One would think they are and they certainly can be, but you are making a mistake if you are only looking at short sales and foreclosures in the Keys! Firstly: In comparison to other areas we have very few foreclosures! Most of the few owners who are in distress are owners who bought at the top of the market with 'creative' financing (E.G. interest only loans or variable rates).
Just in case you do not know what a 'short sale' is: A short sale is a sale in which the lender has agreed to take less than what is owed on a property and the borrower can prove that the market value now is less than what is owed and that the borrower will probably default on his mortgage payments if the property is not sold shortly. Here is the 'problem' with a short sale: If a property was bought for 1 Million Dollars two years ago and was bought with 10% down with an interest only loan; there is still 900K owed to the lender. A property that was bought at the very top of the market for 1 Million might now sell for 700K. The bank might agree to a short sale at 800K (that's still a 100K loss to the lender) but it's not really a good deal to a buyer if the buyer can buy a similar property for 700K from somebody who purchased the property five years ago for 500K and is not in distress but simply wants to sell his property.
You must keep in mind that the Keys are a very unique area and Real Estate is governed by location.
Real Estate was doing great everywhere four/five years ago but appreciation in property value was one of the greatest in the Keys! You were able to buy a condo for 300K and the value doubled within a year IF you sold the property the following year. Many owners felt that the appreciated value was money in their pocket and did not realize that it is only money in their pocket if it is actually there and sold the property for the profit.
Once the market started to slow down sellers were not willing to take less than what their property was worth at the height of the market because in their mind the value of the property was what they had anticipated being able to sell it for.
Of course that is not true: The value of everything is how much somebody is willing to pay for it!
I cannot tell you how many good offers I wrote on properties in the past couple of years; offers sellers should have taken but wouldn't because they felt entitled to making 300K within three years of ownership and that's
ok because it is their property and they get to decide for how much they will sell. Nevertheless a lot of these sellers are now realizing that the market is not what it was and if they really want to sell they will have to lower their price.
There are quite a few sellers who want to trade up and are looking to buy something larger in this buyers market but in order to do that they need to sell their other property first. These sellers might take considerably less for their property so they can have a down payment for another property that they in return can get for a good price now.
You will not find one person in the Keys who does not believe that Real Estate will be booming again just like it did not too long ago.
As in every investment you need to play your cards right and it is much wiser to ask a seasoned Realtor what is a great deal right now then to just be interested in Foreclosures and Short Sales. You might be able to get one hell of a deal from a seller who purchased his property ten years ago for little money (little being relative) and is now ready to move on and just wants to sell. Find a Realtor whom you can trust and take advantage of their expertize! A saved commission can cost you a lot of money if you
over payed for the property just because it was a short sale and you thought that all short sales are great deals!
Let me clarify that there are short sales that are a great deals but don't limit your search to just those properties!
