Sales Market Update - July 2013 - Coldwell Banker Bermuda Realty
By Susan Thompson, Coldwell Banker Bermuda Realty. (Click link below for full PDF of article)
Real estate is a complex and complicated topic to completely understand, there is not a ‘one size fits all’ answer to the myriad of questions that plague buyers and sellers. Instead there are several key components that can help those involved in a real estate transaction to make informed decisions.
One of those key components is recognizing the niche markets that exist in Bermuda. The market can be divided into categories based on use; price; design; and even rights afforded purchasers. Recently, for instance, Government has reduced the alien license fees for 18 months plus revised the Immigration Act to allow Permanent Resident Certificate Holders (PRCs) more purchasing power in the market particularly with regards to condominiums. This is good news for sellers as it has increased demand in several market segments.
Did you know that the number of real estate transactions in Bermuda has fallen drastically in the last couple of years? Last year there were approximately 200 transactions. In fact, in recent history the highest recorded number of transactions island wide (excluding fractional sales) was as far back as 2001 (650 transactions).
Based on island wide averages for the calendar year of 2012 what would you expect to pay for a property? Condos on average sold for $650,000 which is comparable to 2003-4 prices. Single family homes are still coveted by Bermudians with an average price of approximately $1,400,000 which is comparable to 2005 averages. And finally, land prices averaged around $500,000 which is close to 2004 averages.
Another key component affecting real estate decisions is access to accurate data regarding the market through an experienced real estate agent. Without accurate data, it is nearly impossible to analyze/comprehend the market in Bermuda. Gone are the days when an agent can effectively practice in all market segments. Coldwell Banker Bermuda Realty maintains teams who focus on individual market segments so that they can provide expert knowledge based on real time market intelligence.
What the average layman may believe about the market and what the statistics support are often at opposite ends of the spectrum. As an example, how many people know that, while still strong, the inventory of properties for sale is shrinking, not expanding? Did you know that there are currently only 236 properties on the market for sale compared to approximately 360 last year? The area that we have seen the largest decrease in listings is in the condo market; condo inventory has fallen from 60% of the total number of properties for sale, down to 40%. So does that mean condos are selling or just removed from the market? Our records indicate that 18% of the total sales in 2012 were condos.
This level of knowledge along with accurate pricing tools offers the biggest advantage to employing a professional to assist with your real estate transaction. Hiring an agent should be looked upon like an actual job interview so that you are sure you are getting the skill set you need.
Possibly the most important component in every real estate decision is understanding your own personal objectives for buying or selling. For a seller these objectives are often financial; but for buyers what is truly motivating decisions is as varied as the buyers themselves. Do you want to live near the water? Are you looking for more space for your growing family? Will your lifestyle benefit from the conveniences of city living?
One thing is clear, buyers have access to more information about real estate than ever before and it is key that the information is up to date and accurate. NAR (US) studies show that 90% of potential buyers use the internet to help them identify properties for sale.
In today’s market some purchasers seem to think they can make ridiculously low offers and the vendors are so desperate for a sale they will take anything...that is NOT the case. In fact, at Coldwell Banker Bermuda Realty our average list to sale price ratio is 92%. That means that we typically price property very close to the actual final selling price, which is good for sellers who want to know that they received the best price for their home in today’s market.
Finally, once you have made the decision to buy or sell you need to find out what is happening in the market right now? While we can not speak for the entire industry it is exciting to say that activity has increased at Coldwell Banker Bermuda Realty with more viewings...offers and sales!! There is a buzz in the office that has been missing for quite a while. And yes, multiple offers (some over the asking price) on correctly priced properties are occurring from properties as low at $90,000 to those as high as $2,400,000 and everything in between.
We have always contended that real estate is cyclical...sometimes it a buyer’s market, sometimes a seller’s market. Sellers and Buyers are realizing that there is opportunity in the market and the time to act is now! For more information on the Bermuda real estate market contact your Coldwell Banker Representative at 292-1793.