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2011 - New Year

MARKET REPORT
NEW YEAR 2011 MARKET REPORT AND PROPERTY LISTINGS
AN HONEST APPRAISAL OF THE CAYMAN MARKETPLACE

Review
In the last issue we said that predictions were difficult because our prosperity was tied to events like the US November elections and the generation of spin-off income from our own Capital Projects. We said we expected continued cloudy skies with a clearing trend towards years end. The US elections have come and gone with large gains for the Conservatives. This bodes well for the future but there are lots of battles still to be fought there. And our Capital Projects have never gotten off the ground. So much for a noticeable clearing trend.

General Outlook
Without the Senate or Presidency in the hands of Conservatives the US recovery will be a long one. And without any local projects started we are not going to see lots of local spending. However, there has been a very recent upswing of sales. Why? Well, part of it may be due to people wanting to get out of US Dollars and preferring to do it offshore. But just as likely is that prices have dropped to levels which even the cautious buyer now finds attractive. The number of active listings has increased by 10% but the prices are lower so the dollar volume is actually down 1.5%. The # of properties sold is down 19% from last year and the dollar volume is down 15%. Pending sales for 2011 are down 24% (#'s) - 30% ($ volume). The recent activity mentioned above will not show in the data yet.

Residential
The number of properties sold is down 7% from 2009 but the property value is up 19% over last year. How? Well some of the higher priced homeowners are now accepting lower prices and some of them have now sold. That is evidenced by the bid to ask ratio moving from 91% to 86%. But many prospective buyers will not make a low ball offer for fear of insulting the owner or Realtor. So those who actually indicate motivation by reducing their prices are usually the first to receive offers.

Condos
6.5% fewer condos were sold this year relative to last and the average price is 9% lower. But that is still not enough which is evidenced by the 10% increase in marketing time over last year. The best low level deal we see is a 2 bed/1 bath Glidden Lane unit at CI$147,500 (less 7.5% rebate). In the mid market it would be a sea view 2 bed/2 bath Bonnie's Arch unit at CI$219,000. In the luxury level a 4 bed & Den /4 bath beachfront corner Mandalay at US$3.2M has got to be the best deal around.

There are retail offerings in many developments which are drastically reduced, and remember, most of these units were completely redone in 2005. If you are in the market for a 7 Mile Beach Apartment, there may never be a better opportunity for you to partake in the buyers market than this coming season, so don't procrastinate too long.

There are 2 new condominium developments on the West Side/7-Mile Beach attracting attention: Watercolours and Oceana. Both are amazing.

Watercolours is off and running now and ground breaking took place a few months back. Now with 9 stories and the massive amount of engineering below ground now completed, this new luxury complex is approaching the first floor level at this time. The exciting news is, all the units are now 3 bed plus a media room, 3 1/2 bath of approx. 3600 square feet and being offered beginning at as low as US$2.7M and ranging to US$4.5M, depending on location. These are unbelievably attractive prices per square foot compared to other existing offerings. Once again Fraser Wellon and his team will be setting standards never seen before with luxurious amenities. The building will also meet or exceed all the latest hurricane protection standards. No doubt, this will be an upgrade over his most recent Water's Edge, which is currently the finest condominium property on 7 Mile Beach. Prices are sure to appreciate, so call us for availability and your opportunity to own in the very best complex Cayman has to offer.

Oceana will be located on South Church Street in George Town, just as you leave town and will be a 15 unit complex of 3 bed, 3 bath units starting at US$1.6M. These are being built by the same development team who did the Seaview Residences which have been critically acclaimed for both their unique style and strength of construction. The Developer of Oceana has just completed his first pre-construction offerings which have been fully absorbed resulting in 6 units being sold. This contemporary complex will provide a great alternative for those wanting to be on the water in the heart of George Town. Call us for information and availablity on this wonderful project, within walking distance of downtown.

Commercial/Industrial
With the upcoming opening of the new Government Office Building which is over 200,000 sq. ft. There will be more vacant space in other locations so we don't see Commercial rates going up in the near term, (regardless of what they are charging at Camana Bay). The best return we have seen lately is on the WCML Industrial Warehouses. These are cement block and steel buildings with a lovely modern design which are now condominiumized with 5 spaces around 2,900 sq. ft. (includes mezzanine) now selling for CI$299,500. That would provide a 9% ROI for an investor owner based on only CI$15/sq. ft. leases.

Raw Land
The best raw land parcel for sale is a Heavy Industrial 1.35 acre on the By Pass which has just been drastically reduced to CI$395,000. It needs clearing & filling but at this price there is plenty of room for that.

Update from Little Cayman by Wes Dangerfield
Everyone knows quite well that the property market has been slow moving over the past year (or more). This however is not all bad news if you are interested in making a purchase. Sellers are realizing that if they want to make a deal in a reasonable period of time then they must meet the current levels of pricing. This equates to a great time to buy for anyone who has contemplated owning that perfect vacation home on a perfect island.

Condo prices have come down to what I believe is the bottom and it should not be long before people start to take advantage of the bargains. A 2 bedroom 2.5 bathroom beachfront condo in a complex that has recently undergone numerous upgrades for just over US $300,000? In many places you would be looking at a condo without even an ocean view for this price.

Land has also come down in price and there are some great buys on ocean front parcels that are ready to build that dream house you have always wanted.

