April 12, 2012
Properties that are added to The Bahamas Real Estate Association's (BREA) Multiple Listings System (MLS) are not indicative of how the country's real estate market is progressing overall, according to a local realtor.
Ryan Knowles, an estate agent and associate appraiser at H.G. Christie Limited, told Guardian Business that the MLS is fairly accurate in its pricing information, but it shouldn't be taken at face value because some of those numbers could be misleading.
He noted that the MLS represents a small portion of real estate sales throughout The Bahamas.
"The MLS probably only represents about 20-25 percent of all transactions in the market at any given time, unlike the United States and Canada where more than 90 percent of listings are on the MLS," Knowles said.
"The MLS is fairly new to The Bahamas so people are still getting used to it. So it doesn't really reflect, in my opinion, overall market activity."
The comments come after one realtor claimed to another media outlet that he was averaging 80 percent of market value on sales over the last few months.
"Market value is the most probable price that a property will sell for in the market when exposed for a reasonable amount of time," Knowles explained. "So to say that a property is being sold for 80 percent of its market value doesn't really make any sense because whatever it is sold for is in fact the market value."
Monica Knowles, a sales agent at Bahamas Realty, agreed with her H.G. Christie counterpart, noting that MLS has its benefit, but also highlighted a flaw with the system.
"I believe the MLS is an invaluable tool and resource. By looking into the MLS data, we can advise sellers if they want to sell their properties and what comparisons we have to evaluate these properties," she noted.
"Usually if a property sits for an extended period of time in a market, it's overpriced. The MLS is really good when people are looking at prices. I don't necessarily agree that homes are selling at 80 percent of the value. I think in order to determine a property's value, it's best to use a BREA licensed appraiser who can give you different methods of valuation."
If done through the proper channels, she said those in the industry find the properties will be sold at the appraised value or extremely close to it. If you overprice the home and put in the MLS, then you will see it sit there. Homes get the most attention within the first few weeks of being in the market, she added.
Knowles noted that it is a property's value and its selling price is based on the market.
"So if you list a house at $500,000 because you think that's the market value and it ends up selling for $400,000 that means that the market has told you that hey that the house wasn't worth what you thought it was," Ryan Knowles added.
While information posted on BREA-regulated MLS is fairly reliable in relation to pricing, he is calling for the system to become more stringent as to avoid inaccuracy.
He continued: "It's not fail proof. I think the MLS could have a better system in place to ensure that the information that is posted is accurate and people are not fudging the numbers."
Overall, Knowles from H.G. Christie believes that the real estate market is starting to get healthy.
"Rentals are differently strong. I think overall the market is not where it used to be but we are beginning to experience an upswing since February. People are out there buying, deals are going down but it is not as easy as it was a few years ago," he revealed.
In the meantime, Monica Knowles further noted that The Bahamas' real estate industry is still in a recessionary market.
"In the real estate industry, we are still in a recessionary market so sale prices are flat. It would be considered a buyer's market and one that is very competitive. However, there are still people buying and renting," she added.
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