By NEIL HARTNELL
Tribune Business Editor
A BAHAMIAN realtor yesterday said the industry's Multiple Listing System (MLS) was not the best indicator of market activity because it only featured "25 per cent or lower" of properties available for sale, telling Tribune Business it would take 10 years for it to list all available real estate.
Ryan Knowles, a real estate agent and associate appraiser with HG Christie, said the number of sales/conveyances logged by the Property Records Department was likely to "far exceed" the activity registered by the Bahamas Real Estate Association's (BREA) MLS for any given period.
Noting that sellers had yet to "fully embrace" the MLS, Mr Knowles suggested it would probably take another decade for the facility to match its counterparts in nations such as the US and Canada, where their systems featured between 95-100 per cent of all real estate available for sale.
And, to stimulate more activity in the Bahamian real estate market, Mr Knowles said realtors and appraisers needed to do a better job in handling the "unrealistic expectations" of many sellers, hitting them "with a hard dose of reality" upfront as to the likely price their property will fetch.
He added that some appraisers were doing clients "a bit of a disservice" by assessing properties at prices the sellers were never going to obtain in today's Bahamian real estate market.
Some agents, too, just to obtain the listing will readily agree with clients on the sales price, Mr Knowles said, even though it was unrealistic. As a result, the subject property "just sits there and sits there", further distorting the market.
Disagreeing with fellow realtor, Matt Sweeting, that BREA's MLS system gave "a fairly good indication" of overall activity in the wider Bahamian real estate market, Mr Knowles said: "While the MLS does give us an indication of the prices properties are trading at, it does not give an accurate indication of the amount of transactions taking place at any given time in the market.
"There's a simple way to test this. Take the number of MLS 'solds' for a given period, say the 2012 first quarter, and go down to the Property Records Department and compare it with the number of sales/conveyances they have logged for the same period. I can guarantee that this number will far exceed what's on the MLS.
"The reason for this is that unlike in the US and Canada, where 95 per cent (or more) of all properties for sale in the country are listed on the MLS, in the Bahamas that number is probably closer to 25 per cent. The MLS has only been in existence for a few years, and while it is a great indicator of pricing and what properties are selling for, it has not gained enough traction as yet to accurately reflect the amount of activity taking place in the Bahamian market."
Expanding on this theme, Mr Knowles told Tribune Business of the MLS: "It only represents a very small percentage. I said 25 per cent, but the number could be a lot lower than that. It's new, and sellers have not fully embraced it, so it's not the best indicator of activity."
Noting that there was no Bahamian company that produced a regular report on overall activity, as was done in the UK and US real estate markets, Mr Knowles said that for BREA's MLS to match its foreign counterparts "we'll need full buy-in, and that takes time, probably 10 years, before we get to that point".
Agreeing that many vendors were seeking prices that, in today's market, were often too high, the HG Christie realtor added: "I think a big part of the problem is that as realtors we are not doing a good enough job of dealing with unrealistic expectations from sellers.
"When listing a property for sale, instead of simply accepting the price the seller wants to achieve, we need to hit them with a hard dose of reality and, in most cases, this means listing the property at a lower price than the seller would ideally want to sell for.
"It's not 2006, and we're in a very different market where buyers are scarce and they can pick, choose and refuse. There are still segments of the market - for example, the $200,000-$300,000 condo/townhouse segment - that are buoyant and where the absorption rates (the time it takes for a property to sell) are healthy and demand is high.
"But for the most part, selling a property in today's market takes a lot of heavy lifting, and overpricing is probably the biggest factor for properties sitting on the market for a long time. Buyers are still out there, and they will take the time to sift through all the glut and find the best bang for their buck. Overpriced properties lose out every time."
Noting that some realtors were adding to these difficulties, Mr Knowles said: "Even with some appraisers, you get an appraisal saying your property's worth $600,000 even though you're probably not going to get it; you'll probably get $500,000.
"Appraisers sometimes do a disservice to clients, knowing they can't sell at those prices in today's market."
And he also told Tribune Business: "You have some realtors just wanting to take this listing, telling the client: 'We'll sell it for $1 million, no problem'. It just sits there and sits there, and ultimately ends up distorting the market.
"Some buyers are scared away, because they can't afford that price, they'll keep renting and think they can't afford to buy. They believe those prices are so high, but oftentimes that's not what those houses are trading at."
Still, Mr Knowles told this newspaper that the price expectations of Bahamian real estate vendors had started to adjust following a sluggish 2009-2010 for the market.
"Slowly but surely sellers are coming around," he added. "During 2009-2010 it was really tough to convince them, but things are changing. It's not 2006, and if you want to sell you have to discount the price."
When it came to the amount of time properties were sitting on the market for, Mr Knowles added: "A more level-headed, pragmatic approach to pricing would change this significantly. We (realtors) need to learn how to say 'NO'.
"If a seller comes to you wanting to sell with a price that is just ridiculous, say: "No thanks, I'd rather not." Why distort the market with a bad listing? That's all you're doing: distorting the market and scaring buyers away."
Still, sounding an optimistic note, Mr Knowles said: "Overall, the market is doing pretty well. We're OK. We've been busy; very busy. I've only been with HG Christie since February, and I've been extremely busy personally. All things considered, we have a lot to be thankful for."
He added that rising energy and gasoline prices had also impacted buyer sentiment, noting that Bahamian commercial banks had reduced interest rates and embarked on mortgage campaigns to win new business.
"Unfortunately, there aren't as many people out there doing well as there should be," Mr Knowles said.