I have been up North a couple of months for personal reasons and get a call today.  The house I rent on “The Rock” is for sale and I have to move by October 31st (happy Halloween).  So what’s available?  What’s the real estate market look like in Key West?  Is it time to buy Key West real estate, rather than rent again?  Location, location, location… and supply & demand!

An interesting parodox… rents have gone up (along with taxes & insurance) and home sales prices have gone down.  But mortgage interest rates have gone up, as well as some down payment requirements.  A lot more houses & condos are for sale and on the market longer, which has made it a buyers market (some real estate agents dispute this!).  The asking prices have dropped and more often than not, a bid lower than the asking price will get you a contract.

Some real estate agents I have talked to try real hard to paint a rosey picture. “This property will not last long.  You should make an offer today!”, is the common selling tactic.  Then I do some digging and find out the house has been on the market for eight months and the price has been reduced three times.  Is now the time to take the plunge and make an offer?

Getting a mortgage loan is not exactly easy today, at least not as easy as a couple of years ago.  The sub-prime rate loan industry has given the entire mortgage market a black-eye.  These lenders, who provide loans above prime to cover high risk, have been prevalent in the Key West real estate market as speculators purchased properties with the intent to flip them quickly and make a handsome profit.  As the market hit a plateau and started sliding, the speculators were unable to resell the properties at a profit and some are defaulting on their loans. This is actually happening around the country, not just in Key West.

Prime rate lenders, who provide better rates for a good credit history and financial fitness, have tightened their lending requirements.  Even though mortgage interest rates have increased, they are still attractive for those that want to invest in a home, rather than a speculative deal.  But the assessed home value is suspect and higher down payments and expensive mortgage insurance are often required.

Unfortunately I am time constrained.  I have to move in two months.  I believe the Key West real estate market may be “about” at its bottom, but can I get a mortgage, get through a closing and move in before November 1st.  I’m told its done all the time, but I have also heard the horror stories of deals falling through at the last minute leaving buyers virtually homeless, or at least scrambbling for a place to rent.  Just have to explore a bit more, and quickly!