We’re seeing increasing signs of a significant turn in Bermuda’s housing market. It began with the many for sale signs scattered around the island that seemed to linger endlessly. Today’s surprise was a couple posts on my company’s kitchen notice board advertising 2 bedroom apartments for under $2500 a month near Heron Bay Marketplace. This leads us to note that the ‘executive’ moniker so popular during the boom period is rare to be seen and despite it being the last day of the month, numerous rental listings still exist as available Sept 1st. New monikers dotting the ads include ‘spacious’ and ‘REDUCED RENTAL’, things you were less likely to see in the past. Also shockingly listed is a 3 bedroom condo in Hamilton parish for $695k, a price for which only a few years ago you would have been lucky to get a 2 bedroom condo.
Bermuda’s real estate market increasingly seems to have taken a turn away from the boom period and is something we’ve been expecting for some time. While certainly a boon for those renting and hoping for market prices to drop it is not a good sign for those who overleveraged themselves during the boom period to take on huge mortgages with little down payments only to watch the value of their homes decline while the mortgage stays the same. Worse are those who struggled to afford the payments in the first place and may now be facing layoffs or already have been in the wave we’ve seen.
As they say, leverage is a knife that cuts both ways and this may yet only be the beginning. Especially as we get a better picture of the state of jobs in our economy when the
June July August September? employment brief is released.