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|
This post's rating:
6 Unpublicized Panama Real Estate Mistakes
What You Need to Know About Panama’s Real Estate Boom
Panama’s Top 7 Online Real Estate Resources
Panama Real Estate Report by Matt Landau