Thread: Real Estate in Panama City Will Soon Be Cheap Again

Originally Posted by MRWOOHOO

My girlfriend and I are renting in Las Tablas a 3Bdr, 2bath, house with access to high-speed for LITERALLY $200 per month. This is not a crack district, no drive-by shootings, nice house, nice terrace, nice neighborhood, $200/mo. The new grocery store in Las Tablas is very nice as well and is within walking distance.

Sounds like a very pleasant retreat from city life! I wonder how often you make the trip to/from Panama City. If I had a better idea what to do with it, I might be tempted to look into some of the cheap mountain land, maybe a little closer to PC, and try to carve out some kind of personal paradisio on the cheap, but it still seems too much like a pipe dream.

Now, I realize it's mostly the high-end properties advertised on the internet, but I do see many, many $200k+ houses for sale all over Panama. Seems like a majority of what is listed is up in that range or higher. I just wonder how these places are moving these days. It would be interesting if there was an internet site devoted to forclosure property in Panama...

We don't have many foreclosures; we do have government auctions, and those are published in the newspaper. I'm not aware of an online presence, and you have to be here to bid. Banco General does have a foreclosure site; with a little googling and Spanish skills, you ought to be able to find it.

Also, keep in mind that people in Panama -- Panameños -- rarely use the internet to buy homes. They use word-of-mouth (first), and driving around (second), and the newspapers (third). There are lots of properties under $200K in the classifieds, but many of those deals never even make it to the PC newspapers; you'll just see a hand-painted sign on a house.

In short: This is still the third world, despite all pretenses to the contrary.

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Doing a quick search, I see Panama Real Estate Blog has some recent posts on the subject. They identified three ways of approaching forclosure type opportunities. You can show up for the government auctions; you can sometimes buy a bank's lien on a property before an auction to try to turn a profit from the auction itself; and you can look for pre-contsruction contracts to take over from distressed investors. Sounds like they are all very risky if you don't have thorough legal research done on not only the property but also all parties involved with the property before hand. You also need to be there with cash in hand for most cases.

BUYERS MARKET IN PANAMA


Panama Real Estate Blog » BUYERS MARKET IN PANAMA

http://www.panamarealestateblog.com/...ket-in-panama/

March 10th, 2009 | Category: Panama New Articles, Panama´s Market


14,000 apartments currently under construction in Panama City will be completed this year. Throughout Panama City uncompleted projects have signs offering apartments for sale or rent. Buildings completed within the past six months are half empty while the owners who bought several units are scrambling to find renters to pay their mortgage and high monthly maintenance fees. At night you can see many of these completed towers with no lights on in the majority of the apartments.

South Florida started to have similar symptoms 16 months ago causing many speculators to walk away from their deposits rather than becoming stuck with completing their purchases and paying mortgages and maintenance fees in apartments they never intended to live in.


The American Association for Retired People (AARP) reports that the U.S. recession forces many older Americans to cut back on expenses and contributions to their retirement accounts. AARP’s survey of Americans over 45 years old shows most suffer from savings and investment losses with many postponing their retirement.

The current global economic crisis affects the United States, Canada, Europe and Latin America which make up the majority of the tourists and investors coming to Panama.

U.S. Dollar: Panama has been using the U.S. Dollar since it became a country in 1903. When the U.S. Dollar was weak, Panama became more attractive to British, Europeans, Asians and Russians whose currencies were stronger. 2008 saw the Dollar rising in value. From January to December, 2008 the U.S. Dollar rose against the British Pound by 32%. From April to December, 2008 the Euro lost 19% value to the U.S. Dollar. The stronger the dollar, the less attractive Panama becomes to other foreign currency countries.

Panama’s real estate market which was a “hot” seller’s market for the past four years is now experiencing an emerging buyer’s market. The free Panama Craigs List ads website now has 100 real estate listings every day with most of them being re-published every two days because the most recent ads push the day olds off into page 2. Properties over $200,000 simply are not selling.

The first high end luxury apartments auction in Panama will be held in April. One of the world’s oldest real estate auction companies sees the current slow down as their first opportunity to auction off hundreds of luxury apartments in Panama City. They only show up when they see a downturn in the market around the world.

A buyer’s market means that Panama’s real estate agents must change their focus from the easy “sell, sell, and sell more” with literal bidding wars over desirable properties experienced the past four years.

Buyer’s agents will become the new focus. This means that real estate agents will be competing for good buyers instead of listings.

What do you need to look for in a good buyer’s agent?

