FACT & FICTION: The Truth about Grand Cayman Housing Market.
Suppose the phrase ‘housing correction or house market downturn” reminds you of the scarier days of the financial crisis in 2008. Experts in the housing market in the USA forecast this will be a cooling-off period, more like a fan rather than the ice storms of Canada in January! Why? Good questions. There are three areas into which we will look. Over the last three years, the boom is best explained by the sudden increase in demand outpacing the supply.
One of the essential parts of hiring a realtor in Cayman is that they have relevant and up-to-date market views based on facts, not emotion or what the media says in the USA, Canada, or the rest of the world. You cannot always believe the news outlets.
Realtors at Engel & Volkers Cayman Islands know what is happening on islands and what is happening in the Americas and have facts and data to back it up.
Here are the Top 3 fictions we hear about Cayman’s housing market in early 2022.
#1: Cayman is in a housing bubble that will burst soon!
Cayman’s housing market is not average right now. It is a seller market. However, our market is not as crazy and unpredictable as the nor has the exact circumstances surrounding the crash of 2008. There was an oversupply of new construction; lending standards were lacking, especially in the USA. Many homeowners were cashing out their equity to buy a new car or an exotic vacation. Today’s market is the exact opposite. Since the housing crash of 2008, bank lending standards have tightened up a lot in the USA. Cayman has always been conservative and will get even more strict with lending. The real estate market in Cayman is undersupplied, meaning we have a housing shortage. A lot of homeowners value you are much more cautious with their equity. We see a continued price appreciation this year as demand outweighs home supply.
#2: We will see a lot of bank foreclosures in Cayman.
We are not seeing this yet in Cayman; not even close to the last sell-off. However, that is not what happened because of 3 reasons. Most homeowners have enough equity in their homes to sell, pay off their mortgage and have some leftovers. Also, there have been very few foreclosures over the last two years on CIREBA. Lastly, the current market can absorb those listings, and there are always cash buyers looking for good rental returns.
#3: House prices will depreciate.
As a full-time Realtor in Cayman, I hear this from those looking to buy and did not last year or before COVID. Price appreciation has many sellers and buyers indecisive. However, experts in the USA do not see home prices going down anytime soon, and it also applies to Grand Cayman. We expect prices to slow down slightly compared to 2021, but homebuyers’ strong demand for property will keep property sales increasing into 2023/24. Construction costs are not going down anytime soon, nor are skilled tradesperson.
If you wait to buy or sell, it will cost more because climbing mortgage rates and rising home prices wi
ll impact your next home purchase.
In conclusion, we will not see a bust of this bubble and experience a sell-off of distressed properties for the reasons we stated above. Make sure you stay connected with full-time Advisors so they can interpret the local Cayman market.