Key West Bargains Abound After Home Prices Drop

Key West may conjure up images of many things, but affordable housing isn't one of them. Now, for the first time in decades, middle-class homebuyers can consider living in the community that erstwhile resident Ernest Hemingway once called "the best place I've ever been anytime, anywhere."

Five years ago, the island was the most expensive community in Florida, with a 2,200-square-foot home selling for $949,000. That has been slowly changing as home prices have dropped 35 to 60 percent since the peak of the housing boom. In those days, even the most dilapidated houses could fetch $700,000. Now come reports that those very same residences are being snapped up for as little as $300,000 to $400,000.

The cheaper prices -- combined with low interest rates -- are heating up the market, and giving teachers, bank tellers and naval officers a once-in-a-lifetime shot at living the Key West dream.

Ed Salazar, a longtime Realtor in the area, says that he's seeing a lot of first-time buyers (including his own daughter) purchase homes they could not have afforded several years ago. Salazar tells HousingWatch that homes priced at $300,000 or lower are going to contract within days and igniting local bidding wars.

With the real estate market staging a comeback, prices will inevitably begin to climb again.

No one is expecting the inflated prices of the boom years. ("We might not see that for decades," Salazar says.) But home sales have already doubled since last year, according to local Realtors. And the charming luxury homes in the Key West historic district have retained much of their multimillion-dollar value.

Even purchasing fixer-uppers for as low as $300,000 can still be a burden for many buyers, who won't be able to afford the thousands more they'll need to spend for new roofs, kitchen appliances and carpeting.

But for buyers looking for a rare slice of one of America's most exotic and alluring locales, now might be the time to invest and lose yourself in Key West.

Find homes for sale in Key West, Fla. and elsewhere at AOL Real Estate.

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