Today we are going to look at what I believe is an honest mistake made by a Real Estate company which obviously hasn't kept close tabs on one of its entries to my favorite MLS in the Florida Keys. This Real Estate company in question simply keeps tabs on properties for sale down in the Keys and adds very good slideshows and a decent, quick-searchable data base set up by price, different Florida Keys, different types of homes (condos, duplexes, etc.) and so on. As this Real Estate company does officially represent the sellers of but just a few of the properties on this searchable MLS, my guess is they sell "shoppers" on using them to mediate a sale.
This particular MLS is the one with photos of most every home and business listed and can be found at www.keywestmls.com.
This particular MLS, sponsored and edited by Key West's Seaport Real Estate, is the most popular MLS which my Key West friends use. Other MLS searchable databases put together by other Real Estate company go nowhere near the lengths which Seaport provides information.
Most especially welcome on this great website is the tab for "Just Reduced" homes which, like it's title, shows all homes and their new reduced "listing" prices over the past 7 days. (And please, please, please . . . if you are new to looking for a Key West home . . . notice nowhere on the website of www.keywestmls.com is there a tab for "Just Increased" home prices. That should tell any novice that prices are still cratering in the Keys.)
Nevertheless, Seaport Realty's webmaster makes a mistake once in a while and leaves up two MLS numbered entries for the same home. Today, I discovered one I want to share. And please keep in mind this is not to condemn Seaport Realtors for their mistake, but it is to applaud the fact that their mistake is another in a long line of proof which I have supplied over the years that Realtors are trying everything to put lipstick on the Housing Crash Pig.
Onward.
In many a past blog post I have told you why I recommend you keep your own Excel spreadsheet on falling home prices if you are seriously considering buying in the Keys within the next 6 months. Among my reasons, I told you how Realtors play this game of ripping homes off a market after an "original" price had multiple price drops and then coming back on the market a few days or weeks later with a new MLS number and new "original" price.
The reason for doing this is obvious:
1) The new "original" price is a much lower price than the old "original" price and subsequent price drops. Hence, with a newer starting price, one cannot fathom the "panic" in the seller's position, giving a potential buyer less leverage in making a deal.
2) When a new "original" price is listed, it also means the DOM (Days On Market) start afresh. Meaning a listing with only 7 days on market and an "original" price looks more enticing to sellers than one which has been on the market for 300 days and has had 5 price reductions would look to buyers. Sellers and Realtors want to "keep up appearances". Buyers are looking for desperation from sellers, i.e., deals.
3) And when a new, lower "orginal" price is lowered or reduced to a new listing price, should that price sell, the Real Estate cartel will trumpet it was only 20% off the original price and prices are firming, when in reality, the "Just Sold" price could be as much as 50-70% off the first "orginal" price. All of the above might sound confusing to a new reader, so let me show how one house in Cudjoe Key has been marketed, accidentally, with two MLS numbers - one of which shows the real drop in value on the property.
Let's start with the more benign listing, the one with the least amount of depreciation in pricing.
Here's the mansion in question:
| MLS#: | 550147 |
|---|---|
| Original Price: | $3,795,000 |
| Listing Price: | $3,100,000 |
| Address: | 23069 Redfish Lane |
| City: | Cudjoe Key |
| Subdivision: | Cudjoe Acres |
| Mile Marker: | 23 |
| Prop Type: | Single Family |
| Waterfront: | Yes |
| Days on Market: | 276 |
| Bedrooms: | 5 |
| Bathrooms: | 5.5 |
| Interior Sq Ft. | 4,430 |
| Price Per Sq. Ft. | $699.77 |
| Lot Sq. Ft. | 0 |
| Year Built: | 2007 |
| Taxes: | $25,000.00 |
| Tax Year: | 2008 |
| Exemptions: | Homestead |
Here's the description of the property by the Realtor:
Private Gated Keys Estate With Open Water Views. Chestnut & Marble Floors, Gourmet Kitchen, Elevator, Private Boat Basin, Ramp & 2 Lifts. Lounge By By Your Pool Or Beach. 5 Bds/ 5.1 Baths + A Library & Loft. Main House Features 3bd/3.5 Baths & Thguest House Offers 2 Bd/2 Ba. True Paradise Living To The Most Discriminating Buyer Who Wants Everything...With A Sense Of Being Away From It All.
Notice the following three data points above: Original price, Listing price and DOM (Days On Market)
1. Original Price: $3,795,000
2. Listing Price: $3,100,000
3. Days On Market: 276
(By the way, to see the 9 slide photo shoot of this listing click here)
Now as I never kept track of Florida Keys mansions by entering their info on a spreadsheet, it is very possible this mansion had more than one "Reduction In Price" in the past 276 days.
