3 Positive Things About the Current Real Estate Market
Ongoing news about fluctuations in the economy and the real estate market can be stressful, even for seasoned homebuyers. Inflation, lending requirements… yikes. If you’re trying to buy or sell a home, all this negative, rapid-fire information can naturally feel overwhelming and downright make you second-guess getting into the market at all.
But if your goals include buying or selling a home in the near future, you should know that there are significant plusses to doing it now. Read on for three notable positives about the current Bahamas real estate market.
1. Listing now means more competition.
Inventory was a major problem for buyers in the housing market in 2021 and 2022 because of reduced inventory levels.
According to the Bahamas Real Estate Association ("BREA") MLS 2022 stats, in New Providence, home sales (222) outpaced new listings (181), whereas in the first half of 2023, the pace of home sales continued (120) but the quantity of new listings (334) has increased 556% over 2022 and significantly helped replenish the inventory of available homes.
According to the BREA MLS 2022 stats, in Abaco, home sales (103) drastically outpaced new listings (36), whereas in the first half of 2023, the pace of home sales slowed slightly (39) but the quantity of new listings (87) has increased 242% over 2022 to help replenish the inventory of available homes.
For buyers, a replenishing inventory is beneficial and provides more options for finding a home that suits their needs. But for sellers, a replenishing inventory could eventually pose more competition which could result in homes being on the market for longer periods of time, and reducing the percentage of sale price versus the list price. If you decide to list your home now while the buyer demand remains strong, you’ll have more buyers vying to purchase your property than if you wait.
Visit our Bahamas Market Report Q2-2023 for more valuable stats on New Providence and Abaco, and also Eleuthera, Exuma and Grand Bahama too.
2. Buying now has multiple benefits (yes, really!)
Even though sellers are still getting higher prices making it more difficult for buyers, buying a home now still has more benefits than trying to wait out tough conditions.
For one, there’s no telling how long certain market conditions will last, and overall, real estate prices rise in the long term. So there is no real chance of prices dropping in the long run, only buyers facing even higher home values in the future. Historically, The Central Bank of The Bahamas very rarely changes the prime lending rate.
Instead, it’s smarter to get into a home now and start building equity.
What’s equity? It’s the difference between the value of your home and the amount you owe on your mortgage. It’s gained as you make payments on your loan at the same time the value of your property rises, and it represents the amount you’ll get back when you eventually sell. The more equity, the better—and investing in your own home now means you will benefit from rising prices in the future instead of struggling with them.
3. Strong home prices are good news for the economy
In any country, plunging home prices are one classic sign of an economic recession. The BREA MLS data for 2022 and 2023 show that median home prices in both the New Providence and Abaco markets continue to increase — so far, no signs of a recession here! The Bahamas economy is predicted to continue growing as our tourism levels are exceeding pre-pandemic levels. Consumer spending is predicted to rise and our unemployment rate is the lowest in the near history of The Bahamas. Competition amongst the local banks for homebuying lending is growing and the Bahamas Government continues to provide tax incentives to first-time homebuyers. In all, it is very unlikely that property prices are going to drop any time soon - a good sign that we’re likely to avoid a recession in the near future.
If affordability is a concern for you as it is for many buyers, reach out to your Morley agent to ask about your options. If you’re a first-time homebuyer, many Government incentives exist to help you make your first home purchase.
Contact your Morley agent for more information.