Reduced in Key West

Following is another update on Key West from a friend on the Motley FOOL posting under the name "FreeThinkerKW". He lives and rents in Key West. Previous updates were Shell Shocked in Key West in November 2006 and A Lit Fuse in Key West in December 2006. Following is the January 2007 update from FreeThinkerKW.

The Keys are a chain of islands connected by over 125 miles of bridges and roads to the mainland of Florida. They are divided into the Upper Keys, Middle Keys, and the Lower Keys of which Key West is the endpoint.

Last week in all the Keys only 13 properties traded hands, two of which were parcels of land.

In the Lower Keys, we are now approaching 1700 homes on the market. Last week, zero homes sold in Key West. That is a record breaking 3 out of 4 weeks no home has sold on our island.

Last weekend, real estate agents tooted their horns for 2006. One office in particular with 13 sales for all of 2006 has 9 sales agents in the photos. Of those 13 sales, 10 were for less than $500,000. I am looking over these sales and I'm wondering, "How the heck do those 9 agents hope to live off 13 sales for an entire company?"

Next, we are seeing "Just Sold" sashes over pictures of houses that a realtor is trumpeting in adds in the paper. A small bit of diligence on my part found that most of these "Just Sold" ads are trumpeting sales from months ago. This is the feeble attempt of Key West realtors to make it seem as though real estate is actually selling down here. Yet the "Good Deeds" printed every Friday are telling the real story. [Mish note: "Good Deeds" is a list of all home sales in the Key West Citizen.]

Last year's number one cliche in Key West was "For Sale", this year's cliche will be "Reduced". You just cannot imagine what is happening now in Key West in an attempt to move these lovely homes.

The panic is settling in.

Last year, home prices dropped in all the Keys. The same thing is happening all over Florida. However, the NAR down here has played footloose and fancy free with its statistics and has done an admirable job pushing the lie that housing prices actually went up in 2006 down in Florida. Oh man, talk about the BIG LIE. We've got brand new condos with signs drapped over the balconies saying, "Never Lived In, Resale Lower than Original Sale Price."

When a 22 home auction garners no minimum bids, and when those 22 homes were already being offered at lower than appraised value, then you know the NAR is full of caca.

No longer do you list a house in the morning for $500,000 and by sunset see it sold to the highest bidder for $550,000. Those days died 18 months ago.

Despite the new reality, the local NAR is coming up with ways to finagle statistics and trumpet the fact that median sale price hasn't dropped. When you talk this kind of craziness to a local, we all laugh at the absurdity of the lies being told to lure naive Northerners to buy. The interesting thing is now even some of the Northerners are not being buffaloed. They fly into our airport, they rent bicycles, they ride our city streets, and like a flip book cartoon they see, "Just reduced, just reduced, just reduced."

If anybody tells you Florida Real Estate did not go down in price last year, just smile, and walk away from that person. They are delusional to the max. They don't live here, or they are on drugs, or they are part of the Real Estate cartel.

What is happening statewide is a rout in real estate. Prices are falling like chum through the ocean with the Realtor fishermen hoping to land a big one before darkness sets in. Yet somehow, David Lereah is keeping a straight face and finding one shaky statistic after another to show real estate is not going down in price in Florida. I just don't understand how someone can lie for a living.

Thanks FreeThinker. Keep those updates coming.

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/