Month: March 2022

Cayman First Quarter Real Estate Review

Posted on March 31, 2022 by - Buyer, Investing, Seller, Seven Mile Beach, Tips, Trends

These continue to be record times for the Cayman Islands real estate market. Never have we seen this consistent level of demand, spurred by unparalleled lows in housing supply. Properties are being sold quicker than ever, and the number of sales continue to rise month after month.

First Quarter Rebound

The third and fourth quarters of 2021 marked the first time since the start of the pandemic that the Cayman real estate market saw a momentary decrease in the number of sales. You can read more about it here: Cayman Real Estate Fourth Quarter. But as projected, the dip was short-lived.

The market rebounded in a significant way over the first quarter of 2022. There were many contributing factors the most notable of which is the return of tourism. Airlines like American, Delta, United, Southwest Jet Blue and more have resumed regular flights to Grand Cayman. We also welcomed back cruise ships in late March. This increase in air and cruise travel has been accompanied by the easing of COVID-19 testing and restrictions. In short, visitors have resumed travelling to The Cayman Islands in great numbers, and with them comes an economic boost in the market. We are back and ready to cater to the demand.

Increased Consumer Confidence and Demand

The resurgent of activity boosts consumer confidence. Rentals are up and this feeds potential investors, both locally and internationally as they consider safety and security in their investments.

In my 2022 Real Estate Market Forecast I stated that Cayman’s market would return to form, lamenting the record lows in listing count we saw before the third quarter of 2021 and sellers realizing new levels of returns. And this is exactly what has happened and continues to happen.

There were 653 active/available listings as of the 21st of March this year. That’s a 4.1% decrease from the end of the fourth quarter of last year. To put it in better perspective, that’s a nearly 22% decrease compared to the 20th of September 2021, when there were 833 active listings.

The median number of active listings has steadily declined every month since May 2020 and the current number of active listings is the second-lowest recorded by The Cayman Islands Real Estate Broker’s Association over that same period. Long story short, supply continues to be down, and demand continues to be up.

Cayman First Quarter Real Estate Sales

We are seeing continued growth in both completed sales and pending/conditional sales. In fact, we’ve seen steady growth in both of those categories since May 2020. A growth that has now accelerated through the first quarter of the year.

There were 87 properties under sales contracts on 28 March of this year. The total was 25 through the fourth quarter of 2021 which means we’ve seen growth at a clip of nearly 248% over the last three months. Not to mention, that we have also seen a further, nearly 5%, increase in completed sales this quarter compared to last quarter.

Market Speed

The surge in demand means properties are selling quickly when they go to market.

If you’re a potential seller, now may be the right time for you to think about moving your property as that demand is resulting in increased property values and sales prices.

Potential buyers, on the other hand, my advice is, to be prepared to move quickly. Decision paralysis is a real thing, especially in the current real estate climate. (One of our agents, Kate Ryley, even wrote a blog about real estate paralysis to help buyers avoid indecision. Check it out: https://www.propertycayman.com/blog/how-to-avoid-real-estate-decision-paralysis/.) Hesitation in this market is not really an option. In certain sectors of the market, properties are being sold within days. But rest assured, we have great advice and market insights to help you as it relates to your specific property plan and the sector you may be considering.

Cayman First Quarter Real Estate Trends

A good chunk of the increase in activity we’re seeing is coming in the market’s high-end sectors, including South Sound, Cayman Kai and of course the ever-steady Seven Mile Beach corridor.

Short-term rentals and bookings have returned with the opening of the borders so a lot of the growth is happening in the condominium sector. Whereas, in the second half of last year, the stand-alone residential homes sector was leading the charge. And while there is a mixture in the current motivation behind buying. We are also seeing a mix of who is buying. It’s not just non-residents looking to enter the market, residents are recognizing the imminent potential in real estate and deciding to invest in rental properties knowing they could also serve as a potential home if needed.

Cayman Real Estate is a Great Investment

Real estate is a long-term stable asset. It generally does not ebb and flow in step with the capital markets. And the Cayman Islands real estate market in particular remains a strong investment option. I say this for several reasons. We’ve already discussed the data – increasing sales, increasing demand, increasing value, limited supply – as well as the return of tourism to our islands serving as a catalyst for Cayman’s first-quarter market resurgence. But when you look at what else is happening in other areas of the world, be it geopolitical turmoil, humanitarian crises, economic instability, the Cayman Islands is a safe harbour. Truly.