Regardless, let's pretend for a moment that some well heeled buyer simply comes along today, plops down the new listing price of $3,100,000.
Well, the way the Good Deeds in the Sunday paper would report this sale is "100% of asking price". And, invariably, some of the Realtors in our town would crow that this 100% bid on the listing price is "proof that the Real Estate market is bottoming in the Keys."
In reality, the sale at $3,100,000 would represent a drop of 18-19% from the owner's "Original Price" some 276 days ago at $3,795,000. But the Good Deeds in the Sunday Key West Citizen long ago quit showing both "Original Price" and "Listing Price". So, buyers looking at the Good Deeds now are thinking, "Prices don't seem to be falling as much. That's good."
Time For Another Strong Dose Of Reality In Keys Real Estate
But what if the mansion discussed above had been on the market for a longer period of time at a much higher price? Don't you think a savvy buyer would like to know this information so he/she could drive a better bargain with maybe a panicked seller?
Well, in a case of laxity (that's my guess), the keywestmls.com webmaster did not notice the same mansion appears twice, with a different front photo shot, and a different MLS number on their www.keywestmls.com website.
Here's the first entry for the same mansion we are looking at above with new cover photo. (Also if you want to see the original 19 photo slide show, click here) :
| MLS#: | 107685 |
|---|---|
| Original Price: | $4,499,000 |
| Listing Price: | $3,100,000 |
| Address: | 23069 Redfish Ln |
| City: | Cudjoe Key |
| Subdivision: | Cudjoe Ocean Shores Sec 2,2b,3 |
| Mile Marker: | 23 |
| Prop Type: | Single Family |
| Waterfront: | Yes |
| Days on Market: | 813 |
| Bedrooms: | 5 |
| Bathrooms: | 5.5 |
| Interior Sq Ft. | 4,443 |
| Price Per Sq. Ft. | $697.73 |
| Lot Sq. Ft. | 32,242 |
| Year Built: | |
| Taxes: | $20,589.00 |
| Tax Year: | 2009 |
Notice the following:
This earlier listing of the exact same property with different MLS number has been on the market for 813 days! That means this mansion has been on the market since early 2008 and is really in its third year of being marketed.
Secondly, notice the "Original Price" of $4,499,000! That is $704,000 more than what the newest listing (MLS #550147 with 276 Days On The Market) is showing as an "Original Price" of $3,795,000.
Same property, two different MLS numbers showing, two different DOMs showing, and two different, very different "Original Prices" showing. (Meaning the webmaster's slip is showing how Realtors really play the game to "juice" Potemkin pricing which many times is a facade for what has really gone on behind the scenes.)
If some rich buyer comes to the Keys today, without thinking about hurricanes and oil spills, rising sea levels, a county government in deficit, declining county services, bad schools, etc., and pays $3,100,000 (the new listing price), said buyer would actually be getting 31-32% discount from the real "Original Price". Not only is that the real discount so far, but, the Key West Citizen would be showing the sale as 100% of the Listing Price in the Sunday paper's Good Deeds. (It should be noticed that "Good Deeds" are sponsored by some Title Company here in the Keys, and it is they who obviously decided to discontinue showing "Original Price" of homes sold.)
These are the games going on all the time with the MLS as played by Realtors. They put homes on the MLS. They rip them off. They assign new MLS numbers and put properties which have been for sale for years back on the market after a few days breather to hide market inefficiencies and buyers who were in denial for a loooooong time and who are now determined to get out of their money holes.
This is why serious buyers must pay attention and do their own diligence: Realtors are not going to give you the whole story and you will not have the macro-Economic wide angle view you need to know whether you are getting a deal, whether Real Estate is really bottoming (don't worry, buyers, it is not) and whether you should rush in now to get a "deal" compared to 2006 prices (don't, rates have only one way to go . . . higher . . . and as rates go higher, even fewer people will afford "more" home meaning home prices will have to drop even further).
That said, anyone buying a home in the Florida Keys or Florida before the BP Oil Deluge is finally stopped is not paying attention to the current Double Dip Recession which may turn into a Depression forcing even more pressure downward on Keys home pricing.
Stay aware of Macro-Economic trends. Stay aware of local trends. And whatever you do, don't listen to the FIRE Economy cheerleaders who are telling you "There's never been a better time to buy a home!" They've been saying this for the last ten years. Keep in mind these are the vested interests who do not have your best interests at heart.
As always,
Caveat emptor!
Rock Trueblood
