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Check out my latest listing, its luxury, its future investment, its the most prestigious estate on the market in the Beautiful Abacos.

 

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HG Christie has finally launched a new website portal that allows you to view listings by area and see their exact location and pricing.  It is kind of interesting and somewhat eye opening, if for instance one zooms into Marsh Harbour or Treasure Cay and views how many properties are currently for sale in a specific area.  There are few little kinks to work out but overall a great tool.  Check it out here:

http://hgchristiebahamasrealestate.bs

 

All I can say it is has been an extremely busy 2014 so far in the real estate business. I have not been able to make myself sit down and write up an update to this blog. Every week, Every day has been non-stop trying to keep up with the demand. Demand for appraisal work and for sales work and often juggling both can be tricky. Both disciplines have specific time frames to work with. Buyers and sellers want immediate responses and while clients looking for appraisals are always on a limited time budget.

ABACO - WINDING BAY PLUS 49

Above: Incredible New Price on a harbour front 1.8 acre parcel in Little Harbour.  $200k for a beautiful piece of paradise.  It has beach, deep water for a dock, and 40′ elevations, it has it all except that pesky electricity supply.

Speaking of Appraisal work – there has definitely been an uptick in appraisals services volume which indicates that a) credit is become more available and mortgages are become easier to obtain and b) consumers of real estate and loans are expressing more confidence in the economy. Typically you would not borrow money if your financial future was looking poor right? I will mention that the commercial banks in the Bahamas have severely clamped down on appraisal standards and lending requirements here.   In the past a simple cost/replacement calculation would have sufficed to justify a value estimate however now every local bank is requiring that at least 2 comparable sales are included in the analysis and used to justify the final number reported. In some ways this is a good thing for our market, it is a maturation of the lending and mortgage business here partly as a result of the implementation of the Bahamas MLS. On the other hand it means value estimates are generally lower than they were in the past and less subject to the ‘interpretation’ of the appraiser. In any event higher reporting standards will benefit everyone in the long run.

How is the Abaco Real Estate market doing these days?

Well I’ve pulled up some sales activity numbers from the MLS which give a pretty good snap shot of the past year. Everyone is aware that the South Florida real estate market saw a strong bounce back and return to positive appreciation about 2 years back (2012). We expected it to happen in the Bahamas last year however while 2013 saw a little improvement, appreciation was stagnant. 2014 appears to be seeing a similar flat line in property values but that is a good thing, certainly better than a declining market. Steady markets are good, they are reliable, predictable and safe. Excessive appreciation is often a bad thing leading to a correction as we have all seen about 5 years back.

The past year of Abaco Real estate sales volume shows a huge uptick this year:

Abaco sales sep13-aug14 copy

You can see at the end of 2013 there was a steady transaction rate of 2-6 which is reflective of the whole of 2013 and typical or 2012 also. You will notice that as of February, there was a marked improvement in sales volume. You will also note the modest increase in sales of properties over $1M.

Interesting to note – In a previous post I wrote about the busiest month of the year for sales activity, and April is typically one of the best for real estate both in the Bahamas and in the United States. But for some reason this past year, April saw a huge drop. I will have to look into what happened in April this year.

Additionally, August is typically one of the slowest months of the year for sales, but this year is looks like it is one of best of the year.

All in all, I have strong confidence that the market in Abaco is back on track and we will see some good but steady growth this coming year.

That confidence is supported by several factors at play that will return Abaco and the Cays back to a strong yet sustainable growth level.

Treasure Cay is supposed to have a new managing partner coming on to take over and rejuvenate the community. The area sorely needs some new energy to revitalize and upgrade. It is a shame because the community has such tremendous potential but is being held back in my opinion.

Winding Bay, The Abaco Club is set to have new management and ownership coming October. The Abaco Club has been struggling to realize its full potential for the past couple of years and property owners have seen the value of their investment erode away substantially. With the pending take over by Southworth, out of New England the area should see a substantial upgrade and corresponding improvement in property value. I have confidence they will be the right fit and benefit all of Abaco.

The new Marsh Harbour International Airport (MHH) has been operational for some time now and is an immense benefit to the island and offers a clean, efficient and air conditioned space for travelling to and fro. Now we just need direct service from Atlanta by Delta or even perhaps direct service to New York. It is a beautiful building and gone of the days of sloshing through mud to get to your car or taxi.

The Hope Town Inn & Marina has been open for over a year and they have seen tremendous approval by the market. The marina is always very busy, and the rooms are on constant turnover. The property is attractive, convenient and becoming a staple of the Hope Town scene.

Great Guana Cay maybe seeing some big things coming on stream soon, but more to come on that later.

Unfortunately Green Turtle Cay is still struggling a little in terms of visitors, but this is proving to be a positive aspect for the second home owner market. Folks are finding the quiet and peace away from the busy tourist action the ideal spot for a quaint second home. The old New Plymouth Inn is ready for new life and would be a wonderful retirement project for the right person. It has lots of history and character and would be a ton of fun to return to it’s glory days.

