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.