robust as to be the envy of almost anywhere else in the country.

“It’s great,” said Islamorada Realtor Brooks Clark, who's been representing buyers and sellers in the Keys since 1986. “It’s the best year ever.”

To Clark, whose company handles mostly high-end properties and recently opened a satellite office in Ocean Reef, Keys real estate is still a bargain.

“Prices (here) are so reasonable compared to other waterfront properties,” she said. Even dry-lot homes in the Keys have at least doubled in value over the past five years, she said. In the upper Keys, buyers are “snapping up whatever they can afford,” said Realtor John Hayes of Raymond Warner Real Estate in Key Largo. “They’re afraid they won’t be able to live here” if they don’t buy now.

Buyers are evenly split between residents and investors, he said, with primarily the former generating a “huge percentage of cash transactions.”

While canalfront homes still command the most interest and highest prices, their relative shortage has forced would-be buyers to move further down the real estate food chain.

Hayes said many are purchasing mobile homes, tearing them down and rebuilding – modular construction on dry lots, conventional on wet lots.

He cited the case of one “run-down” mobile home with bay views in Key Largo that received six offers – some over its $70,000 asking price – the first day it was put on the market.

No matter what the price, inventory in Marathon is “very, very low in every price range,” according to P. Morgan Hill of Exit Realty in Marathon.

Multiple and back-up offers – offers above asking price – even bidding wars are common up to about the $900,000 range, she said.

Is it a bubble that’s about to burst? “I don’t think so,” Hill said. “It’s the value of waterfront property coming of age.”

Not that dry lot property should feel left out. After all, she noted, “On a half-mile-wide island, how fare are you from the water?”

In Key West, Realtor Marilyn Wild “looks at the market and wonders where it’s going to end,” give that the average price of a two-bedroom house in the Southernmost City is $466,000.

But she said those kind of prices haven’t deterred buyers, whose attitude is “I might as well get this over; it’s not going to get any better."

Because prices are already so high, homes on the upper end of the market are only increasing in value from 5 to 10 percent a year, Wild said.

Lower-end properties and condominiums, on the other hand, are averaging 20 percent annual increase.

Many recent purchases are of homes or condos whose owners are cashing out and moving to less expensive areas, she said.

Unlike some other parts of the Keys, however, the vast majority of purchases are by people who intend to be either full-time or part-time residents, as anticipated city restrictions on vacation rental have discourage potential landlords.

No matter what or where they buy, it’s pretty much assured they’ll be paying more for less, while those smart or lucky enough to already own their homes are sitting pretty.

“Every single person who owns a piece of property down here has a very bright future,” Clark said.