John Creighton has lived in Key West for 25 years and works two jobs — as a personal trainer and as a server in a restaurant. It wasn't until last year, however, that he was finally able to get something he's long wanted — a three-bedroom, three-bath home in Key West.
The house needed work. It was a foreclosure that had been neglected. Dealing with the bank wasn't easy, but in the end, Creighton says he got a bargain — paying just $300,000.
The last person who bought the house paid more than $700,000.
"I couldn't be any happier," Creighton says. "I stand in this kitchen every day and go, 'Yay, look at my house!' "
In Key West, it's not an unusual story. After years of being priced out of the market, teachers, taxi drivers, bank tellers and members of the military stationed at the Navy base in this island town at the southern tip of Florida are finding houses and condos they can afford.
Karen Lane, a Key West Realtor who worked with Creighton, says, "I think probably a third of the buyers in our market now are people just like John."
Low prices, combined with low interest rates, and a gradually strengthening economy, have begun to heat up the housing market in Key West. Creighton had to compete with other buyers to get the property.
"There [were] multiple offers coming in on the property and it was touch and go there for a while," Lane says.
Homes Sales Doubled
Home sales are double now from what they were last year, and prices are beginning to rise.
Realtor Donna Windle has been tracking the comeback of Key West's real estate market from the driver's seat of her electric car. It’s a rolling advertisement for Southernmost Realty, where she works. It's a great way to navigate the narrow lanes of Key West's old town.
Key Westers call the architecture in their historic district "conch houses," named for the shellfish that is an island specialty. They're wooden homes, often with second-story galleries and gingerbread decorations. Many are brightly colored with well-tended gardens. Others have clearly seen better days.
This is the Key West that visitors know and where the housing demand is greatest. Big historic properties here still are priced in the millions. But it's nothing like it was just five years ago.
A 60 Percent Drop In Prices
"Our market dropped about 60 percent across the board," Windle says. Unfortunately, she says, the drop in prices hasn't made buying a home easy for everyone.
Many of the bargains in Key West are for homes that need work, and that can make financing difficult for a first-time homebuyer.
"When you have the high loan-to-value ratio — in other words, where your borrowing may be 97 percent or 95 percent, the lender knows you don't have 10 grand to replace that roof next year, or whatever it is that comes along," Windle says.
Trouble In Paradise
The lack of affordable housing is a problem in many urban areas. But it's especially acute in so-called paradise communities — resort areas where the demand for housing is high and the supply is constrained by geography.
In those places, homeownership isn't necessarily the answer. Bob Calhoun, with Habitat for Humanity in Key West, takes a reporter to the group's newest project — a former Navy officers quarters now being rehabbed into 11 affordably priced rental apartments.
That's a relatively new idea for the nonprofit — helping people rent, not own — but one that makes sense in a high-demand market like Key West. Calhoun says Habitat's other rentals are full and have long waiting lists.
Describing his tenants, Calhoun says, "We have everything from waitstaff, from people running the tours, running charter boats to law enforcement officers and young professionals."
The housing collapse has enabled Habitat to buy buildings that just a few years ago it couldn't consider. The group is now looking at other properties in Key West that it might be able to convert into affordable rentals.