Panama Property Anaylsis – Kent’s Korner

A insightful take on Panama’s Real Estate Market.

This month, we are interviewing Kent Davis, sales manager and founder of Panama Equity Real Estate. Davis has made quite a name for himself in the real estate market here in Panama, and we had a chance to “talk shop” with him over a coffee in Super Gourmet this past week

Recent interview featuring Kent

So how is the market?

You know, this is always one of the first questions I get. It can be a brand new client or someone that I’ve been doing business with for years. It’s interesting because most of the time it’s someone on the other end of the phone who is calling from outside of Panama, and I am sort of their “Johnny on the spot” in Panama. It’s actually a pretty good feeling to have that kind of trust with people, and even if we’ve never spoken or traded emails before, they somehow feel a connection to me.

Anyway, so the market?

Panama seems to have a lot of negative press right now, what with the serial killer and all
I mean, it’s not like the guy was from Panama!

…but what about the world economic crisis. Have you seen projects getting cancelled or being severely delayed?

To be honest with you, there are only a handful of projects that seem to be at a dead standstill. Los Farros de Panama is probably one of the most visible “holes in the ground” but really, in my four years here, I’ve seen very few projects that get pre-sold and then never start. Granted, there are a lot of projects that are years behind schedule, but at the very least the jobsite is full of workers plugging away. Take, for example, Bala Beach. I was preselling that project back in 2007, before the location had any activity, and according to the developer back then, they were expecting to deliver in mid 2009. Now I’m hearing closer to January/February 2011 which sounds more realistic, but I LOVE that project! It’s the only development on the Caribbean coast and I really think it’ll be a slam dunk when it’s completed. There’s nothing else up there, and if you catch that project on a beautiful blue sky day, with the waves calmly lapping on the shore, there’s nothing better…Some of those units started out at less than $50,000. (grinning) And I have a few resale units if you’re interested…

Where would you invest right now?

You know, I get that question a lot and it’s a tough call. Every now and then, I see an amazing deal out at the beach. Say, for instance, a small piece of land on the Caribbean coast, near Isla Grande. I would LOVE to pick up something like that for me and more importantly for my kids, but I’m not really in a position to make that kind of investment right now. My next investment will in all likelihood be a small place in the city, under $200,000. Somewhere where we can walk to places like the grocery store, the gym but without any noise. I’ve got my eye on Bella Vista and El Cangrejo.

What do you see for Panama over the next five years?

I love seeing the headlines these days, because every morning the government is announcing the start of some new major project. Whether it’s some new mega complex out by the airport or another big road connecting cities, it all means one thing: more traffic! Just kidding. True, we are already dealing with a lot of growing pains, but in three to four years, forget about it! This place is going to be a totally changed city, and from what I see right now, we’re moving in the right direction.

Anyone thinking about real estate here has to have the mindset that prices aren’t going to double or triple in three years. It’s just not going to happen. What I am absolutely positive of is that we’ll see some continued correction in areas that are already overbuilt, with prices starting to inch up more and more as the world economy recovers. You’ve got to remember that back in December, 1989, there were literally American tanks on the ground in Panama. It was a full scale invasion, and look at the place now, just over twenty years later! Back in the early 90’s, when there was still blood on the streets in Panama, places like Jamaica and Costa Rica were really taking off. Panama is still catching up to that, and the good thing about it is that they’ve got what I think are the right people leading the charge.

Personally, I really like this Martinelli guy because he’s a businessman first and a politician second. He’s running the country like he runs his businesses: cut the fat and keep your eye on the prize. Granted, some of the things he’s doing I don’t completely agree with, but overall I think he’s made great strides for the people of Panama in his first year in office. Unemployment is low, the Canal is still making gobs of money, and besides the occasional protest, this city’s in pretty good shape.

What do you miss about the USA?

I used to miss Morning Edition and Marketplace on NPR until my friend told me I could stream it on iTunes. What do I miss now? I guess the biggest thing I miss are the seasons. It’s nice to see the leaves turn colors and have to use a thick blanket at night. But hey, the grass is always greener on the other side, right?

People are talking about a slowdown in Panama. Who is still buying in this market?

You know, we’re still putting together deals! My last closing was a beach condo: Canadian buyer, Canadian Seller. Before that, it was a distressed sale of an ocean front city condo sold to a European who does business here a few months out of the year. We’re also working with a few of the new teachers from International School of Panama, some new arrivals from Proctor and Gamble, as well as a young couple from New York looking for investment property.

Overall, global capital is still quite skittish but Panama keeps popping up on their radar. August is usually a slow month, and we’ve got three closings this week!

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