Positive signs for real estate market
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The real estate market is starting to show signs of recovery, according to Coldwell Banker Bermuda Realty's agency manager Susan Thompson.
Ms Thompson said that 2011 was expected to be a big improvement on 2010 and believes that the last few months may have been a turning point.
She added that the market may be at or close to its bottom and now was the right time to buy.
Speaking to The Royal Gazette on Friday, Ms Thompson said: “By speaking to a lot of my colleagues in the real estate industry I think they seem to be quite positive because of the increased activity and renewed interest.
“I think 2011 is going to be a much better year than 2010. The market is definitely segmented - you have the first-time buyers, people moving up, the ‘domino' effect where a person will have to sell their property to acquire another.
“Also a lot of non-Bermudians are coming back in the market with a lot of interest. All of the signs seem to be positive - we just have to wait and see what happens.”
Writing in her January 2011 sales newsletter, Ms Thompson said that at the start of last year many sellers held unyielding to their list price not understanding what extent the market had shifted over the past couple years.
But she said that by the middle of the year, reality set in with a new awareness that there were fewer buyers in the market with multiple choices and in order to compete in this changing climate, vendors needed to make their property not only visually appealing, but also financially attractive.
“Days on the Market (DOM) were exploding with agents advising owners to list their properties for a minimum of six months,” she said. “Numerous sales transactions were dominos meaning there are several contracts interlinked, and licences for Bermudians with non-Bermudian spouses were taking up to eight months for approval.”
Ms Thompson said that December 2010 was one of the highest performing months of the year and 2011 has started off with stronger than expected momentum.
She said that typically these two winter months were “sleepers” but that had not been the case as activity noted by her sales team had been brisk.
Adding that the perception was of a drop in housing prices, Ms Thompson said there were some good bargains to be had, as evidenced by recent sales where a one-bedroom condominium sold for $375,000; a three-bedroom condo for $555,000 and records show a number of two and three-bedroom cottages fetched between $630,000 and $795,000.
“The outlook for 2011 is generally positive, albeit moderate: vendors have responded to market pressures; the backlog at The Department of Immigration of non-Bermudian spouse licences has curtailed and prices have stabilised,” she said.
“Consumers' confidence has increased with a renewed interest in property ownership at what is considered deals that have not been seen in many years.”
She said that while nobody knew for sure when the “bottom of the market” had or would hit until about six months afterwards, those that have been in the industry for numerous years believed it was “at or nearing the bottom”.
“One thing is for sure, unless you are one of the few privileged, your choices are either rent or buy,” she said. “Real estate is a long-term investment and while the monthly payments to own may be marginally higher initially than renting; that will change after about five plus years and more importantly you will build equity and take control of your life.
“Why wait and ‘try to time the market' only to discover that you missed it and prices are instead going up? Now is a great time to buy and here are a few examples of what you can purchase today at far reduced prices from only a few years ago.”
According to the latest residential figures released by Coldwell Banker a lot of land in Pembroke was valued at $395,000, a three-bedroom cottage in Paget was going for $670,000, a two-bedroom main house and a two-bedroom apartment was $1.06 million, a two-bedroom condo was $469,000, and a three-bedroom apartment dwelling was $899,999.
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