Cayman is a mature jurisdiction with robust, globally recognized industries and professionals. For this reason, we can confidently project solid returns and growth of your investment over the course of time. Our strong real estate market will continue. No matter what level of your investment, or whether you have invested or soon will, you can expect to reap a healthy return — while enjoying these incredibly beautiful islands and its people at the same time.

I love to talk about real estate, and I love this island. So, if you have questions about the market or investing in real estate, reach out. Let’s chat.

(Source: CIREBA. Please note that this is a broad analysis of the overall market. Please reach out for a more bespoke detailed report tailored to your personal property journey).

Three ways to own residential property in Cayman

Posted on March 26, 2022 by - Buyer, Investing, Tips

Own residential property in Cayman - Kate Ryley Property Cayman

There are three main ways to invest in residential property in Cayman.

  1. Purchase an existing home
  2. Buy a pre-construction property
  3. Buy land and build a new home

Not sure which is the best fit for you? Each approach is very different, with unique benefits and requirements. And the right decision for your property journey comes down to your timeline and investment purpose or goal.

Purchasing an existing property in Cayman

Benefits

Time: The biggest benefit to purchasing an existing home is convenience. You can move in right away. And typically, the home is already furnished. Buying an existing property is the fastest way to obtain residential property in Cayman. You get the keys and go! Perfect for buyers who don’t have time to wait and are not interested in renting or for those looking to obtain residency status via real estate investment.

Final Product: You know exactly what you are getting. You can tour the home before putting in an offer. And what’s more your offer can be contingent on inspection.

Cost: You know the cost. Unlike other property investment options, the price tag is clear and upfront. The purchase price plus stamp duty and closing costs. Nothing else, nothing hidden or unforeseen.

Location: It’s generally easier to get into the neighbourhood you’re seeking, especially if you’re looking for a single-family home. Most pre-con builds are condominiums, and there aren’t too many empty parcels of land remaining around the most in-demand communities of Grand Cayman. So all you have to do is keep an eye on the market. But really, that is what a good agent is for.

Resale: An existing home will likely sell faster than a pre-construction home. I feel this is important to note as Cayman is comprised of nearly 50-60% expatriate workers, and not every developer will allow assignment sales of a pre-construction property. (Although a good agent will ensure there is a clause allowing you to do so for market value or higher.)

Potential Drawbacks

Home Condition: It seems obvious, but an existing home will not be new. You’ll need to ensure it meets current planning and safety requirements. You’ll want to check whether it has hurricane-rated windows and doors. Is the A/C working properly? You really have to do your homework to check on the home’s health. And what’s more, you might need to consider the idea of purchasing a home that may require repairs or even a renovation.

Perfect Fit: An existing home likely will not be exactly what you want. Maybe you would’ve preferred a bigger master bedroom or more bathrooms. Some things you can change but others, such as the overall floor plan, you can’t.

Purchasing a pre-construction home in Cayman

Benefits

New: You’re getting something brand new. No one else has ever lived in it. There is no wear and tear, and everything is in excellent condition, including the chattels.

Ease of Building: The developer handles the construction and the headaches that come with sourcing materials, planning, labour, etc. Purchasing a pre-construction property allows you to get a new home without being heavily involved in the day to day happenings. You pay the deposit, and off you go until the completion date.

Affordable Deposit Structure: The deposit structure for pre-construction homes is typically very favourable for the buyer. In Cayman, it’s usually 10-20% down and nothing more until completion. This allows you to save money throughout the entire construction process, so you have more cash upfront at the time of closing.

Property Investment: Pre-construction homes are an excellent residential property investment in Cayman, even before construction completion. This is because of the strength of the island’s housing market. For example, if you buy into a development before groundbreaking and the market value continues to rise (in the past 5-10 years, prices on average have doubled in Cayman), then your pre-construction property will be worth more than you paid for it, even before construction is completed.

Potential Drawbacks

Customization Limitations: Generally speaking, options are limited when it comes to floor plans and furnishings. You might have a handful of floorplans to choose from and a few options for furnishing customizations such as floors, countertops, backsplash, etc., but often there isn’t a lot of wiggle room.

Timeline: With pre-construction properties, you are at the mercy of the developer and construction team to finish the development on time. They will provide an estimated date of completion, but there are no guarantees.

Property Type: Most pre-construction properties are condos or townhomes. If you’re in the market for a single-family, standalone home, save for the rare outliers, there typically is not any inventory for you to choose from.

