A boutique real estate firm is stepping out, carving a specialty niche for itself in the mid-range residential market, serving Bahamians stepping up, shopping for and buying their second home and giving a new meaning to the term second home ownership.
“We are so accustomed to the term second homeowner meaning someone from abroad who buys a second home in The Bahamas while maintaining a primary residence elsewhere that for too long we have overlooked the Bahamian graduating from a first home to their second home that could be a primary residence or a getaway or investment property in a Family Island,” said Rachel Pinder, managing partner and broker at Island Living Real Estate.
Pinder says Island Living Real Estate, headquartered in a lovingly restored historic building on East Bay Street, is turning its attention to that buyer in the mid-price range from the $400,000’s to about $1.2 million.
“The reality is that most people who are searching for a home, including the person or family who is more established and ready to move up from their first to their second home, are interested in a range that is roughly half a million dollars up to about $1 million,” she said.
“And there are a lot of listings in that price range, but they often remain on the market longer than starter homes or exclusive properties for a few reasons.” One of those reasons, she believes, is that real estate professionals know it is harder to work that segment, something she says does not worry Island Living. “Financing is harder, it often takes longer. It is often hard to get financing in that range, even though the bulk of sales are to people moving up, people who have proved themselves, established a good credit record, are a little more comfortable now and ready for something larger or with more amenities.”
She notes there are also no governmental financial incentives to encourage purchase of a second or more expensive home, something she believes could be linked to a ‘graduating home ownership tax incentive.
“Incentives really work,” Pinder said. “We saw how the first time homeowner stamp tax exemption drove sales. But there is nothing for the family ready to move up – those people who have demonstrated financial responsibility and are considering investing more, whether for a primary residence or an investment property for the future, the true Bahamian second home owner. Island Living believes there are many incentives that could be considered – among them a three-year property tax forgiveness or a one-time stamp tax exemption.”
“More attention by real estate professionals, more respect from lenders and a financial incentive by government could spark major economic activity in the housing market, including new construction,” she believes. “Look at the trends. In the 1980’s, 90’s and early 2000’s, construction of new homes was at an all-time high. When the economic collapse that began with the fall of Lehman Bros. in late 2008 occurred, mortgage money all but dried up. For many who wanted to own their first home, financial incentives by government and in-house financing by developers-turned-lenders made it possible.”
That combination and the activity it generated, she suggests, attracted a drove of eager young real estate agents.
“It was a brand new, exploding market and many professionals, particularly those who were young or relatively new to the industry, identified with it and were all over it. Everywhere you went people were talking about first time ownership and starter homes. Condo after condo went up to satisfy the thirst for products that would come in under the $500,000 ceiling to take advantage of the first time homeowner stamp tax exemption that applied to such purchases all costs in, including the financing.”
At the other end of the market, highly seasoned real estate professionals were focusing on luxury properties with offerings that at times seemed like bargain prices because of the economic climate. Top brokers were turning over sales in multimillion dollar residences in Ocean Estates, at The Reef on Paradise Island, in the gated communities of Albany, Old Fort Bay and Lyford Cay. Island Living knew its niche lay elsewhere.
“We made a conscious decision to focus on the mid-range market, a lot of properties on Cable Beach, the new offerings in Palm Cay, homes and lots in Port New Providence and Treasure Cove, some in Love Beach and increasingly on the south coast of the island which has tremendous growth potential,” said Pinder. “That mid-range home whether single family, townhome or condo is the fulfilment of dreams for many and that is why family-oriented communities are doing so well. But we believe they can do even better with a financial incentive and greater lending cooperation in that range. Home ownership generates ongoing economic activity with benefits to the overall Bahamian economy. But it also allows people’s dreams to come true and that is something that is the greatest reward for every agent in this business who knows that inner reward of the day you hand the keys to a new home to someone and see the look on their face and the excitement in their eyes.”
Island Living Real Estate is stepping out for those stepping up, calling for three changes that will generate new construction and increase sales of existing homes. Pictured (l-r) at Starfish Isle at Palm Cay are Gina Knowles estate agent and Rachel Pinder, managing partner and broker at Island Living Real Estate. (Photo by Derek Smith Jr. for DPA.)
