Residential
The biggest change in our market place is reflected in the single family home market where prices have been falling for 3 1/2 years. The sale price of homes rose for the first time in years to 23% over last years year to date level. There have been significant price reductions and many of those properties have now been sold. Price movement in this sector of the market is likely to be higher from here on in. One area which has been very soft for very long has been Cayman Kai. It is one of Grand Cayman’s nicest areas. Prices have fallen for land to the point where good 100 ft. 1/2 acre sandy beach homesites can be purchased for under $500,000. These are good deals and we don’t see them being around next year at that level. Although homes are still overpriced in that area we know of a well maintained oceanfront 4 bedroom home on over an acre of sandy beach which may go for as low as US$1.0M! Call Coldwell Banker for details.

With regard to condominiums, the top of the market is still strong and has really never faltered. Some all time highs were hit this season on the beach in mid to upper level projects eg. Aqua Bay at $630,000, Silver Sands at $484,000 and Plantana at US$851,000. Prices in the condo market sector overall are up 6.6% year to date over last year. Units are beginning to move but at much lower prices in developments on the southern end of Seven Mile where beach erosion has been significant. Units like these have pushed the average marketing time for condos up to 449 days. The Ritz has sold about 55% of its condominiums and Waters Edge has 13 sales and has announced a September 2003 commencement date. Brian Butler’s Meridian has only 1 unit left out of 33. Call Coldwell Banker for prices and availability.

Commercial
The Financial Sector is still trying to absorb excess office space. Lease rates have dropped 15% since 2000. Prime space is now being offered in the low $30.’s and some developers are offering build out allowances for the first time. BritCay House on Eastern Avenue has reduced their rates over 20% to US$33.50/sq. ft. and will fully finance the fit out over the term of the lease. They also have a very generous parking allocation. The top floor of the Axis Building on North Church Street is brand new space, fitted out with marble and ready to occupy. Call Coldwell Banker for full details.

Development
The Dart Corporation is beginning works on the first phase of their multi-use West Indian Club Development of 280 acres from Seven Mile Beach to North Sound. This will be a long term project which will set new residential standards in Cayman. One has only to look at the Dart Section of the Harquail By Pass to recognize the pride that company takes in the way they do things. We feel comfortable in predicting a finished product which will be the envy of the Caribbean.

A Consortium has purchased the acreage north of Vista del Mar called Vista Norte, and one of the last remaining Webster Family Seven Mile Beach holdings, as well as the defunct Crown Jewel development site, and the old Tomasso house & land. That amounts to approx. 360 acres with 1400 ft. of Seven Mile Beach frontage. Look for a major destination resort to be built there.

Caribbean Club will shortly announce redevelopment plans which will include approx. 18 units for sale out of 36 total units (with 12 units reserved for current owners). Units for sale will be 2400-2500 sq. ft. 3 bedroom units in a seven storey structure on 300’ of beach. Prices are not finalized but will be in the $1.5M range. Although sales reservations will be accepted shortly, construction will not commence until approx. May of 2004. This is one of the finest locations on all of Seven Mile Beach. Reserve your unit now. Call Coldwell Banker for more details.

There are a number of very interesting development properties available at the moment. If you have about $5 Million you would like to invest, how about 184 acres of high ground which has been targeted by Government as Cayman’s future Commercial Port Site. The owner does not want to participate and will sell a property which has in excess of $70 Million worth of fill alone on it for $4.25M. If you would prefer residential property how about your choice of a 6.4 acre parcel in Pease Bay zoned Beach Resort Residential with 550 ft. of gorgeous beach or 100 ft. of prime Seven Mile Beach which could support 15 condo units or an oceanfront estate. There is certainly a lot on Cayman’s development horizon! Call Coldwell Banker for details.

Sister Islands
There has been very little activity in the Sister Islands over the previous 6 month period. A few lavishly furnished oceanfront 3 bedroom units are still available at the Club on Little Cayman. These are superb units and the next one to sell will be a steal. Sandy beachfront lots are available at excellent prices in ranges from US$60,000 (North Coast) to US$200,000 for the best beach (Preston Bay). Call Coldwell Banker for the inside story.

Tourism
The Tourism Ministry is looking to diversify our tourism product. At least 2 groups are looking to establish a Dolphin Experience here. They exist in the Florida Keys and Bahamas and are very popular. There has been some vocal opposition in Cayman but if you have visited the Theater of the Sea near Key Largo you will find an attraction which is a scientifically run tourism product. This is one of the few ways children can interact with animals in their own element. Developed and run properly, there is no reason why such an attraction cannot be both successful and as humane as any captive animal program can be.

