Tuesday, July 23, 2024
By NEIL HARTNELL
Tribune Business Editor
New Providence real estate sold at the fastest pace for two years in the 2024 second quarter with a well-known realtor yesterday saying the market had achieved a state of “balance”.
David Morley, Morley Realty’s principal, told Tribune Business it was difficult to predict “which way it’s heading” with the sector having “levelled off” as buyers absorbed much of last year’s “inventory surge” across the major island markets.
He added, though, that there was “no doubt” Bahamian realtors and their firms continue to enjoy strong sales despite not attaining the heights of the post-COVID “golden years” of 2021 and 2022. Mr Morley said the latest statistics “show a really healthy, consistent market” with “nothing alarming” on the horizon despite the looming US presidential election and uncertainty over the Federal Reserve’s interest rate policy.
He spoke after his firm, drawing on data from the Bahamas Real Estate Association’s (BREA) Multiple Listing System (MLS), noted that the market’s performance varied by island during the three months to end-June 2024. Morley Realty’s 2024 second quarter report noted, in particular, that home and land sales on New Providence hit their fastest pace for two years during this period.
With buyer demand ensuring that the time required to sell new home listings “remains very low”, Morley Realty said: “Homes in Nassau and Paradise Island are selling faster than they have in the past two years, and this trend is also observed in the land market for this area.
“Conversely, the land market across the other four islands has remained stable, though there have been quarter-over-quarter (QoQ) increases in days on the market (DOM).” The MLS data showed that some 56 home sales were completed on New Providence during the 2024 second quarter, which represented a 19.1 percent increase compared to this year’s firs quarter but a 28.2 percent decline year-over-year.
“In the 2024 second quarter, homes have been selling faster than in any other quarter over the past two years, with days on the market decreasing compared to both the last quarter and the 2023 second quarter,” Morley Realty said. The time a listed property spent on the market stood at 85 days, representing a 35.6 percent decline compared to the 2024 first quarter and a 5.6 percent year-over-year fall.
“Contracted Sales increased by 28.8 percent year-over-year but decreased by 5 percent quarter-over-quarter,” Morley Realty’s report said of New Providence’s real estate market, which saw some 76 homes o under contract in the second quarter.
“Similarly, the volume of new listings decreased from last quarter but is still up nearly 10 percent from last year. The volume in the 2024 second quarter remained like what we have seen since the 2023 second quarter.” The sale-to-list ratio remained steady at 94 percent, signalling that vendors were receiving close to full asking price.
Vacant land sales on New Providence also exhibited similar trends in the 2024 second quarter. “The New Providence land market experienced a significant surge in demand,” Morley Realty’s report said. “The volume of completed sales surged during the 2024 second quarter, more than doubling the volume in the 2023 second quarter and last quarter.
“Similarly, the volume of contracted sales decreased from last quarter but more than doubled compared to the 2023 second quarter. Despite the quarterly decrease, the 2024 second quarter remains above the normal range for this market.”
Some 57 vacant land sales closed on New Providence during the 2024 second quarter, representing 103.6 percent and 119.2 percent year-over-year increases, respectively. Contracted land sales also jumped by 114.8 percent compared to the same period in 2023, although they were down by 37 percent compared to the 2023 second quarter, while new listings were up 8 percent at 94.
“The volume of new listings increased by 8 percent from both the 2023 second quarter and last quarter. This is encouraging, as growing inventory provides more options for buyers in response to rising demand,” Morley Realty added.
“The average sales price during the 2024 second quarter marks the highest average we have seen over the past two years. During the 2024 second quarter, the median sales price also increased, reaching the highest median observed in the past two years.”
The average selling price for New Providence land, according to Morley Realty’s report, increased by 100.3 percent - more than doubling - compared to the 2024 first quarter, while also jumping by 53.3 percent year-over-year to hit $335,000. The median sales price for vacant land rose by 75.1 percent and 66.7 percent quarter-over-quarter and year-over-year, respectively.
Mr Morley told Tribune Business: “It doesn’t look like things have changed much since the [2024] first quarter... I want to believe it’s a balanced market right now. Which way is it heading? I’m not sure at this stage.
“The only thing we’re trying to put a better calculation on is to predict whether it’s a buyer’s market, whether it’s a seller’s market or whether it’s a balanced market. Hopefully in the next couple of weeks we will have a better mechanism to predict what type of market we’re in. We typically don’t have big swings in this market.”
The Morley Realty chief added that the influx of new inventory and listings, which began in the 2023 second quarter, had largely been absorbed by buyer demand. “I think what we’re seeing now is a levelling off,” he said.
His firm’s MLS data analysis agreed, stating: “Beginning with new listings, a notable trend among most markets is the year-over-year increases paired with small quarter-over-quarter decreases. Looking back to the 2023 second quarter, many of these markets were just starting to experience an inventory surge but now we are starting to see the opposite.
“The recent quarter-over-quarter decreases in new listings could indicate a stabilisation that may help reduce the overall inventory volume if this trend continues or holds steady. Some markets are seeing decreases in new listing volumes, likely due to growing or steady demand - contracted sales and completed sales. Demand continues to rise in Abaco, Eleuthera, and Nassau.
“While these locations are in high demand, the land market across The Bahamas is gaining more attention than the housing market. During the 2024 second quarter, all five island markets for land either experienced steady demand or growth. Conversely, the demand for homes was more variable and dependent on the specific island, rather than following a universal trend.”
Asked whether Bahamian realtors are enjoying healthy sales activity levels, even though business volumes have stabilised at more normal levels following the post-COVID boom, Mr Morley replied: “There’s no doubt about it. All the real estate companies I talk to are experiencing good sales.
“It’s not to the extent experiences post-pandemic in the golden banner years, but everyone is doing well and everyone is succeeding. The demand is there. The further we move away from the pandemic, when the banks froze all lending, you now have more people employed or back employed and banks are better able to assess them for financing and purposes of lending.
“I would anticipate this will continue through the remainder of this year, especially the local market. I think that is being driven by the fact the banks want to lend money. They have money to lend but the lending criteria are a lot stricter and stiffer than before. They’re lending to qualified people but doing more risk analysis.”
Mr Morley said some international clients, especially Americans, tend to “hold off” when faced with a US presidential election “to see what the outcome is going to be”. He added: “It’s a lull in the market, but not necessarily for a prolonged period of time. The local market just continues on.
“There is nothing alarming in a negative sense. The data shows a really healthy market and consistent one, especially from the last quarter.” With some 700, out of 900 licensed Bahamas Real Estate Association (BREA) agents, using the MLS, Mr Morley said the data provided by the system captures more information than previously thought and thus gives a good indication of actual market activity.
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