Loyalty: The first thing is to make sure that his/her real estate company is not acting as an exclusive agent for particular projects. Their loyalty will be to sell those projects. A good buyer’s agent’s loyalty is to the buyer and no one else. If you want total loyalty then pay the agent a commission for finding the right property. Otherwise, the agent’s commission will only be from the seller which might confuse the agent as to whom the master is. However, a market slowdown creates hungry agents who will be happy to work exclusively with a good buyer.

Competency: When you walk into a clothing store and pick out a suit or a dress it usually doesn’t fit. Just like the seamstress or tailor, a buyer’s agent needs to know how to find the right fit. That takes listening to your wants and needs and budget limits. Knowing the right fit as to location, style and price isn’t always easy as buyers change their minds or become fussy or unable to communicate what they seek.

In conclusion, enjoy the upcoming buyer’s market; find a good buyer’s agent, a good real estate lawyer and happy hunting!

By: Steven Rich, Marketing Manager for Panama Offshore Legal Services

www.pos-inc.com (507) 227 - 6645

Cheap, cheap, cheap, is the way to purchase (and also the sound of small birds). I was talking with somebody that went on a real estate sales tour for the day and somebody was dropping millions of dollars on a 20-30 unit block of pre-construction apartments in Costa del Este. Not sure if this person just has nowhere else to put there money or if they really believe real estate speculation is still a good idea??

Or they are laundering drug money?

Originally Posted by MRWOOHOO

Cheap, cheap, cheap, is the way to purchase (and also the sound of small birds). I was talking with somebody that went on a real estate sales tour for the day and somebody was dropping millions of dollars on a 20-30 unit block of pre-construction apartments in Costa del Este. Not sure if this person just has nowhere else to put there money or if they really believe real estate speculation is still a good idea??

Or they are laundering drug money?

LOL A sound heard from small birds, but not something heard very often from the large-breasted Panamanian Plastican! Oh, sorry... wrong thread.

It will be interesting to see how much the "laundering" industry becomes more semi-respectible with the decline of mainstream economy in latin-american countries.

Im interested in Playa Blanca .Im finalizing my pensionado this fall and plan on looking then . Playa blanca seems like theres things to do but you never know till you see for yourself .I firmly agree with Matt in reguards to future falling prices .

Yaya

Originally Posted by rikjoh

LOL A sound heard from small birds, but not something heard very often from the large-breasted Panamanian Plastican! Oh, sorry... wrong thread.

It will be interesting to see how much the "laundering" industry becomes more semi-respectible with the decline of mainstream economy in latin-american countries.

LOL, yep, wrong thread. Let's just hope the US keeps drugs illegal or else the economies of Latin America will collapse. Legalization would truly ruin the real estate business.

I heard that more than a few central and south American countries, that are in very serous talks to legalize drugs by the end of this year...

I heard it will make it easier for the drug cartel to make more money in those countries....

When I was in California a few weeks back, an army of over 2,000 police arrested drug gangs and Mexicans in Desert hot springs California during a single big drug bust....

As Mexico slips into anarchy with the drug lords, America might have to do something with the drug laws as they are clearly losing the war against drugs, and costing so much. Kidnappings are now rampant in the usa from the drug gangs.

I never thought of that angle Martin, but if America ever does legalize drugs, there would be no more money for the drug cartels to launder money, so no more buying real estate for them, in fact they to might be selling real estate as well at that point to raise cash, imagine that...

So if drugs are legalized in America, say goodbye to the massive drug profits and the drug gangs, so that might be yet another bad thing for Real estate in Panama.


I would be interesting to see it how it all pans out...

Can't happen in the US for a long time, but you can be sure big heads are trying to figure out if maybe some nearby friendly country will have to open up ("against our will!") so that more of the money will stay in the hands of US interests. If we can tamp down Afghanistan's flow of heroin, we might open up Cuba. Lots of fertile fields for the relabled American trackters to till. But you can bet the Chinese and Russians would grin if they could start dumping heroin down there for the new stream of US tourists to soak up. Especially China. Remember opium? Payback is a bitch!

I spent the last three years touring Panama to see for myself the real estate opportunities everyone was talking about. I had an interest in purchasing an apartment in PC and also some land in Pedasi area. After I saw all the buildings going up in PC I immediately knew it was a train wreck waiting to happen. I held off and continue to wait for the big "adjustment". This is going to happen and it will hurt many speculators and investors.

With regards to the Azueros region, it is a diamond in the rough. I purchased two years ago and am now building a house. Beyond Las Tablas, it is quite remote, small village type atmosphere with not much going on. A few small restaurants and a Chino. I will say that as the building continues, the area will see more infrastructure and you will regret not buying when you had an opportunity to do so before everyone else decides its a cool place. Its already getting expensive.

