Home prices have dropped by up to 30% since 2008, says realtor
Property prices in Bermuda have plunged 10 to 30 percent in the last four years, according to Coldwell Banker Bermuda Realty's latest newsletter.
And in what is solidly a buyer's market, condos sales in 2011 have already outsold all of 2010, with the same expected for single family homes.
“We have all heard the old adage, 'be careful what you wish for'. Well, many have wished for it and it has happened!” Susan Thompson said in this month's Coldwell Banker Bermuda Realty sales market update. “Real estate prices in Bermuda have fallen quite noticeably in the last several years.
“From a buyer's perspective, a reduction in prices is music to their ears; but for property owners and potential sellers it's a bit like finger nails across the blackboard … loud and unpleasant. Investment values have depreciated, rental incomes have fallen, and many owners are servicing debt that is no longer sustainable.”
While Ms Thompson said it's difficult to quantify how much prices have dropped due to variables such as location, condition of property, type of property (condo vs. cottage), amenities, etc: “We can make a sweeping statement saying prices have dropped between 10 percent and 30 percent since 2008.
“However, it is important if you are thinking of entering into a real estate transaction to find out just how market conditions are affecting your specific segment of interest.
“For instance, the difference in average condo prices comparing 2010 to 2011 was only a three percent reduction, which makes pricing an interesting challenge.
“If you are looking to purchase and you have the financing; choices abound with inventory levels still remaining high, but they have been marginally higher in the recent past.”
Ms Thompson said the condo market represented approximately 51 percent of the current property available on the market, which is down from last year's high of 60 percent.
“What can one expect to pay for a property based on current inventory (which can change daily) … condos range on the low end for a two bedroom/one bath unit in Sandys at $295,000 to the $5,850,000 elite Tuckers Point Club four bedroom/four-and-a-half bath Ships Hill unit.
“Whereas stand-alone cottages range on the low end for a 2 bedroom/1 bath Sandys property at $450,000 to in excess of $20,000,000 for spectacular, one-of-a kind properties.
“Statistics are always such a revealing summary of a period of time, which gives clarity to the facts versus mere opinions.
“While the total number of transactions are incomplete for 2011 (expected to have complete government records by midyear), from the totals available thus far, condominiums have already outsold 2010 and we expect the same of single family homes.
“This is good news because it means that the market is active and that price adjustments have made it possible for more people to enter the market.”
Ms Thompson noted that according to economic experts, the recession in Bermuda started in 2009, which means we are three years into a slowdown that we have all experienced. These same experts believe that we are another year and a half away from recovery.
“Despite this prediction, however, we are seeing a lot of activity for the start of the year; which is nearly equivalent to our 2009 transaction levels,” she added.
“This activity combined with government's eagerness to review current real estate policies and legislation gives us hope that 2012 will be a better year.
Remember, the key to any successful real estate transaction, whether buying or selling, is to keep in contact with a knowledgeable, experienced real estate agent that can give you specific, current data about the market.”
Government said on Friday it was going ahead and changing land policy to allow Bermudians to again sell properties to non-Bermudians over a set ARV, and Bermudians married to foreigners will not need a licence for a first home.