my picks for Panama deal seekers

There may be a global financial crisis going on, but if Panama’s real estate asking prices are any indicator, that memo never made it to Panama.

During the Panama real estate boom of 2005-2007, crowds of investors were playing fast and loose with money like a sailor on shore leave.  Real estate prices rose impossibly fast, even the most remote parts of Panama.  The speculators were coming from everywhere; big biz Panamanians, law firms, hedge funds, foreign developers. Even a few celebrities got into the gold rush.  There were times when, on any given weekend on the Pacific beaches near Panama City, one could count half a dozen helicopters thwapping by, presumably transporting high-dollar prospectors able to afford an eagle´s view.

That brings us to the stark reality of 2010.  Panama´s real estate market is still waking up to a hangover caused by some regrettable decisions made during the over confidence of the go-go years.  Prospective buyers are still coming to Panama, but are stunned by the high asking prices, particularly when compared to the post-bubble prices of retirement spots in South Florida.  It seems that sellers in Panama are still clinging on to the inflated prices of the glory days.  As a result, Panama´s real estate market is stuck, much like a mule halfway across a river…afraid to forge ahead, but too stubborn to go back.

The majority of inquiries I receive for Panama real estate are seeking low prices.  To those searching for a beach bungalow with ocean views for under $150k, I regret to inform you that your chances of encountering that in Panama are about the same as finding El Dorado.   Why not?  Well, the short answer is that the real estate market here just hasn’t mature enough yet in order for the bubble to have burst.  Supply for any finished construction near beaches is very limited, as are beach projects with small lots sub-divided.

But don’t lose heart just yet!  I do believe there are some exceptional values in Panama real estate. But this assumes you have realistic expectations, plenty of patience and also know where and how to search.  For those willing to seek out properties off the beaten path, here are a 5 areas where I think you may still be able to find deals.

WARNING: don´t expect country club living or a nearby Starbucks in these areas just yet.

BEACHES

1. Pixvae, Veraguas
Located on the Pacific Coast in the province of Veraguas, this remote beach town is prime for long-term growth. With green rolling hills, Isla Coiba and a half dozen other small islands nearby, this area is certain to become a tourist attraction soon.  At around 6 hours driving from Panama City, access to this region is still a challenge.  Finding small parcels of affordable land near this or any beach in Panama can be difficult to impossible, but I like this area because there are so many hills with nice views within just a mile or two of the coast.  Roads to these properties may be non-existent today, but this is where I’d suggest exploring for deals.

With Isla Coiba nearby,  which is a UNESCO World Heritage site and quite possibly Panama’s greatest potential tourist attraction, I would wager that the access to this region improves before the end of President Ricardo Martinelli’s administration.  If you are looking for a long-term investment, this whole coast is a must-see.

2. Pocri, Los Santos

Pocri is on the Azuero Peninsula, about 4 hours from Panama City on excellent roads. I refer to this town as a ¨Poor Man´s Pedasi¨, in reference to this beach side town´s more popular neighbor to the South, where my family and I operate a B&B.  Located about 15 minutes South of Las Tablas and 15 north of Pedasi, Pocri has the convenience of being near enough to civilization, touristy beaches and shopping, yet without crazy asking prices or tons of expats. The town itself is very charming and just seconds from a very good highway. The nearby beach is a 5 minute drive from downtown Pocri and is quite nice. The fishing is fantastic and the very lovely Isla Iguana National Park is just offshore.  I’m frankly surprised that this town hasn’t taken off yet.

Pocri has charming houses as in Pedasi, but at far lower prices

This town offers a nice balance between the calm and quiet of country living near the ocean, without feeling isolated. With lots of tourists already going to Pedasi and Venao, Pocri won’t stay a secret forever. For now, it’s hard to find any gringos around the area, and so prices for houses have remained within reason. I have a friend selling a small house in Pocri on a large lot for under $100k.

3. Torio, Veraguas
The Western coast of the Azuero Peninsula bears little resemblance to the Eastern side.  This area is far more green, has thankfully been deforested far less and has a more severe landscape. In many ways it reminds one of Hawaii, with emerald ridges plunging down to the sea.  Playa Torio is one of several beach villages on this side of the peninsula with stunning westerly views, long, lovely beaches and fantastic sunsets. Isla Gobernadora feels so close you could touch it and fishing is also quite good.

views from Torio to Isla Gobernadora are stunning

Access to this side of the Azuero from the Eastern side of the peninsula is still limited, but several roads are planned which should change that in the future.  In the meantime, this area has the long, pristine beaches that are becoming increasingly difficult to find in Panama…or anywhere else. This region has so many steep hills near the beach, intrepid investsors have a good shot of finding an ocean view at a reasonable price.

MOUNTAINS

4. Santa Fe, Veraguas
Located just over an hour North from Santigo, Panama’s 4th largest City, Santa Fe’s cool climate has begun to attract expats to the area. It borders the Santa Fe National Park, an area known for orchids, green hilltops and waterfalls. Some are calling it “the Boquete of the future”, referring to the popular retirement spot in the hills of Chiriqui.  The interesting thing about Santa Fe is that it may someday be well connected to Caribbean beaches of Calovebora via a country road that heads over the mountains and down to the coast.  The road needs some major work, but has been a hot topic in recent years. I personally have not been to the beaches of Calovebora, but they look fantastic in photos.

5. Penonome, Cocle
Penonome, which is just over 2 hours from Panama City, is already popular with thrifty expats seeking slightly cooler climes.  For deals, I like the small towns like La Pintada which head up the mountain toward the relatively unexplored Omar Torrijos National Park. This area has many of the charms of Santa Fe and is still fairly close to the highway. My gut says that eventually Panama will have a proper regional airport somewhere around Penonome or Aguadulce that would super-connect this central region with Panama City and David.

SUMMARY

I hope this article provides hope to those seeking their dream property on a limited budget.  If you are willing to be patient, kick plenty of tires and make some sacrifices to save a buck, I DO believe Panama still has some low price options out there.

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Filed under: Business, Real Estate on March 30th, 2010