Purchase land and build a home

Benefits

Cost: Buying land and building could be your least expensive option to obtain residential property in Cayman. Surprised? Let’s do the math. You buy a 0.3-acre land parcel in Governor’s Harbour for $800,000. You build a 4,000 square-foot home at the average rate of $500 per square foot. Your construction cost is $2 million. This makes your total property cost $2.8 million. Right now, you can not purchase a comparable home in Governor’s Harbour for less than $3 million.

Custom: You get exactly what you want. You can create your own floor plans, choose the furnishings, design the exterior – everything will be precisely to your liking.

Potential Drawbacks

Budget: Every step in the process will cost you money. You’ll need an architect, designer, planning permission, etc., making it difficult to know your final cost going into the project. In addition, costs can change throughout the project. If your build takes two years, and the cost of construction materials increases over that time, your final construction cost will be more expensive than you originally budgeted.

Timeline: External circumstances can create significant unforeseen setbacks. The pandemic caused worldwide shipping delays and material and labour shortages, all of which affected the timeline (and cost) of individual construction projects and larger developments.

Location: It might be tough to find an empty parcel of land in the area you want. In popular places like Governor’s Harbour, for example, there simply are not many land lots left to build on. Meaning you might end up paying a premium or having to purchase in an alternative location.

Labour Intensive: Building your own home is a very hands-on endeavour. It involves the coordination of vendors and materials. You’re the one in charge of making sure construction is moving along at an acceptable pace and being done to spec. It is time-consuming and can be pretty stressful at times.

Investing in Residential Property in Cayman

Residential real estate on the island has roughly doubled in value in the last decade. What’s more, we remain in a strong seller’s market, making the purchase or building of a residential property in Cayman a smart investment.

Please reach out to me if you have any questions or want to delve more into any of these topics. I’m here to help you through your unique property journey.

A guide to selling your home in Cayman

Posted on March 17, 2022 by - Seller, Tips

Considering selling your home? A lot happens between deciding to put your house on the market to finalizing the sale. There are multiple moving parts and things to consider, from getting your home listed to vetting offers and negotiating terms, to accepting an offer and closing the deal. Right down to completing the property transfer. So what is the process of selling your home in Cayman really like? Let’s take a look.

Starting the process of selling your home

When you’ve decided you are selling your home, you’ll want to reach out to a CIREBA member agency. Real estate agents have resources available to them the public does not, such as current market data. We know what other properties in your area have sold for, the condition of the homes, and even how short or long they were on the market for. This all goes a long way in accurately determining how to price your home to sell.

Of course, you can choose to sell your home without an agent. However, in my experience, the majority of for sale by owners end up listing with an agent. This is often because of the stress of arranging showings and dealing with numerous inquiries, or in contrast, the home receives little to no interest because of a lack of marketing.

You may have concerns about sales commission (which the seller pays and varies from about 5-7% depending on the sale price). That’s completely understandable. But it is important to note that Sellers who don’t engage an agent on average net 23% less for their home. I have seen this personally. A couple I know initially set out to sell on their own. After chatting through the obstacles they were facing, they let me represent them. And together, we were able to sell the property for approximately $50,000 more than they were initially hoping for. In short, agents save you time, reduce your stress, and ensure you get the most for your home. It’s a win-win.

Finding the right Cayman real estate agent

When it comes to selecting your real estate agent, there should be mutual trust and a feeling of honesty. A good agent will focus on doing what’s best for you and your family. Our purpose is to support you in your long-term property journey, helping you make smart investments, not just for today’s sale.

Among many other questions, your agent should ask you:

  1. How quickly do you want or need to sell your home? and why? What is your motivation to sell?
  2. What do you think is the market value of your home? and why?
  3. How much did you buy your home for, and how much equity have you put into it?
  4. What sale price would you be comfortable receiving for your home?
  5. Do you have a mortgage on your current home? What currency is it in?
  6. What is your long-term property plan? Where will you be moving to?

How to price your home for sale?

There are many factors to consider when establishing the price of your home. To begin the process, your agent should provide you with sale statistics of similar properties that have recently sold in your area. This information will help establish a starting point for the listing price. Your agent should then consider your timeline to sell, any home upgrades or renovations, current market trends, and new developments in the area.