With regards to Argentina, you need to remember that you can only bring up to 10,000 dollars at a time into the country. Most Argentinians want to have their money outside of the country in US dollars due to continued devaluation of the Peso. They have restrictions on how much money you can take out of the country aswell. So it is very difficult to buy property if you are not a resident. Inflation continues at 10 percent or more as the country is heavily in debt. The currency works in your favor if you are converting US dollars to Pesos though. As any Argentinian will tell you it is a very difficult place to make money. Crime is worse than Panama city at the moment with robberies more common and murders everyday. Panama is also getting quite bad but not as many gangs as Buenos Aires. Culture is far more advanced than any central american country. Great restaurants, dancing, education and health care.

Saludos.

Hi sALUDOS
Very nice sharing with someone that doesn't have to talk about drugs .Its not my world and hate stupid oppions about it .Is restaurants still cheap there in argentina.It been many years since i've been there. Do you feel its dangerous there in general . Do you have any knowledge of the playa blanca area?

Originally Posted by yaya

Hi sALUDOS
Very nice sharing with someone that doesn't have to talk about drugs .Its not my world and hate stupid oppions about it .Is restaurants still cheap there in argentina.It been many years since i've been there. Do you feel its dangerous there in general . Do you have any knowledge of the playa blanca area?

Who is sALUDOS, and how much impact will cheap restaurants in Argentina have on the Panama real estate market?

Originally Posted by Alan

With regards to the Azueros region, it is a diamond in the rough. I purchased two years ago and am now building a house. Beyond Las Tablas, it is quite remote, small village type atmosphere with not much going on. A few small restaurants and a Chino. I will say that as the building continues, the area will see more infrastructure and you will regret not buying when you had an opportunity to do so before everyone else decides its a cool place. Its already getting expensive.

Has the growth in building slowed down any recently, that you have noticed? Sounds like a good tip, but I would feel a little nervous buying in a place that is already getting expensive and still needs infrastructure improvements if the market might fall (or at least grow weak for a few years.) It may be best for those with patience and not too high expectations for a quick turn around on their investment. Which is good news for those who want speculators to stay away.

Yes I very much agree with you
As far as infrastructure im looking at an hour an a half away from Panama city .Prices need to drop because I can buy in some cases cheeper in the States than in Panama .

Yes Friends, I agree with you all. While reading your replies over here, I could get more info about the real estate. Thanks for it. I think now the real estate industry is down due to economical crisis, Is it?

The real estate prices in Dubai and Qatar are down by 40-70% , what kind of wonderland is Panama , prices are still so high ??!!

There are some deals in Panama Real Estate. You will want to buy the contract from the person. Contracts are great deals and are not open to the public.

Ya, They call it denial or wishful thinking in Panama. In the States ( Florida and California ).
Forclosed property is down 50% PLUS as a rule. So I cant underestand it eather.
Maybe a real estate agent could inform us in Panama.
Most people in the states is hurting in one respect or another and not thinking of buying a second property.

---------- Post added at 03:25 PM ---------- Previous post was at 03:23 PM ----------

Forbes your going to help me this fall as we talked before .Dont forget old Mike.

Prices are down in Panama: I don't know who is telling you otherwise. They're just not down as much as Miami or Merced.

And, prices in some parts of the US are not down as much as they are in CA, FL, and NV. Sure, prices compared to a year ago are down 28% in Vegas, but they're *up* 6% in Charleston. See The Fragile State of Home Prices - Kiplinger.com

Simple economics: Prices are determined by supply and demand. In Panama, there are plenty of people besides gringos who want to live here. E.g., of the people who have looked at my apartment for sale in PC, only 5% have been from the US or Canada.
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The majority of the population iis in Florida California and the upper east coast .Who wants to live in Charleston .Not many . Bloomberg last week said prices tumbled just last month in California and Florida .That was just last month .

I wish you the best on your property .However, I was not pertaining to you or your personal situation.

In fact I understood that the majority of condo purcheses and loans absorbed are from US citizens .

Again I,m not suggesting anything involving your personal situation Mr Exilio.

Originally Posted by Alp

The real estate prices in Dubai and Qatar are down by 40-70% , what kind of wonderland is Panama , prices are still so high ??!!

Very well said... Plus there is so much money in Dubai, yet prices still fell in a big way..

No matter were you look prices have fallen lots in the capital cities and major centres of each country, England, Canada, Usa, Australia, China, Hong kong, Singapore, and the middle East.... some cases as much as 70%, Did not matter if the country had all the oil or factories, or the largest foreign currency reserves in the world...

