When Will We See “Just Reduced” Price Tags On Panama Real Estate?
There is a global economic crisis taking place, and no matter how much the Panamanian government wants to deny it, Panama is feeling the effects. No one expects Panamanian officials to harp on the doom and gloom, but it’s time to get realistic.
Real estate developers and private sellers in Panama have been extremely greedy over the past two years, constantly increasing their prices, regardless of the amount of demand. We saw two years of thousands of new projects coming on the market, yet every developer believed their project was unique and worth more than others. This attitude is now coming back to bite them.
The Panamanian Association of Real Estate Agents and Promoters recently commissioned a study about the current state of Panama’s real estate market. The findings were not a surprise to anyone who was skeptical about Panama’s multi-year boom. The study showed that real estate sales have fallen 80% compared to last year.
What else is it going to take for developers and private sellers to realize this party is over? People who purchased units 2 years ago at half the price they are trying to resell them for today need to get real. Those people no longer have the option of doubling their money. They can probably still make a profit if they purchased early enough, but not as significant as they could have 8 months ago. Sellers take note: You will not sell your $125,000 unit for $299,000 now. If you are still hoping for that outcome, be prepared to hold on to your unit for years!
A new party will begin as soon as sellers realize they need to drop their prices drastically. Then buyers should be able to walk away with a completed unit at the pre-sale price from 3 years ago. That will be the beginning of a new real estate boom in Panama. All we have to do is wait for developers and re-sellers to wake up and smell the Cafe Duran.
| Written by Rebecca Tyre |  |
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Filed under: News, Real Estate on December 18th, 2008
I wonder if the real estate report completed for the Panama Realtor Association was to have remained internal. The real estate industry doesn’t normally let out negative information.
Thanks for the post.
Wishfull thinking.
Rebecca,
Great commentary. Being in the industry, I decided not to buy 2 years ago knowing that if I was patient the market would come back to reality (I rented instead). I work in the “high-end” real estate auction business and am actually conducting a large luxury condo auction in Panama in mid April 2009. We are conducting numerous condo sales in the US where we will sell anywhere from 25-200 units in one day. If I were a developer or individual with multiple units, I would be getting out of the market ASAP, take my profits and be happy. The global credit crunch will spare no market, not even Panama. With the price of oil plummenting and global inflation roaring, the Panama market will correct itself drastically and soon. See you at the auction….
Don Winner of PanamaGuide seems certain that the floor isn’t going to drop out from under. Rising construction costs and a ton of Venezuelan and Colombians fleeing their native lands may keep prices afloat for a while, but I just don’t see the $600k range condos holding their inflated values for more than another few months. Will be very interesting to see what happens in about 6-8 months when 25 new towers finish and the market has a lot more finished product available to buyers.
Hey Gary – where can I get info on the auction? I’m an interested buyer. steve (dot .) inquires (at@) gmail (dot.) com
Thanks
In response to your title/question: May 14th, 2009.
(FYI – I also guess weight and age at birthday parties as well as carninvals and bar mitzvahs if anyone’s interested in my services).
If you buy at the auction you still will have some problem with the building maybe half finish or units not sold. I have a suggestion for people willing to buy and live in Panama to make an offer at real estate on sale that are finish with a management running.
My 200 mt2 apartment is fully furnished 2 years old with sea view at $ 350,000.00. Any real offer?