The Tribune

• Real estate ‘slowly turning to buyer’s market’

• Data shows shift after ‘bonkers’ post-COVID

• Morley chief: ‘All good things come to an end’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

New home listings in the major Bahamian islands increased by 1,025 percent year-over-year for the 2023 second quarter, a major realtor disclosed yesterday, amid signs it is “slowly turning to a buyer’s market” after a “bonkers” post-COVID.

David Morley, Morley Realty’s principal, told Tribune Business that the new listings statistics and other data - which has been analysed by his firm - shows the Bahamian real estate market is presently undergoing “a replenishment, not a depreciation” with more properties becoming available to buyers than are actually being sold.

The firm’s analysis, employing data obtained from the Bahamas Real Estate Association’s (BREA) Multiple Listing System (MLS), described the increase in new listings across Abaco, Eleuthera, Exuma, Grand Bahama and New Providence as the most significant market shift during 2023.

“The biggest and most consistent market change noted from the 2023 second quarter data was the significant increase in the number of new listings in all the island markets in both homes and land,” Morley Realty said. “New listings of homes across the island markets in the 2023 second quarter increased over the last quarter by up to 69 percent, and increased year-on-year by up to 1,025 percent.

“New listings of land across almost all the island markets in the 2023 second quarter increased over the last quarter up to 78 percent, and increased year-on-year up to 2,300 percent....... The increase in the inventory of properties provides buyers with more selection.

“If the demand to purchase real estate remains consistent in the coming quarters, then the near future market data should start showing an increase in the days on the market, a decrease in the listing-to-sale price ratio and a shift to lower median prices. Such changes are typically reflective of a turn from a typical sellers’ market to that of a buyers’ market.”

While the MLS does not cover all real estate sales and market activity, since BREA has not made membership mandatory, all the large and major firms - along with all their agents - are both members and participants. As a result, Mr Morley said “there’s more than sufficient data, especially in the quarterly reports, to justify the accuracy of what these statistics are telling us”.

Confident that the MLS data gives an accurate picture of what is happening in the real estate market in each of the major five Bahamian islands, he added of the new listings surge: “It’s a replenishment situation, not a depreciation situation. In 2022, yes, the number of sales each quarter was higher than the number of new listings, so it depreciated some of the inventory.

“But, in 2023, in the last two quarters there was definitely replenishment of the industry because more inventory was coming on to the market than actually being sold.” The MLS registered 197 new home listings for New Providence for the three months to end-June 2023, according to Morley Realty’s report, which represented an 44 percent increase on the 137 recorded in the first quarter, but an 885 percent jump on the 20 new listings recorded for the same period in 2022.

As for new vacant land or lot listings, these rose by 8 percent to 96 on New Providence during the 2023 second quarter. This compared to 89 during the first three months of 2023, but was also a 2,300 percent leap on just the four listings recorded during the 2022 second quarter.

Similar new listing trends were seen on other islands. On Grand Bahama, the 45 new home listings recorded on the MLS during the 2023 second quarter represented a 1,025 percent year-over-year rise on the four seen during the same period last year. New vacant land and lot sales were also up 833 percent on the same island year-over-year.

In Exuma, new home and and listings were up year-over-year by 550 percent and 1,950 percent, respectively, for the 2023 second quarter, while for Eleuthera the same percentage increases were 340 percent and 850 percent. The data contrasts sharply with the concerns voiced last week by Matt Sweeting, chief executive at 1oak Bahamas, who told this newspaper that demand for housing was likely to exceed available supply for “conservatively” five years at least.

Mr Sweeting’s comments were largely focused on properties valued at $500,000 or less, which is the segment traditionally populated by Bahamians, given that when he closes the sale of multi-family properties there are typically between five to seven rival purchasers who miss out even though they have submitted competitive bids that often exceed the seller’s asking price.

Mr Morley, meanwhile, while affirming that market demand remains robust, said the new listings surge could reflect sellers hoping to capitalise on what remains of the post-COVID boom by placing new builds or existing properties on the market.

“My prediction going into the remainder of the year is that it’s slowly starting turning into a buyer’s market,” he told Tribune Business. “There’s going to be more inventory for them to select from, so it will increase the average days a property is on the market, will decrease the sales/listing ratio and then start impacting the median price. It will come down because there is more and more inventory, which means there is more and more competition.”

The sales/listing ratio compares the price a property sells for with the value it was originally listed at. Mr Morley said he particularly tracks this, as well as the number of days a property stays on the market, as both indicators provide a good gauge of the supply and demand factors impacting Bahamian real estate.

The new listings rise over the past six-seven months seemingly marks a significant shift from the demand-driven post-COVID Bahamian real estate surge. “In 2021 and the second half of 2022, it was a bonkers market,” Mr Morley told this newspaper. “It was a crazy market that nobody expected to continue on. Everybody’s dream would have been for it to continue, but all good things must come to an end at some point, and all these statistics show that.

“Was it pent-up demand from COVID? It’s possible it could have been. For whatever reason, the market was in a tremendous situation in 2021 and the first half of 2022. The market is returning back to a sense of normality, and to do that it has to do some right-sizing with new inventory coming back on.” He added that some of the new listings could be new builds constructed during the post-COVID boom by developers and others seeking to exploit a booming market.

Morley Realty, in its analysis of the MLS data for the 2023 second quarter, said: “The listing-to-sale price ratio remained consistent across most of the island markets. The median prices of home sales across all the island markets proved to be higher than in the last quarter and across almost all the island markets year-on-year.

“The median prices of land sales across almost all the island markets were higher than in the last quarter and almost 50/50 across the island markets year-on-year. When comparing prices (average and median), the median price is usually the preferred gauge over the average price as it measures the middle of the market and is not usually influenced or impacted by any high-end and low-end sales during the period in comparison to calculating the average price.”

As for days on the market, the firm added: “Days on the market for home sales during the 2023 second quarter decreased in Abaco, Eleuthera, Grand Bahama and New Providence from both the 2023 first quarter and year-on-year, while days on the market for home sales in Exuma increased from the 2023 first quarter and year-on-year.

“Days on the market for land sales during the 2023 second quarter increased in Abaco and New Providence over the last quarter and decreased in Eleuthera and Exuma. Year-on-year, land sales in Abaco, Exuma and New Providence have increased while land sales year-on-year in Eleuthera have decreased. Grand Bahama was excluded from this analysis as it had no completed land sales in the 2023 second quarter.”