James Bovell, Property Persepctive

In a market that is currently seeing a great deal of activity, the sale pricing of US$2 million and above private homes or condominiums predominantly in the Seven Mile Beach corridor (West Bay to north George Town), is one that I would like to concentrate on in this update.

In particular, I want to focus on the movement between the list price of such high-end homes and the actual sale price, because, more often than not, the movement between the two is quite substantial. And to clarify, I am not talking about the final list price, but at the price the property was initially listed.

What I have noticed is that it is not unusual for homes of this ilk to sell 10 to 20 percent below the current list price. In turn, in many cases the current list price will have been previously reduced. This means that the market is stating clearly what it sees as value. In realistic terms, it seems that buyers understand the market and know what price they are prepared to pay.

Get real with pricing

As a result, my recommendation to sellers is that, to save time spent on re-marketing, re-advertising and refreshing their property when their property does not sell, they should be guided to placing a realistic price on their property at the initial point of listing. The price at which a property comes to market needs to be reflective of what the market is prepared to bear, otherwise time will be wasted.

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I also believe that overpricing a property is a disservice to the owners as they can miss out on real qualified buyers.

Vendors need to appreciate that the most excitement that is generated with regard to a property that is for sale is at the period of initial listing, when it first goes to market. As a result, the vendor really needs to fully capitalize on this. Otherwise, pricing a property too high runs the risk of deterring people who might otherwise be able to afford it, which means the vendor immediately misses out on possible quality buyers.

Don’t get left behind

We are currently living through an extremely active period in real estate movement, especially in certain sectors of the market such as the Seven Mile Beach corridor, and will continue to do so for the foreseeable future. I believe it has the potential to continue at this pace into the mid and long term.

There are many converging factors that are guiding my predictions. Investment activity in redevelopment is strong, as is our financial services industry, while our tourism industry seems to be growing in leaps and bounds.

This means that all eyes are looking at Cayman, so, for sellers, it is very important that they question whether they are pricing their property realistically. You do not want to lose out by pricing yourself out of the market when first listing. One thing is for sure – the market will not wait for you.

James Bovell is broker/owner at RE/MAX Cayman Islands.

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  1. Great column this time. It’s realistic, plain talk — basic advice you’d think would be obvious, but apparently isn’t. I’ve constantly asked myself over the years, “Why don’t realtors automatically say this to their clients???” After all, there are many listings on CIREBA that seem to sit there forever. Maybe some sellers reason that they’ll just wait till they eventually get their price. But they forget that TIME IS MONEY — so they aren’t likely to come out ahead by waiting for a psychological victory. Anyone who’s in the market should heed the advice in this column.

    • Good question Mark. Realtors DO tell their clients this. Who reply that Mr. XXX said I could get more. So they list with Mr. XXX who knows the house won’t sell at that price. Then 6 months later he’ll suggest a price reduction as the market has gone down.

  2. I find it interesting that your advice is directed to “sellers” to make sure they set correct pricing. But this advice should be given to Realtors…as we all know it is the Realtors that direct list prices. I have been in numerous open houses and viewed many properties where I believed the list price was way to high and not realistic and being told by the listing agent how he/she is certain the price is the right price and the property will sell quickly. My response is …”you are right, if this was 2022..the property is priced to sell in 4 years, not today”. And of course all the properties in question linger unsold for months on end and then eventually reduce their prices. It is the Realtors that drive price setting for listed properties and in my view, on this Island, most do a terrible job, likely driven by their own needs…as higher prices mean higher commissions.

  3. The next crash could come from anywhere: A trade war, spiraling inflation, an environmental crisis that sullies the beaches that lure tourists.
    Already, the SWFL region is panicking over toxic algae blooms in Lake Okeechobee that are being released into the oceans, threatening beaches with green slime and the smell of dead fish.
    In Cayman the next crash could come from the Dump, Cayman’s ticking environmental time bomb and dilapidated and overburdened sewer system.

    • Don’t get left behind? I’d say count your blessings if you didn’t purchase a multimillion dollar property in Grand Cayman yet.
      Someone who thinks that Grand Cayman is immune to environmental catastrophe similar to what is happening in SWFL now, is naive.
      It won’t come from red blue algae, you have a monster of a different kind. And you wouldn’t know what to do with it. At least the USA has money and brains to deal with catastrophies.
      You already drowning in sublethal doses of man made poisons, you just don’t know about it. Soon to come a “second hand-chemo” laced coffee and traces of dioxin on your sandwich. Sublethal doses have cumulative effect by the way.
      Am I a scaremonger? Don’t think so. Just look at your cancer statistics and general health, including mental, of the Cayman population.