Panama Real Estate Bubble Bursting Update 07/05/07
Today, Ivan Escalante, a real estate expert and the head of research at the Panama Real Estate Institute has declared that Panama's real estate market is bursting. In an interview with Bloomberg TV, he stated: "We have in fact reached a point where you can't overstate things anymore...I’m talking about dramatic drops from historic highs."
He also continued: "Prices may deteriorate further to 40 percent of what they were."
The volatility in Panama's market is due mainly to two factors; skyrocketing demand for housing abroad and high-income citizens who are looking for homes abroad. Those two factors have led to the depreciation of Panama's real estate, which is expected to continue.
Many countries in the United States, for example, are offering many subsidies to their citizens in order to fill up those empty houses. With this said, more Americans are buying homes in Panama because of the high-income amount of people who are looking for housing. In order to stem this trend, Panamanians would do best by selling property for whatever price they can get their hands on until the market eventually levels off.
There are many people involved in Panamanian real estate that have very good sources about what is going on with their properties and their market value. After all, auctions are very common in Panama. If you have an insight into this market, you can make anywhere from $2,000 to $75,000 just by taking part in an auction.
One of the best ways to make money in the real estate market is by taking advantage of the demand and supply. Nowadays, there are many things that are going on within the market that make it very hard for people to get their hands on properties. Therefore, people should be aware of these issues in order to gain a better understanding of what is going on with their properties.
According to the National Real Estate Association of Panama (ANIP), many Panamanians are getting out of the real estate market because they are afraid that inflation is going to increase, and that their value is going to go down. On top of this, there are also a lot of people who have been evicted from their homes, as well. This also goes back to Escalante's prediction about the instability within the real estate market.
There are a lot of people who have purchased property in Panama that do not live in it, in turn making the property depreciate even more. One way to avoid this is by not buying into these empty properties. Instead, you can take advantage of the market by selling them to the right people for the right price.
In order for people to get out of this market and save money, they will need to sell their properties as soon as possible just so that they have enough money to invest in something that is more stable. As mentioned above, though, there are a lot of ways to get your hands on as much money as you need while still being safe in Panama.
Panama can be an excellent place for foreigners who want a short-term stay in Panama while looking for a job or even getting married. There are many jobs available in many different fields. However, for those looking to settle down and purchase their own home, they should be aware of all the risks that popping up in the market today.
People who have been living in Panama for a long time will tell you that it's best to wait until the prices level out before making their decision about buying property here. It's not that it's impossible to find a good deal. It just means that you'll have to be very patient and know how to wait for just the right opportunity to come along so that you can buy with confidence.
There are cases of people saving money over the years by investing in a property that is worth no more than $250,000. The owner of the property is then forced to pay huge amounts of interest on the loan. If there was a downturn in real estate prices, the person would still have enough to buy a decent home. However, if you were to sell your property before you could get your money back or before it's time for the loan to be paid off, you will not receive any funds from the sale of that property.
People who are new in Panama should also be aware that house prices within Panama can go up and down greatly depending on quality and location. The more downtrodden and remote the property, the cheaper it will be. For example, $1,000 can buy a good home in a respectable location. However, if you are searching for a villa or condo in a prime location like El Dorado or Punta Pacifica you should be prepared to pay over $1 million for your property.
There is an easy way to evaluate what your property is worth by looking at previous transactions of similar properties. In Panama, sales are not recorded on a central database like they are in the United States. Therefore, it's best to jump on the Internet and search for real estate auctions that have been listed by those who have parted ways with their properties.
There are thousands of properties listed on sites like panamian.com, one of the top websites for real estate in Panama. These properties are also updated frequently and will give you a good idea of what your property is worth.
Of course, it's always a good idea to hire an appraiser so that you can get a better sense of what your home is worth and whether it's time to sell. If yours is just one of many homes listed at a certain price, you may want to consider lowering the price a bit if people aren't biting. However, if yours is the only home listed in its area, then you may want to consider raising the price.
There are many advantages to buying property in Panama. It is a fast-growing country and though it's located over the water, there are no bridges or tunnels that connect the west side of the country to eastern Panama. Having your own property made in Panama affords you more privacy than living in a shared apartment complex and allows you to avoid transportation expenses if you decide to move to another part of the country.
There are many people from different countries who have found ways of getting real estate in Panamanian, however without them, there would be no way for the economy to continue growing. If you are looking for property in other countries, it's similar to a black market, which is not as safe as buying in Panama.
Buying real estate in Panama is a brilliant idea because it will help the economy of Panama continue to grow. However, if you are interested in buying real estate here, you should always be careful about where you buy property and the way that you pay for it. There are many scams out there and though you may be able to avoid them by being proactive with your research, some people just don't have time for that.
Conclusion
As we mentioned before, Panama is still a mostly friendly place for foreign investment, but you have to be cautious and know exactly what you are doing when it comes to purchasing property. You also need to consider all of the risks that are involved with buying property in Panama and make sure that you can afford the payments in case your home doesn't go up in value as quickly as you'd like it to.
If you do everything right, though, buying real estate in Panama can be one of the best decisions that you've ever made. If done properly, you could see returns on your investment faster than if you had purchased real estate elsewhere.