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New real estate agency awaits lower mortgage rates

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New Realestate.bm team Katie White, left, David Boyce and James Cox (Photograph supplied)

A new Front Street real estate firm is expecting buyers to “appear out of the woodwork” if the Federal Reserve cuts interest rates this summer.

“We already have quite a lot of buyers on the sidelines,” said David Boyce, who started the firm in January with James Cox and Katie White.

Mr Cox said that although Bermuda banks had discretion as to how they reacted to changes in the federal funds rate, the changes still impacted the island.

“We are definitely watching it closely,” Mr Cox said. “If they cut interest rates, it will be great for sellers but less good for buyers because there will be more competition.”

Various financial experts, including the Kroll Bond Rating Agency, have predicted significant cuts in the federal funds rate this year, probably starting at the end of Q2.

This comes after the Federal Open Market Committee raised rates 11 times in a year and a half to bring skyrocketing inflation under control. It meant higher rates for mortgages, credit cards, car loans and other forms of lending.

Mr Boyce said that, due to high interest rates, the sales market had levelled out but was standing firm.

“It is certainly still a good time to be selling,” he said. “At some point, we will see a shift.”

However, he said, Bermuda’s buyers’ market was still tough.

“We are still seeing a lot of buyers looking for properties and a small volume of properties available,” Mr Cox said. “Everyone was expecting to see a bit more of a shift with interest rates going up.”

He has seen a softening in the market but it has not been as dramatic as he expected.

Realestate.bm is seeing the most demand for lower price-point rentals.

Mr Boyce partly attributed this to cheaper rentals being taken up by Airbnb.

“That is simply because there is a far better return, which in turn has an impact on the rest of the market,” he said. “Unfortunately, the cost of construction is so high right now, it is difficult for developers to build lower-income housing. It is simply not feasible because of the cost of living, and the cost of doing business being so high here.”

The founders of Realestate.bm are all former Keller Williams Bermuda agents.

“We always worked well together as a team,” Mr Cox said. “We felt there was a real opportunity in the market to change things up.”

They wanted to create a real estate company where their agents worked together for the benefit of the client, rather than in competition with one another.

They were particularly excited to land a partnership with British real estate giant Chestertons. Realestate.bm is now part of their global network.

“We looked at potentially partnering with several different real estate companies,” Mr Boyce said. “As the process went on, we were able to settle on Chestertons, which aligns with our values. They do a lot of charity work, which we intend to do. They will also give Bermudian sellers who are trying to sell in the international market, a lot more exposure.”

Realestate.bm has invested in the latest mapping equipment so they can generate floor plans and virtual walk-throughs for clients.

Realestate.bm hopes to entertain in their new office space on Front Street in an effort to better know clients (Photograph supplied)

They are also paying close attention to their cybersecurity. Mr Boyce said setting up the company was not an easy thing.

“You have to make sure that everyone has been educated properly on compliance,” he said. “Luckily, I have had a lot of help from a few lawyers that have ensured that we are on the right track and have done everything to the tee.”

Their office at 27 Front Street offers beautiful views of Hamilton Harbour, which they feel can also be used to entertain clients.

Mr Cox said: “It has always been about relationships for us. We want to bring clients up here and entertain and get to understand people’s needs and wants, on both sides, sellers and buyers.”

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Published April 17, 2024 at 7:55 am (Updated April 17, 2024 at 7:21 am)

New real estate agency awaits lower mortgage rates

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