Can Real Estate Survive in the
by Penny Dickerson
(as published in consumerhomevalue.com Dec. 2, 2019)
It’s your honeymoon on Paradise Island. In a nearby cay, two millennials snorkel beneath the clear blue sea while an elderly couple awaits the day’s sunset while relaxing on a pristine, sandy white beach. This is the Bahamas. Open any travel brochure and potential tourists will marvel at the 700-plus islands and inlets of the Atlantic Ocean that comprise one of the richest countries in the Americas, preceded only by the United States and Canada. The Bahama Islands further boast an economy driven by tourism and offshore finance.
The Island of the Bahamas is a desired vacation destination, but it, too, is a real estate mecca for second-home buyers seeking a deal. While the September 2019, Category 5, Hurricane Dorian was the worst hurricane to hit the Bahamas, Real estate markets in both Nassau and Grand Bahama will continue to thrive as a plethora of locals and foreign investors will be seeking to buy and sell homes and condos.
My high school classmate from Jacksonville, Florida, Rick Singletary, recently relocated to the Commonwealth of the Bahamas in June to engage in contract work for the Department of the Defense (DOD). My first response following “Congrats!” was this frantic inquiry:
“Wait, wasn’t the Bahamas recently flattened in September 2019 by Hurricane Dorian?”
Much to my surprise, Rick explained that the area where he is located, Andros Town, was spared any and all damage from the devastating storm. After breathing a sigh of relief, my journalistic instincts immediately kicked in. Stateside media reports were apparently elusive, and if I were led to believe the Bahamas had been banished from planet earth, what must the rest of the world be thinking?
Second Home Real Estate Mecca
Without question, The Island of the Bahamas is a desired vacation destination, but it, too, is a real estate mecca for second-home buyers seeking a deal. For this reason and more, Engel & Völkers expanded into The Bahamas in 2017 and opened its third shop in the Caribbean. Engel & Völkers Bahamas is a result of a union with Bahamas Waterfront Properties, designed to provide services to buyers and sellers of properties in Nassau/Paradise Island, Abaco Cays, The Exumas, and Eleuthera/Harbor Island.
“The decision to become part of Engel & Völkers was easy,” says Chris Plummer, co-founder of Abaco Cays Realty. “My family has been involved in building The Bahamas real estate market for three generations, and our investment in Engel & Völkers is an investment in the future of real estate here.”
Plummer added the following:
“Working as part of an internationally recognized network will bring maximum exposure to our listings and help secure only the most qualified, quality leads, listing clients and buyers. It’s time to bring Bahamian realty into the 21st century, and Engel & Völkers is the clear partner to do just that.”
Hurricane Season Bahamas 2019
Those were lofty words to live by until “Hurricane Dorian struck the Abaco Islands as a Category 5 hurricane on September 1.
A day later, Dorian hit Grand Bahama Island in the same category. The hurricane then stalled over Grand Bahama for another day, finally pulling away from the island on September 3.
Damage was estimated at over US$7 billion, and there were at least 65 deaths in the country. Another 282 people were left missing after the hurricane.”
This was indeed the worst hurricane to hit the Bahamas.
Consumerhomevalue.com would never underscore the apparent devastation of a death toll that significantly rose in the days following the disaster along with thousands of residents being displaced, power outages, and a global humanitarian effort to shelter, feed, and clothe survivors. An aerial view of the damage shows homes and businesses flattened beyond repair and all commercial, government, and civilian operations of normalcy came to a screeching halt on the ecological oasis that expanded over 100,000 square miles of ocean and a population of more than 394,000.
A bonafide curious creature, I commenced to research the latter and much to my own chagrin identified an array of intriguing reports. Some of the nation’s best media outlets offered the necessary, fact-based reports following Hurricane Dorian but also available were choice real estate narratives that ran the gamut. Consumerhomevalue.com seeks to apprise and inform you by sharing some of the most poignant, industry-related reports from the storm’s aftermath.
