South Sound - it's a goodtime to get in
I know you've heard it everywhere ... the real estate marketis down. Homes are not selling, there are too many town houseson the market and .... wow ... there must be over a hundred apartmentsfor rent. Bad news?
For the real estate agents maybe and the vendors who are lookingto make a profit certainly ... but what a great time for buyers.I mean how long has it been since you heard of somebody gettinga great deal in real estate in Cayman?
Quite a while right. We've had such a booming economy for so longit just came naturally to pay more for the same thing each yeareven if we knew it wasn't a great deal.
But things have changed. Now it's "the prices are too high"or "I can't qualify for a mortgage any more" and forthose people trying to build its "the land needs $25,000in fill" or "the price of concrete is going throughthe roof". These are all reasons why the real estate marketis so quiet and buyers are leery or just not interested any more.
Yes it is true, property transfers were down 30% last year over1998 but really ... have you noticed any less construction activityor any fewer For Sale signs on the streets yet ..... no! But inan open market supply and demand should be relatively equal.
So if there is so much still being built and if the re-sales areso abundant while the demand has dropped off ... something hasto give. You've seen the "prices reduced ... prices slashedagain" and these are not isolated cases. It's across theboard. Finally, the market is adjusting and for once in the lastseven years there is a predominant attitude of "value formoney" over ... "pay my price "
So now there are some good deals out there, certainly below theprices of the last three years but more importantly there is value.... because these properties will sell below current replacementcost and believe me, land and building materials are certainlynot going to be cheaper in the future.
That is why this is the time to start shopping.
If you are in the market or think you may be soon, it is bestto start with the prime locations and see if you can find a dealthere first. Not too long ago, if someone called me and said theywere looking for a home or a house lot in South Sound, I wouldsay "well there is not much available and to get in thatprime location you will have to pay a premium to outer districts".
I mean lets face it, South Sound is truly a convenient location,you beat the traffic, it's easy to go to shopping, downtown, tothe schools and the sea. So it will cost more. You certainly couldn'tget a family home for CI$125 per square foot and the new condoswere selling for almost that level even at pre-construction prices.... which are usually 10% below the prices when completed.
But now, with a market adjustment, price levels are being reducedto value for money and no longer dream demand. There are certainlya lot more people who can qualify for South Sound than beforeand there are good sized homes, remodeled and upgraded in theMemorial Avenue, Moxam Road and Sandalwood Crescent areas availablefrom CI$315,000 to CI$499,000. These are great prices for furnishedhomes from CI$111/sq.ft. to $150/sq.ft. and just about all ofthem will consider an offer.
Even in the newer upscale areas like Webster Estates, The Avenueand around the Tennis Club you can buy a variety of nicely furnishedhomes with pools and beautifully landscaped for CI$150/sq.ft toCI$225/sq.ft. These are great prices for South Sound and certainlybelow current replacement values.
With completed inland condos in the more popular South Sound areasnow asking CI$150/sq.ft. and the ocean view units over CI$250per sq.ft., it is easy to see why the current South Sound familyhome prices are a good deal. Too bad there is only a handful ofthem on the market.
With the convenience of South Sound to literally everything, itis understandable that land availability and services are thekey to value.
The exceptionally high cost of servicing land for subdivisionsthese days, even in the suburbs, means a developer can't bringa new house lot to market for much less than CI$50,000. So inSouth Sound, where it may be 30 minutes faster to the office,you can imagine that the single family building lots are scarce.
There are rarely any sites coming available in the favored areafrom Parsons Road to Denham Thompson Way and when they do thevalues are now pushing over CI$10/sq.ft. just for the land. Thereforea 12,500 sq.ft. house lot becomes CI$125,000. So do the math ....if you can buy a 2,700 sq.ft. home for CI$315,000 you are payingless than $75/sq.ft for the building. I call that a deal!
Then take a look at the South Sound upscale lots that are forsale in Webster Estates. They are a great deal now too. They arecheaper than Snug Harbour. One lake front lot is currently availablefor CI$7.25/sq.ft with owner financing! There are also a limitedamount of building sites available in Casuarina Estates at $6.50/sq.ft.and The Avenue at CI$8.15/sq.ft.
These types of locations offer privacy and restrictive covenantsto protect you from being next door to another set of apartmentbuildings. There is also a new set of four lots across from theGovernment dock on South Sound which are each an acre for CI$6.00/sq.ft.They may be larger and therefore pricey for the average familyand they need some fill at the back but with a location rightacross from the sea and easy beach access .... they are a gooddeal.
When markets get jittery it is usually a good time to buy or atleast to make some offers because if you end up with a propertyin South Sound for the price of the suburbs you can't go wrong.Remember location, location, location never changes.
Billy Culbert is the Manager of Rainbow Realty and has beena resident of the Cayman Islands for the past 18 years.
Real Estate Sales RemainedSteady During '99
Land sales in the Cayman Islands topped CI$219 million dollarsduring 1999, according to figures released by the Department ofLands and Survey. Showing healthy levels of activity, they nonethelesstotal some 31 percent less than the previous years CI$317 million.
Recorded transfer figures for last year were also lower, but onlyslightly so; Inclusive of those made for natural love and affection,there were 2,293 transfers, a 2.2 percent decrease in the 2,344of 1998. Over all during 1999, 11,664 legal transactions wereprocessed, bettering the preceding 12 months by 3.6 percent.
Stamp duty totals also fell during 1999, with $29.4 million beingcollected (including $261,752 collected on Cayman Brac). Thissum reflected an overall decrease of 5.5 percent, but sales werebooming on the Brac, where the amount collected represents a 38percent increase over the previous twelve months.
During 1999, the second and fourth quarters were the most outstanding,averaging CI$69.5 million. Momentum built slowly, but the finalOctober to December quarter registered land sales valuing $84.3million.
The monthly breakdown of the final quarter's activity follows:174 transfers valued at CI$36.0 million were made in October;131 transfers for a total value of $20.6 million took place duringNovember, while December's totals were 104 and $27.6 million,respectively.