Lastly, my 2 cents – A house painted white seems to have serious trouble selling in the Bahamas. I suppose it is the only colour to paint a house in certain parts of Greece but it does not seem to work here. Anecdotally, there are several bargain homes on the market in Abaco that have been sitting for a good long while and I attribute it to the colour of the house – white. Similarly unpainted cedar siding seems to be equally difficult to sell.

Happy back to school and International Literacy Month, And Coastal Cleanup Month!

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I have been remiss in not keeping up with this blog and I’ve now missed almost 2 months and not written anything.  Shameful.  Anyway, it occurred to me that a good post would be to share my response to a potential client who has asked about owning a vacation rental home in the Bahamas.  There are some folks who will probably find this information quite useful:

Hi Angela,

I hope all is well.  Apologies for not responding to your previous message, it has been a very busy week.

The condo in Freeport, for $86,000 would be a great investment, they do well as long term rentals.  Freeport’s economy is generally a little depressed at the moment but should improve soon.  Tourism is down on the island so renting short term to vacationers will be challenging.  Definitely possible though, with good prospects for improvement in the future.  Freeport has a number of large hotels so there is plenty of competition for tourists’ dollars.  Abaco by comparison only has 2 medium sized hotels and a number of small ones (12 rooms or less).  And then there are about 2,000 homes or condos in a vacation rental pool.  The island is a big market for vacation rentals.

Elbow Cay and Hope Town are the prime vacation rental market where a good home can get up to 30-35 weeks a year.  On the other extreme Lubbers Quarters Cay typically gets 10-12 weeks a year.  A good rental in Marsh Harbour or Treasure Cay can get between 15-20 weeks.  The property has to have beach or waterfront to swim in and if there is a dock or a pool that the renter can use it is a big bonus.

The reality of owning a vacation rental home in the Bahamas though is not that rosy in terms of income.  Unless you happen to get one of the prime houses on the beach in the middle of Hope Town, that rent solidly back to back through the year, the income generated typically covers expenses and holding costs of the home.  In most cases renting for 15 weeks a year will usually cover annual property tax and the insurance costs and most maintenance and upkeep of the home as well as cover the utilities.  Basically a break even and owing the property does not cost you anything.  Once the place rents more than 15 weeks it can be a money producer, while less than the 15 and it usually needs a cash injection.  This 15 week number is a ballpark average, some homes with low values and low replacement costs could have low rates and therefore might break even at 10 weeks or less.  Other high-end luxury homes tend to never break even on income and expenses, but in the upper tier, the taxes can be quite high so the owner is just happy not to have that liability going out.

Then the real benefit of owning a vacation rental home is the ability to have a place to stay and vacation in, friends and family can use it and you get to enjoy the island life without the big expense of a hotel room or renting out a house for a week.   It does mean that many owners spend their 3 weeks vacationing here doing repairs and upkeep, but it is a small  price to pay for paradise right?   If you want to look at any specific homes and consider the rental income potential and the associated expenses let me know and we can go over the numbers.

The home you asked about in Casuarina Point is not going to be the best short term rental, it would typically expect about 3-4 weeks a year.  The more remote a home the less demand it has as a vacation rental – people on vacation usually want to have the option of a restaurant or two nearby to have dinner in.  Who wants to cook dinner every night when on holiday right?  The Casuarina home would rent for about $1,200 per week for probably 4 weeks a year so it could expect a gross income of $4,800 which would not cover expenses unfortunately.  In the past this home in Casuarina would have rented well, the area was a hot spot for fly fishermen visiting Abaco who needed a place to stay that was close to the sand banks, flats and creeks.  Recently though a few dedicated fishing lodges have opened up like ‘The Abaco Lodge’ and ‘The Delphi Lodge’ which cater to the fishing crowd and offer very nice accommodations and gourmet prepared meals.  These lodges have put the small vacation rental villas out of business essentially.  You would need to factor in management of the house to do check-ins and check outs and make sure it’s cleaned etc.  Most property management and vacation rental professionals will charge 30% of the rental rate which usually includes the cleaning.

But Hope Town and Green Turtle Cay are still key vacation rental hot spots and the right place can bring a decent return on investment.  The trick to remember though is don’t use the key holiday weeks for yourself.  Let it out for Christmas, New Years, Easter, Spring Break, Memorial Day weekend, US Independence weekend, etc. etc.  Many owners of vacation rental homes reserve these keys weeks for themselves and then grumble that the place is not getting enough rental income – well duh!

The Casuarina home has been on the market for about 3 years, the owners are definitely ready to get it sold.  It has potential to be converted into a bed and breakfast type of place if the owner wanted to live there and run it.   There is lots of land to build additional cottages.  The only fees would be insurance (probably about $3,500 p/a) and property tax (about $1,600 p/a).  The only other expenses would be utilities and maintenance, there are no HOA dues.

I hope this is all helpful and let me know if you have any more questions or would like to discuss anything.

Best regards,

Dwayne.

From: Angela
To: Dwayne Wallas
Subject: Re: New listings from Your REALTOR

Hi Dwayne,

About this property: http://www.hgchristie.com/details/abaco/casuarina-point/house-as12181

Was wondering how it would be as a holiday rental, how many weeks of the year. Also how long has this house been on the market for, and what on going fees apply to own it if any? Any details you could provide would be helpful.

Thanks and Kind Regards,

Angela

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