Cayman is currently in a seller’s market, but many personal variables may impact the price you choose to list your home for. For example, if you’re in no rush to sell, your home could be listed at or above comparables. In contrast, we would need to price your home a bit more modestly should your situation requires a quick sale. That being said, if your home is in a high-demand area (think Seven Mile Beach or the Seven Mile corridor, South Sound and, more recently, West Bay), you can likely keep the listing point higher even if you’ve got a shorter timeframe in which to sell.

It comes down to comparables and market trends, coupled with your timeline. And the right agent is integral to helping you navigate these distinctions. They will help you price your home so that you don’t leave money on the table. Set yourself up for success by finding an agent with whom you can have an honest dialogue about these details.

Listing your home for sale in the MLS

At an absolute maximum, we will have your property listed on the CIREBA website within two weeks of when we begin to represent you. And boy, is there a lot going on behind the scenes within those days.  

To start, we will do our due diligence on you, the seller, which is required by law. That means we will gather all the necessary paperwork and information on you so that when the right offer to purchase is received, nothing is standing in your way.

We’ll arrange for a professional photographer to come out and capture high-resolution images of your home. This is one of the areas where our team stands out. We use visuals to highlight your home and attract buyers. We work with top photographers on the island and will never list with cell phone photos. We may also have a professional videographer film your home, create a virtual tour, and map floor plans. In addition, our agents, and our in-house marketing team, write a custom description for each home. These are carefully crafted to reel in buyers after they have seen the home’s visuals. In short, we do everything to ensure your home hits the market as strong as possible.  

Marketing your home

Immediately our team arranges signage to go up outside your home to capture foot traffic. Simultaneously, digital advertising will begin across multiple channels and platforms. The initial traffic within the first two weeks after a new listing hits the CIREBA website is always enormous. But we keep the momentum going after that first wave with open houses and multireed marketing campaigns. It’s another area where our team excels.

Receiving an offer to purchase your home

Your agent will discuss all offers received with you. Depending on the offer to purchase, the seller usually has anywhere from 24 hours to 3 days to accept the buyer’s offer. That is why it is integral that your agent notifies you of any offer to purchase within the same day, absolutely no more than 24 hours after receiving it. A good agent will also walk you through the offer, explaining the conditions and how they would impact you. From there, it’s up to you to choose to accept the offer, counter, or decline. And it is our job as your agent to handle this part of the transaction. To act on your behalf and protect your interests.

Accepting an offer to purchase on your home

When you accept an offer for the purchase of your home, our team will prepare closing conditions. It is important to note that the offer to purchase itself is a contract whereby the seller and buyer agree to move forward with the transaction. Offers to purchase can vary greatly depending on the conditions stipulated in the contract, which will affect the timeframe in which the deal closes.

The most substantial and common processing difference when it comes to selling your home is whether the buyer requires financing or whether they are making a cash offer. Buyers requiring bank financing need to take a few more steps to secure funds. These include but are not limited to; a property valuation, life insurance, completing bank paperwork and due diligence requirements, as well as remitting bank fees. This can take a while. Anywhere from a few weeks to a few months, should there be delays.

Extensions and going back on market

If the buyers are unable to meet the deadlines for the conditions within the timeframe stipulated by the Offer to Purchase, then they can ask for an extension. This is a signed document sent over to your agent. You can then decide if you would like to approve the extension, which allows the buyer to have more time to meet the conditions, or you can choose to come out of contract and go back to market. Because of this, it is very important to be realistic when setting out conditions deadlines within the Offer to Purchase.

Completing the sale of your home

Once all the conditions of the offer to purchase are met your property sale status will move from pending conditional to pending, which means your property is ready for closing. Closing is usually organized between the buyers’ and sellers’ attorneys. At which point, you, as the seller, will sign a series of legal documents indicating the property now belongs to the purchaser. If financing was required, then you and the buyer will also meet with lending officers from the bank so they can prepare a bank draft for you.

And finally, the keys! The vendor’s agent usually provides the keys to the buyer’s agent or the buyers after the property has officially closed and the buyers have the title in hand. Unless agreed beforehand, the property should be vacant at the time of closing. A good agent will always organize a final walkthrough on the day of closing or the day before. A final walkthrough will ensure and document that the buyers are happy with the state of vacancy of the property.

Selling your home in the Cayman Islands

There are many steps involved with selling your home. It can sometimes be confusing and burdensome. That’s why we’re here, to help you through it all and make sure you’re getting the best return on your investment.

Whether you are looking to sell today or ten years from now or simply have questions about the sale process in Cayman. Shoot me an email, and let’s talk. I’m always happy to help.