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REAL ESTATE IN KEY WEST Like anywhere in the free world the real estate market in the Florida Keys and Key West is driven by two main factors, the first being location and the second supply and demand. We´ve already talked about location. If you´re already on the island you know why everyone wants a "piece of it" to call their own. So let´s move on... Supply and demand is a little more complicated. The obvious is that we have space limitations. Not a lot of grazing fields or old farming areas for sale in Key West or the Florida Keys. So while in many parts of the country "new housing starts" control market prices our inventory in Key West is stabilized. Limited supply results in high demand. Another factor controlling supply is a phenomenon of government called ROGO or the Rate of Growth Ordinance. Understanding ROGO isn´t easy. What you need to know for now is that it will severely impact your ability to build on vacant property and it will also severely impact the timing of such a venture. The concept comes from the EPA and FEMA who want to control the growth of the Florida Keys and protect the sensitive environment and also the potential need to evacuate the Keys in the event of a major hurricane. We refer you to http://www.monroecounty-fl.gov . Please don´t go to the web site before taking two aspirin and kissing your loved ones goodbye in the event you get lost in the world of words. ROGO limits new building and results in high demand. High demand begets higher prices. High prices begets turnover as homeowners want to cash in on escalating prices. Turnover also begets higher prices. Do you feel like you´re reading the bible? Having discussed supply and demand it should be obvious to you that real estate costs in Key West and the Florida Keys are high. The good news is that property in Key West may well be the best investment you ever make! Over the last ten years property was appreciating at 15 to 20 percent per year. In the last two to three years it has been as much as 30%. While we don´t expect the market to maintain 30% annualized growth we do expect it to continue to appreciate substantially. Interest rates, the stock market and world economy all play a role in how property will continue to appreciate. No discussion of real estate in the Keys is complete without a discussion of the transient license rental rules. In Key West and in Monroe County (Florida Keys) it is not legal to rent property for less than 29 days without that property having a transient license. Not a problem you say? Well it may be since the city has stopped issuing transient licenses. Our take on this issue is that the city will never return to issuing new transient rental licenses. If someone tells you to ignore the city ordinance, we strongly suggest that you ignore that person. The transient license is a quality of life issue. People who live and own here year round and work and raise children don´t necessarily want vacationers and vacation activity going on next door and through the night. In case you´re wondering, this issue is as controversial as any. Homeowners claim a violation of property rights. Citizens claim that transient licenses limit the number of available long terms rentals and keep rents high. This issue will be debated for a long time. If you want to get involved in buying vacation rental property you will need to buy a property with a transient license if you want to rent for 29 days or less. Property with a transient license is marketed about 50/60 thousand dollars above similar property. Several major real estate companies such as Century 21 Keysearch Realty manage the rental of vacation properties. These companies vary in services and fees. Ask me to help you on this subject. Also, when buying property with a transient license you will want me to get a sales history on what that property has earned. It is possible to buy a transient license from a property owner and transfer a transient license from one property to another. As of this writing the rules are currently under scrutiny by the city commission...so ask me...but currently those transfers must be done with the approval of Key West City Planning and they will approve it if the license is being transferred from an unapproved area to an approved area and if the properties are similar. Like transferring a license from a one bedroom home to another one bedroom home. HARC is not a reference to hark the herald angels sing but rather to the Historical Architectural Review Commission. This board reviews all physical changes to the outside of property in Historic Old Town. So...when you buy property and want to improve it or in some way change the exterior of the property, those changes must be submitted to and approved by the historical review commission for consistency with the historical architecture of the area. This applies only to exterior changes and only in historic old town. Commercial Real Estate as well as "commercial business opportunities" are always available in Key West and the lower Keys. I have experience in this area as diverse as a doctor´s office building to a grocery store to an ice cream shop.My experience of owning my own successful business for 16 years is a great resource. |