There is a classic children’s story about Chicken Little—a character who is hit on the head by an acorn and proceeds to run with his friend Ducky Lucky and others to tell the King that “the sky is falling… the sky is falling!”
If you talk to people around Freeport, or listen to the daily onslaught of mainstream news, you probably agree with Chicken Little that the sky is falling when it comes to our economy. If asked about real estate prices on Grand Bahama, Chicken Little would tell you that “The Sky is Falling”, and everyone’s house prices are falling so don’t sell or don’t buy. We have many Chicken Little messengers on the island that think Grand Bahama will never get out of its current slump, and that the housing market will never recover—nothing could be further from the truth. Here’s another way to look at it:
There are 2 important points to consider regarding our current real estate market.
One. Unlike our neighbors to the North, we never really experienced the boom market, which created the American housing bubble. In 2008 when the US housing bubble burst and many homes lost almost 50% of their value, sleepy Grand Bahama prices did not move very much— because they had never soared that much—and so they also did not come down that much either.
Two. We seem to forget that real estate follows a cycle; we forget that history repeats itself. Its like we all have amnesia and we have never seen down markets before. There is a saying that what goes up must come down, and what is down must come up. Real estate is no different. There were major shifts or down real estate markets in 1979, then 1987, then 2008. According to top economists, we are slowly (very slowly) recovering and the markets may stay flat for a while, so we are in a new paradigm—a new model for growth.
It’s All About Timing
If you wait for the markets to hit bottom or fully recover you might be waiting a long time. Prices don’t really go up or down for logical reasons. Sellers and buyers change their minds based on their confidence in the marketplace—that’s what really causes prices to go up and down. Unfortunately, no one can tell you exactly when we reach bottom, because when the market prices begin to rise, it’s only then that you realize you missed the bottom!
There is no doubt in my mind that if you are looking for motivated sellers and deals in real estate, this is the time. It’s one of those times when the aggressive people make a lot of money, and the more timid just look from the sidelines and become what I call a “Would of, Could of, Should of” seller or buyer.
If you are a potential homebuyer, condo buyer, duplex buyers, land speculator, canal homebuyer, or commercial buyer get up off your seat and look around for deals. The market is soft right now, so this is the time to get a terrific value at the right price. Listing prices have not fluctuated on paper, but the actual deals that are being made reflect reduced prices.
No one knows for sure what is in store for the world economics, or Freeport, but what we do know is that throughout history, real estate has proven to be a great long-term investment. While prices are down and sellers are motivated, this may be the right time for you. If you have been thinking about real estate, this is the time to get out there and start looking.
How To Get Started
How do you begin your search? First, find a real estate professional that will help you identify and locate the features you’re looking for in a property. Ask your family, friends and business contacts for referrals of real estate professionals that they have worked with—people who helped them successfully with their real estate purchase and sale. When you find the real estate agent/broker, talk with them about your practical needs and describe the property of your dreams. Work with a realtor you feel you can trust, who communicates a clear understanding of your goals and shows you listings that match your search criteria.
Do your financial homework. Meet with the banks to determine how much you can borrow based on your income, and research interest rates. Decide how much cash you can put together for a down payment, and how much you need to put aside for closing costs, which typically amounts to between 4% and 7% of the purchase price of a property. Do your homework financially.
As you go out property-hunting, concentrate on neighborhoods that are ideal for your needs. Look at homes that have enough square footage, a pleasing floor plan, and a suitable yard for your family, or boat dockage if that’s important to you. You can always repaint the walls and replace the carpet, but changing the “footprint” of the home is more complicated and costly.
Don’t procrastinate. Do it NOW. If your realtor has a property to show you, go out to look at it immediately. If you really like the home and can picture yourself living in it contentedly, consult with your realtor about making an offer right away.
Before entering into negotiations for the home, ask the seller to fully disclose any serious defects that may require repairs, particularly any that involve one of the major systems in the home.
Don’t wait for interest rates to climb – initiate your home buying process now because the future of Freeport might just surprise you. Many of us who have been around Freeport for many years know that Freeport has always been the bridesmaid—never the bride—but the time is coming that Grand Bahama will succeed in spite of itself to fulfill its potential.
We have all become very jaded and think that Freeport will never get ahead. Nothing could be less true. I believe it is impossible for Grand Bahama Island with all its potential and strategic location, to stagnate forever. From a pine barren covered island inhabited by Lucayan and Arawak Indians, then re-discovered by Columbus, then settled by the displaced colonial loyalists and slaves, and then re-discovered again by Wallace Groves, the island has come a long way already. At one point in time, not that long ago, it seemed impossible to imagine the size and scope of the Container Port, the Grand Bahama Shipyard, the industrial sector, the airport, the infrastructure, the homes, the condos, the communities, the utilities, the schools, the restaurants, the shops, the business owners, the employees, the canal system, and our incredibly resilient and caring people.
Freeport is a city with great potential. It will move forward. Sure we could improve on quite a few things, but it only takes a series of small changes to make a major shift. If we fix things like the airlift situation, create a first class cruise port, develop medical tourism, create more jobs, attract more investors and visitors, beautify the island’s landscaping, and have all of Freeport working together, these changes will create a major shift in the economy and Freeport will be reborn.
This will of course change the real estate landscape, and the market could change from a buyers market to a sellers market almost overnight. There are many people working towards this change and we all need to pitch in to help our community fulfill its promise. It will not be done for us. All of us in our own small way must make it happen—and it will.
It is time to bring the magic back to Freeport—a community that was once proudly dubbed The Magic City. At Coldwell Banker/James Sarles Realty, we believe in the future of Freeport.
Good Luck with your property hunting. Until next week! — James Sarles