On an island that does not generally have many residential houses available on the market, the few that are, have been priced with selling in mind. Think about a 3 bedroom, 2 bathroom house on the water that has no neighbors and nothing but the sound of the waves on the reef for US$625,000.

There has not been a better time to buy!

Update from Cayman Brac by Debby Jaeger & Stephanie Grizzel
Cayman Brac continues to offer affordable prices compared to the rest of the Caribbean on everything from oceanfront homes and beach lots to bluff land which includes acreage, inland lots and bluff edge lots with panoramic views.

It is "low key" without the hustle and bustle but with almost all the amenities and this makes this small, peaceful island a great place to escape from the fast paced, stressful lifestyle back home.We are looking for purchasers who are seeking safe investments for their retirement. There are now weekly direct flights from Miami and Jamaica which gives a greater diversity of international purchasers. Marina fever has caught on and there are now two proposed marinas, one is behind the Alexander Hotel and the other is at Scott's Dock on the north side of the island. Recently, the Brac received new paved roads which gives a polished look to the north side of the island. With the new bluff ramp opened and the roads upgrade project due to be completed in early 2011, it is even easier than ever to get around this beautiful island. With no traffic or crime, Cayman Brac is the ideal investment for the international buyer or the Grand Cayman investor looking to get away.

Late Breaking News
The cruise ship port has been on again, off again. Deals have been announced then retracted. Tenders have or have not been done as required. Rumors are rampant. It has just been announced that a deal has been signed between the Port Authority, GLF of Italy and Royal Construction. We hope the chosen firms are up to the task and that there are no further delays.

Other Projects
Finally it seems we may have a break in the stalemate over the Shetty Hospital Project. Maybe, we hope so - we will see. And what about the runway extension??? Neither will cost the Government anywhere near what the other projects they are considering will, and both are likely more important to our economy. Pardon me - but I just don't get it. All we are getting is "Lip Service" and that will not improve our economy.

The Good News
Is that the Government Stimulus Implementation Group is now being headed by a Private Sector Individual - Jude Scott. We are hearing nothing but good things about his approach to the myriad problems we face. No offence meant to any current or past legislators, but Private Sector Individuals have a different point of view which can do nothing but help in dealing with some of the problems which are inherent in Government itself.

Staff
We are pleased to announce that James Butterworth has just been made a Partner in the firm and as such will be our third Broker. James has been a Realtor in Cayman for 4 years, with experience in Commercial and High End Residential Real Estate on top of a ton of marketing experience in the UK. His expertise and willingness to be a team player are a perfect fit for our team at Coldwell Banker and we look forward to his input and productivity for many years to come.

Special
Sitting on the beach at Silver Sands with a lovely sunset framing Paul Allen's yacht anchored just offshore is a reminder of the attractiveness of Cayman to those with discretionary income. We just have to remind them of us - which means we need a better marketing arm and also we need to ensure no local negative issues become trends.

Caymans economy is still ticking over, the recession in the US notwithstanding. There is still some building going on. That is not to say we have not been affected. Those businesses relying on Tourism and discretionary spending have felt it the most - including Realtors. Sales continue but the existing market is almost totally price driven. Potential Sellers who truly want to sell have no choice but to price their properties better than their competitors. That shouldn't be a surprise to anyone really but owners of Cayman Real Estate are just not used to having to reduce prices this much to make sales. However, those that bite the bullet are being rewarded with sales.

It is very difficult to predict the short term future of the Cayman Real Estate market because there are so many variables affecting the world economy in general. We are heavily dependent on the fortunes of the US and the direction of their economy is unknown. If the Liberals are able to continue the socialist agenda, the US is in deep trouble and so are we. Over the next 2 years the Conservatives could limit the damage but we won't see real recovery while the tug of war continues. If the Conservatives win in 2012, confidence will return, but austerity will then be required to balance the budget.

The wild card is really Cayman itself. If we can get some of these Capital Projects going to rev up our local economy while bringing new visitors here, that will be a good start. Next step would be to simplify and ease the Immigration regulations on residency and rollover to instill confidence in our residents. Lastly, we need to ensure that problems like crime and poor education are remedied to ensure our destination remains attractive to visitors and potential new residents.

We will never be completely immune to outside influences, however, we can do so much more than we have been doing to attract business here. We cannot let the bureaucrats either internationally or in Cayman dictate the direction of our country. That will take a large dose of political will. It will be interesting to see whether we have it.

Why Coldwell Banker?
In a very complex market such as this you need a wider level of information and data interpretation than any single agent can provide - whether or not you are a Buyer or Seller. Out team approach at Coldwell Banker ensures that you receive the depth of collective advice, supported by an array of the latest marketing tools that no other company is capable of delivering, together with a level of service and personal care second to none. Choose Coldwell Banker and start making the right decisions in 2011!

Forecast
While we expect it to take the USA 2 years to get the proper individuals in power to really make a difference up there, if that happens (and it looks promising), there will be new found confidence by the end of 2012. This will lead to a resurgence in the USA which will take some time, but will be very good for Cayman. Meanwhile, if our Sellers continue to drop their prices and if our phantom projects get started, we will be able to make a difference in our economy right here in Cayman. But these are all big "ifs" and so we see partly cloudy skies with possible sporadic clearing over the next 6 months.

We wish all our friends, clients and customers a very Merry Christmas and a New Year full of Love, Peace and Prosperity