Banking
Congratulations to First Caribbean Bank on their 35 year, 5% down mortgage proposal. Perhaps, if the Monetary Authority would work with the banks to simplify the Due Diligence requirements new customers would begin to open accounts again and the banks could get back to the business of lending instead of record keeping.

Infrastructure
The really good news is that Government has committed $7.0M to complete the West Bay Road By Pass as far North as Indies Suites within 1 year! Hooray!!! That is music to our ears as it will alleviate the traffic congestion on West Bay Road making it much more pleasant to visit or live in George Town, West Bay and especially Seven Mile Beach.

The bad news is the Government seems intent on inundating us with cruise ship passengers. Some local merchants are in favour, but the fact is this is not good for Cayman. A recent Deloitte & Touche study showed 86% of total visitor spending came from stayover visitors and only 14% was contributed by cruise visitors. In addition, there are too many of them here at the same time for them to possibly enjoy their experience. As a result, fewer of them will come back as stayover visitors (which is supposedly the aim) and the presence of so many drives away current stay over tourists. There is a concept called “diminishing returns”. In short it means that at some point too much of a good thing becomes a bad thing. We are well past the point of diminishing returns with regard to cruise ship numbers.

Legal
We bid a not so fond farewell to our ex-Attorney General Mr. David Ballantyne who was last seen on a flight back to the UK. His first claim to fame was spearheading Caymans sellout to the OECD and FATF. Ballantyne along with ex FRU Chief Mr. Brian Gibbs (who left even before he was asked) was largely responsible for the unfortunate, unnecessary and costly Eurobank closing and the subsequent failed court case. The only positive aspect of this whole mess is the possibility that future Attorneys General will be appointed locally thus removing doubt as to where their loyalties lie.

Kudos
The Chamber of Commerce and the Center for Freedom and Prosperity, supported by Michael Alberga of the law firm of Myers & Alberga recently held an economic forum. The caliber of the panelists and the information provided was top quality. Retired US Congressman Dick Armey’s encouragement to the Cayman Islands to continue to resist the bullying of the high tax jurisdictions was heartening. But the combination of the high cost of arranging such a forum and the disappointing local turnout may mean this will never happen again here. We hope local businesses will pledge to support such a worthwhile event if it is offered in the future.

Government has announced the extension of the Stamp Duty rate of 5% for a further six months until November 13th. This along with the statistics mentioned above make all the buy indicators ‘green’.

For the second year running Coldwell Banker Cayman Islands Realty finished #1 in the world in sales volume for all Coldwell Banker offices of our size. Our affiliate in Bermuda, Coldwell Banker JW Bermuda Realty, was also #1 in their office size. The fact that 6 of the 10 awards at the Business Conference went to international firms this year indicates the continued successful internationalization of the Coldwell Banker organization.

Special
According to a study recently published in the Real Estate Economics Journal, home ownership is good for children. They found for those living in their own home, instead of rented units, academic performance was up 7-9% and behavioral problems were down 1-3%. This was unrelated to household income, education, marital status, or # of siblings. The effect was credited to: safety, home improvement, child/parent activities, educational materials in the home, and stability in one location. In fact, the effect increased the longer the family lived in their own home. So there are more than just rental savings benefits to owning your own home!

Although the market seems to be firming (so this advice may be a bit late), we are still seeing very good deals being struck by purchasers. There are some sellers who have alternative plans that won’t wait for the market to improve. These people will look at lower offers. But the crucial point is: to discover a sellers bottom line – you have to actually make an offer. Making a “low ball” offer doesn’t always work, and you should follow the advice of your realtor who can tell you whether a particular seller may be receptive, but all successful bids start with one thing – a bid.

Forecast
There are still signs of economic illness especially in Germany and Japan and to a lesser degree the USA, which are huge obstacles to any worldwide economic recovery. But the stock market is showing signs of life and the mergers and takeovers will only leave us with a healthier economic outlook as the markets turn. The local real estate marketplace has taken its lumps over the past 3 1/2 years and managed to come through it in pretty good shape. The people who are buying now are purchasing at 75-80% on the dollar in most instances and we are now seeing more buyers than sellers for the first time in a while. That plus all the new development which is all of a sudden on the horizon makes for a pretty cheery outlook. We look for a continuation of the growth pattern which has been emerging for the balance of the year; so our forecast is for increasing clearing and sunnier skies.