When looking for homes in the Florida Keys, you need to be aware of non-conforming downstairs enclosures.  This is essentially having living space below flood.

In this post, I will discuss flood zones and downstairs enclosures and how it will affect your flood insurance.

Let me take a moment to talk about flood zones and the importance of this when searching for Florida Keys real estate.  There are 3 types of flood zones in Monroe County – X, AE and VE.

1.  X flood is the best flood zone.  An X flood zone allows ground level buildings.  When standing on the ground, you are standing above sea level.  Typically with X flood zones, banks will not require you have flood insurance.  But if you do decide to get flood insurance, the cost if very little (approximately a few hundred dollars a year).

2.  AE flood zone.  This is the most common.  AE is followed by a number; ie) AE6, AE7, and so on.  The number will tell you how high above sea level you will need to build.  To determine how high you are above sea level, you will need an Elevation Certificate – which you will get from a surveyor.  For example, at my house when I stand on the ground I am 4′ above sea level.  I am in an AE8 – which means my first floor needs to be built 4′ up from the ground.  Most people will opt to build higher to take advantage of the covered parking underneath the house.   If you are looking at Florida Keys waterfront homes, you will be either in an AE or VE flood zone.

3.  VE flood zone.  The Florida Keys waterfront homes that are direct ocean front or bay front are more than likely in this flood zone.  VE will also be followed by a number just like AE flood zone.  The flood insurance costs on these properties will be the highest.

As mentioned above, homes in the Florida Keys would be built higher than required to take advantage of the underneath parking.  Here is where they would also build storage rooms.  Being the storage rooms were below flood, they were strictly suppose to be storage rooms but often homeowner’s would convert them into living space.  Putting in bathrooms, kitchen, etc – all without permits.  Prior to 2000, there were no regulations on how large the storage rooms could be.  It wasn’t until the beginning of 2000 that Monroe County put a cap on how large a storage room could be – it is 299 square feet – to help eliminate these areas from being turned into living space.

Also note that:

1.  In the 80′s Monroe County did issue permits for bathrooms to be installed on the ground level
2.  Houses issued a building permit in 1974 or before, downstairs enclosures could be grandfathered in.  Keep in mind, grandfathered in properties go by when the permit were issued not when the Certificate of Occupancy was received.
3.  Today- if you have a swimming pool – there is a potential you could get a permit to build a bathroom below flood for the pool.

Your due diligence period is the time to investigate the validity of any Florida Keys homes with downstairs enclosures being used for living space.   The importance of this is for insurance purposes and future permits.

If you have a mortgage, you will be required to have insurances.  And the insurance companies WILL come out and inspect the downstairs to make sure it is not living space.  If they find that it is being used for living space, they will require you to bring it into conformity or they will cancel your flood insurance.  If the bank has to force place insurance on you, it will  be expensive.

The affects of having a non-conforming downstairs enclosure and obtaining future permits will be discussed in another blog.

At this point, if you pay cash and do not get flood insurance you can keep the non-conforming living space below flood.  But when you try and sell your home in the Florida Keys, it could be an issue for you.

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The Florida Keys are 106 miles long  – if you know which area you would like to purchase a Florida Keys home you can narrow your search.  There is the Upper Keys – which is Key Largo and Islamorada; the Middle Keys – which is Marathon; the Lower Keys and Key West.

At this point in time it appears that 2011 is the turn around year for the Florida Keys real estate market.  Most of the areas in this 106 miles of island chain is seeing an increase in what properties are selling for compared to last year.  Our properties have adjusted downward about 50% from the boom.  The bubble bursting for the Florida Keys happened at the end of 2006 / beginning of 2007.  4.5 years later, we are seeing the light at the end of the tunnel.

In an earlier post, I showed statistics for the first quarter of 2011.  Take a look at that post so you can compare to the stats listed below.

The stats below are for the first 8 months of 2010 vs 2011  – We are seeing a decrease in active listings, an increase in the number of properties selling and an increase in the dollar amount they are selling for.  The chart below is comparing January 2011 to August 2011 to the same time frame as 2010.

Note:  The row labels “county” is for the Lower Keys.

Interested in purchasing homes in the Florida Keys, my website is updated on a daily basis.  Whether you are looking for Florida Keys Waterfront Homes, Luxury homes in the Florida Keys,  Florida Keys Condominiums, Vacant lots or commercial properties – my website will keep you informed.

Another bank is getting on board with pushing homeowner’s in distress to do a short sale instead of being foreclosed on.  Bank of America has just come out with this program which will offer distressed homeowner’s cash to complete a short sale.  The homeowner could receive anywhere from $5,000 to $20,000 incentive.

There are some guidelines to be aware of: 

1.  The homeowner’s needs to apply for this program prior to November 30, 2011.
2.  The homeowner must not have EVER had an offer on this property
3.  The closing must take place before August 31, 2012

Homeowner’s with a Bank of America loan need to act upon this program sooner rather than later.  If the home is your primary residence there is a good possibility that Bank of America will waive the deficiency judgement.  A deficiency judgement in a short sale is the difference from what the house sells for and what is actually owed to the bank.

It has not been 5 years since the recession took its toll on homes in the Florida Keys.  And although, short sales still make up about 10% of the Florida Keys real estate market, programs such as this will help to get these homes off the market sooner rather than having them lingering in limbo.

If you are looking for homes in the Florida Keys, my website is updated on a daily basis with the most current properties for sale.   Whether you are looking for Florida Keys waterfront homes, Luxury homes in the Florida Keys, Florida Keys Condominiums, Vacant lots in the Florida Keys or commercial properties, I can assist you with your purchase.