The Market State
- April 1st, 2008
- in Yachting
A million, two million… hefty price tags for realty properties on a Caribbean island. When you take a look at the properties we review on a regular basis, there is a seldom one below this mark, which begs the question: who is buying them? According to Caribbean Realty’s director, Maritha Kiel, “Not many people per se; this is a high-income bracket and most of these homes, if purchased from buyers overseas, will serve as a second home.”
So if paradise can be bought, what factors influence the price? Current economic indicators point to a downturn in the US economy, potentially triggering a recession. Although this is what is being reported, what is the reality? Although the majority of us may not be in the market to buy a million-dollar home, all property evaluations follow the same basic formula. The price of a home’s construction, its replacement and its surrounding property value, based on sales and similar features, all help determine the overall asking price. Once that has been established, the precedent is set and we may be looking at an overly competitive market in terms of realty pricing. Whether or not the world market will allow for the influx of new property owners remains to be seen.
Houses are being built all over the British Virgin Islands. Those already constructed are not abandoned by any means; they are enjoyed to their fullest potential until their day of sale. The proof of whether or not a property market is working within its price range is ultimately reflected in its volume of sales. In actual fact, not many houses are being built to sell. They are mostly dream homes, built to be lived in and nurtured and sold off at a later stage for various reasons.
In reality, whether or not we enter into a recession will be affected by daily markets and not the purchasers of million-dollar homes. They are at the elite end of the scale. As we enter into the coming months we will be preparing articles not so much with the theme of “are you ready to buy?” but rather, “are you ready to sell?” along with advice and instructions on how to put your house on the market.