The question on everyone’s mind is …. Will the Grand Bahama Real Estate Market Ever Recover? The reports from our neighbors across the pond in the U.S. are that the Real Estate Market is back and the market IS recovering. In Miami, Florida only 100 miles away not only have real estate prices recovered, but there is a shortage of condos and developers are building more condos to keep up with the future demand. They are calling it a condo boom. We all know this is not the case in Grand Bahama but as a small country so heavily influenced by the U.S. market, we can not be too far behind. We usually lag behind the U.S. by about 14 months or so and we of course have our own unique problems in Freeport so the recovery may be slower than expected but the trends look positive. No one has a Crystal Ball that can see the future exactly but with the current state of the world economy there are many factors that give us an indication of the Future of Real Estate on Grand Bahama Island.
An important point to keep in mind is that it is very difficult to make broad statements about the state of the Grand Bahama Real Estate because there are many different Real Estate Markets on the Island. There is a big difference between raw land, lower income homes, high end beach front homes, condos and duplexes. No one would ask you how the weather is in the United States because that’s too general. The weather is of course different in Buffalo, New York then in Phoenix, Arizonia. So when looking at real estate we have to identify what sector of the market we are talking about especially when looking at trends.
One of the biggest problems we have on the island in my opinion for the local residential housing market is the lack of jobs and good paying jobs. This lack of jobs has caused the local residential prices to fall. If the job market improves you will see the real estate market in the residential market and all sectors of the market improve. It’s that simple. Jobs create consumer confidence and the ability for buyers to borrow money from the banks for mortgages. Not only can people borrow money but homeowners can pay their current mortgages. We need new projects and new excitement for Freeport like we are seeing in Nassau only 150 miles away. The Sunwing project whereby they will lease 500 rooms at The Grand Lucayan, have direct flights from Canada and hire over 1,000 people is certainly a good start. The announcement of the water theme park west of the Stoned Crab is good news as well. Now we need more airlift direct to Freeport, more projects and the momentum for recovery will improve.
If you look at The Freeport News there are growing pages and pages of Foreclosure Homes being sold by the banks. As long as there is a huge supply of Bank sales it will be difficult for a “normal” seller trying to sell their home so they can move up, move down or change address because buyers can buy bank distressed homes at highly discounted rates if they have cash, a good job and good credit. Real Estate is about movement and without movement you have stagnation which creates a dead market. So in light of all this we don’t need a Crystal Ball to tell us that there is high unemployment, an oversupply of homes, a big supply of bank foreclosures, banks not lending money and a flat real estate market with prices going down because sellers can’t sell due to lack of buyers.
So the future of the residential market in the short term is going to be more of the same for 2013 with a little upswing in certain sectors. Until we can clear the inventory of distressed homes and the job market improves the local real estate market will remain stagnant. This is a general statement for the local residential sector which does not mean that there won’t be buyers and sellers but the market will be very competitive and the majority of sellers will have to continue to be patient. If you are a seller in this sector be patient and do EVERYTHING you can to make your house competitive in this very difficult market. Hire a professional real estate agent and price your home for exactly what it’s worth. The strategy of pricing a home high and letting buyers make a lower offer can backfire. If you are a seller you are in competition with every other house on the market and there are more homes on the market than there are buyers hence it’s a Buyer’s Market.
Is the Real Estate market dead? The answer is no. The real estate market is slow in the local residential sector, however there are other sectors of the market which are showing some signs of growth. Income producing properties, some vacation rental properties, high end water front properties and commercial property are showing signs of recovery even in these difficult times. If you are an investor with access to cash or bank financing there are really good deals in this sector of the market. In all sectors of the market, sellers have had to lower prices with buyers locally and from abroad coming to our “depressed economy” looking for a deal. The good news for buyers is that sellers are getting real and willing to take a real look at offers. The offers are few and far between so real offers are being considered