Call it an “Act of God” or an unfortunate national disaster, but in either case, Hurricane Dorian was a Bahamas real estate investors worst nightmare. Or was it?
Homes for Sale in Bahamas Cheap
Certainly, if your home made it through the storm without too much damage that is a huge sales point for the viability of that home. In addition, many homes (not all) have hurricane insurance and once the owners have their relief funds they may decide that they don’t want to go through the re-building process and they can then opt to sell their home as is at a greatly reduced price, which is good for both buyer and seller.”
Rental Market & Investors
Christie further stated that while homes in Abaco and Grand Bahama have been ravished, the real estate markets in both Nassau and Grand Bahama will continue to thrive as a plethora of buyers will be seeking to rend and purchase homes and condos.
“In Grand Bahama, many people are looking to rent homes that did not get flooded more towards the south of the island. The rental market that was on the slow side before the storm will certainly now improve and people will migrate more south on the island and thus pushing the prices up for both sales and rentals. We have had an unprecedented amount of evacuees, some from Abaco, to Nassau and they all need to live somewhere. Everyone that can afford to rent is finding a home or condo which in turn will help to drive rentals, and thus the sales market as people like to buy solid income real estate.”
Following Hurricane Maria in 2017, the islands of Puerto Rico, Barbuda, and St. Maarten became targets for investors. According to the Wall Street Journal, a five-bedroom home with an ocean view was on the market for $3.5 million before the storm but was reduced to about $1.9 million in damaged condition after the storm passed through.
I am a journalist, not a real estate expert, but even my own sketchy math can configure the aforementioned to equate to “depreciation.” There is clearly a wealth disparity in the Caribbean islands that invite investors who blink millions in their sleep and eat caviar for breakfast, but a polarity also exists between the middle class and the impoverished.
Relief for Homeowners
Despite available deals, not every homeowner affected by Hurricane Dorian is poised to buy, rent, or rebuild. The New York Times offered the following poignant example in a feature dated, September 1, 2019:
In Lady Lake, a ravaged neighborhood near Freeport, Grand Bahama’s largest city, the yard of Nicole Sweeting-Bain’s gutted, one-story home was littered with the shredded remnants of what had been inside. A large Bahamanian flag was the only recognizable object. Whether to salvage and rebuild was the last thing on her mind.
“I don’t even care about the house,” she said, scrambling through the rubble in an attempt to find anything still intact. “My kids don’t have underwear.”
In the interim of a decision, Sweeting-Bain can find solace in the aid of national disaster assistance from Fannie Mae and Freddie Mac. The GSE’s offered homeowners up to 90 days of mortgage forbearance. This along with delinquencies will not be reported to the credit bureaus.
In an interview with HousingWire.com, Fannie Mae Vice President for Housing Access, Disaster Response, and Rebuild, Michael Hernandez said that up to 12 months of mortgage forbearance will be tacked on to the end of a mortgage, so homeowners can focus on spending money on rebuilding their homes.
“One out of every three mortgages is financed by Fannie Mae and most markets are impacted by any type of natural disaster – earthquake, fire, flood, hurricane – Fannie Mae’s got a significant interest in helping those borrowers, and help those communities recover as quickly as possible, said Hernandez who reiterated the following:
“Our focus is, how do we get borrowers and the communities back on their feet as quickly as possible, back on their own or rebuilding their homes so that they can continue to preserve that community.”
Consumerhomevalue.com echoes these sentiments and looks forward to the Island of the Bahamas returning to its prosperous state of humanity’s well-being, progressive tourism, and a Bahamas real estate market that thrives.
Penny Dickerson is a journalist who recently returned from an Africa sojourn. Her editorial focus is human interest, healthcare, arts & culture. She is a recipient of multiple journalism fellowships including H.F. Guggenheim, The Marguerite Casey Foundation, The Gerontology Association and is a 2019 Association of Healthcare Journalists Ethnic Media Fellow. Her portfolio can be viewed at pennydickersonwrites.com.