Almost no one has been spared...



well except for..... .... So far anyways...


Seems that the Capital cites and also the places that went up the most and boomed the most in the last 5 years are the ones going down the most now.... The larger and faster the increase the larger the decline now... Were places in the rural area's, or places that never went up that much in the first place also never did go down much now in the decline since the prices never did go up much... which makes sense right?

This means rural Panama will not go down much, but look at the price increase in Panama in the last few years and the boom, it all adds up to a very large blow up in the next year or two....

yaya, I offered my own example as just that: An example. It is an apartment for sale in PC, and is therefore open to all kinds of buyers -- but the prospects I'm getting are not from the US/Canada. The world here does not revolve around yanquis. :-)

In fact, it is a matter of public record that for the past two years in Panama, the greatest numbers of foreign buyers have come from Venezuela and Colombia; Europe is third, and the US/Canada buyers are in fourth place.

I am simply trying to illustrate that Panama has some immunity to the US woes. I.e., not many Colombians/Venezuelans are shopping in the US, because a) it's too far from their families, and b) the US probably wouldn't give them a residency visa. We have a very international market of buyers that doesn't exist in, for example, Merced.

Did you read that report from Kiplinger that I linked? I think maybe you missed my point. Yes, prices overall in the US are down, but not in all markets.

And I don't get your point about population concentration; what does that have to do with anything? Besides, there are many pockets in the areas you cite that do not have falling values -- e.g., Albany, Ithaca, Scranton, and more. (Granted, there aren't many in CA or FL.)

The same is true in Panama, in a different way: The high-priced stuff is hurting, but the under-$200K properties are still holding their own. Some waterfront penthouses in PC are unsold for 2+ years, but in other areas of the country -- and even parts of PC -- developers, investors, and homeowners are active.

Btw, I think Charleston is a great place. :-)
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O'kay Exilio

Thanks for your valuable suggestions and your views on the Real Estate of Panama City. Yes it is true that recently the condo prices have gone to somewhat beyond expectation and it is a nice time for the buyers to grab these cheap condos once and for all. Nice opportunity guys!

Originally Posted by BEL-AIR

I heard that more than a few central and south American countries, that are in very serous talks to legalize drugs by the end of this year...

I heard it will make it easier for the drug cartel to make more money in those countries....

When I was in California a few weeks back, an army of over 2,000 police arrested drug gangs and Mexicans in Desert hot springs California during a single big drug bust....

As Mexico slips into anarchy with the drug lords, America might have to do something with the drug laws as they are clearly losing the war against drugs, and costing so much. Kidnappings are now rampant in the usa from the drug gangs.

I never thought of that angle Martin, but if America ever does legalize drugs, there would be no more money for the drug cartels to launder money, so no more buying real estate for them, in fact they to might be selling real estate as well at that point to raise cash, imagine that...

So if drugs are legalized in America, say goodbye to the massive drug profits and the drug gangs, so that might be yet another bad thing for Real estate in Panama.


I would be interesting to see it how it all pans out...

Looks like you had good information BEL-AIR. Just heard the news about the legalization of posession in Mexico. I'm thinking maybe a few of those Texas-oil-billionaires living in their giant estates in Mexico are going to have fun flooding the US with it now and blaming it all on Obama.

.......

The rental market in Panama City is still strong even for premium products as PCs attracts many, many non-tourist visitors in the long term - such as business people assigned to Panama for a year - and continue to do so.

Mr Woohoo knows what he is talking about. I also live in the Los Tablos Los Santos area. The amount of rent that can be gleaned from a property seems to have nothing to do with the owners expectations for a price. I don't understand it but it is what it is for the time being. There is a house right down the street from me for sale for 45 g's. Good location, nice sized etc. It can probably rent for 150 bucks per month here to a panamanian family. Property owners see value in their homes whether it can rent for a good price or not. Why. Don't exactly know. Maybe they believe that foreigners will somehow see the value. I have a good friend who sells real estate and the homes he has listed don't meet my understanding as well. Folks, you can buy a Florida property and get better returns on the investment now. And, you speak english and can navigate the system and understand what you are doing. Naturally you can not expect to be in control of everything and/or events. But, it is less stressful. I would be very receptive to buying a property in Panama if I could see how it would benefit me. I live in the country. I am looking for a Grandmotherly type landlord. I will pay the going rate for the property. I will invite her over to lunch, suck up etc. And pay my 150 bucks per month. Whatever folks. This is no time in your life that it is appropriate to play the casino with money you cannot afford to lose. A house is something we live in. Enjoy.