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 New Providence | Grand Bahama | Abaco | The Out Islands WHAT-TO-DO - FREEPORT/LUCAYA & GRAND BAHAMA ISLAND - JAN 2004  Second home When's the right time? Originally published WHAT-TO-DO - FREEPORT/LUCAYA & GRAND BAHAMA ISLAND - JAN 2004 © Etienne Dupuch Jr Publications Ltd Is there a good time and a bad time to buy real estate in The Bahamas? The answer, it appears, is yes, and no. Yes, if you are a speculator buying property strictly as an investment, and no if you are looking to buy a second home. In the latter case, almost any time is the best time, say many real estate agents. " We have two separate genres of purchasers in The Bahamas; the second home buyer and the investor or land speculator," says Lanelle Phillips-Cole, district manager for H G Christie in Freeport. "The best time to buy differs, depending on the client's ultimate goal." Phillips-Cole says investors, unlike home buyers, do not buy because they like the looks and amenities of a property. "They research the market to find out whether a certain area is destined to appreciate in value due to new developments... such as a major hotel or large-scale venture that will bring in a large number of foreigners or transplanted Bahamians from other islands." Grand Bahama, and particularly Freeport, is experiencing growth in several directions with a new casino, the possibility of locating a new centre for the transmission of liquid natural gas via a pipeline to Florida, as well as ongoing additions and improvements to Freeport's container port, airport, shipyard and drydock businesses. As well, DEVCO, the real estate arm of the Grand Bahama Port Authority, plans to develop "high-end, large-scale, long-term, resort-based residences" on 17,000 acres of beachfront property in Grand Bahama over the next 20-25 years. Other developers now offering attractive second homes and vacation retreats include Bell Channel Club and Lucayan Marina Village, both in Port Lucaya. Phillips-Cole says present and future building has created a "best time to buy situation" for investors. However, she notes that prices are beginning to rise "so getting in within the next year or so will be key." " Is it a good time to buy? That depends on what type of property you are talking about," says Christine Wallace-Whitfield of Bahamas Realty in Freeport, who believes a strong buyer's market is under way. " When I refer to a buyer's market, though, I am referring to vacant land. You can always negotiate more with vacant land, as opposed to a house or a commercial building," says Wallace-Whitfield. "You'd be surprised how low somebody will go to sell their land in Grand Bahama." However, prices were fairly stable towards the end of 2003 and the beginning of 2004 for second homes, condos and timeshares. But then, timing is less critical for second home buyers adds Phillips-Cole. These buyers "tend to concentrate on the ?where' and the ?why': Why do they want a second home and where do they want the home? " There is still an interest in the future value and liquidity of a property one buys as a second residence. However, timing is less involved in the decision," says Phillips-Cole. Always the best time One real estate developer says he has never yet sold a home to a buyer who thought it was the best time to buy. Nevertheless, when visitors do buy - mainly because they've fallen in love with The Bahamas and can't help themselves - it almost always turns out that it was a great time to buy. " Real estate is a proven investment over the long term," says the developer. At press time (late fall 2003), the market for second homes in The Bahamas ranged from "booming" to "stable" to "slow," depending on which of the 16 major islands and island groups one wished to buy a home or property. But these descriptors are always temporary. "The best time to buy is when you have the money and you've found a place that is right for you," says George Damianos, president of Damianos Realty, which has an office in Grand Bahama."People know what they want... something that fits with what they have envisioned and want to own." " The best time is all the time but you have to be educated," cautions another realtor. "You have to study the market for awhile, and see trends - you can't just jump into it." Mistakes buyers make " When buyers contemplate a new purchase they have a short time horizon," explains the developer. "They tend to compare today's prices to better deals that were available at an earlier time and (they) are also focused on the possibility of the market going down. All of this creates conflict in the decision-making process. " They try to trade the market, which is not very practical. Their fear is that they are making a bad investment as there was a better time to buy. Hence they tend to think that they have not optimized their decision making. " I remind people that real estate is generally the largest and most successful investment they will ever make. It is also a consumption good that provides the benefit of use. That combination is hard to beat." If timing is not critical in buying a second home, other factors are, say the agents. "You have to buy smart, and you have to buy right," says an agent with Bahamas Realty. "You make your profit when you buy, not when you sell. That is especially true here in the Bahamas, where closing costs are somewhat high." So home buyers should not give in to impulse, should research the market, find out recent prices for comparable properties in the same area, ensure that a proper appraisal is made and rely on an accredited Bahamas Real Estate Association agent. And finally, they should not try to time the market. Buy the best home you can afford at the time. And then enjoy it. |
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