Real Estate in Panama City Will Soon Be Cheap Again

Real Estate in the City of Panama is not cheap.Luxury 3 bedroom condos sell above $500,000, houses in the suburbs are listed at $800,000, and city flats rent for over $2000 per month.Don’t believe me- check craigslist.com.Granted, this segment of the real estate market is directed towards Westerners because we love craigslist.com, but still, real estate here is expensive.However, this will not be the case for much longer.

Currently the condo real estate market in the city is collapsing.We all knew it would.Anyone who spent significant time in the city, and had a half-a-brain, knew that the building more than 10,000 units all within a 5 year period was going to over-saturate the market.This market was not driven by local Panamanians; their mere $500-$900 monthly salary excluded them from most of the development in the city.All of us saw this coming, but no one thought that the collapse would happen so soon.

Enter the financial crisis of late 2008.All of a sudden, the whole world doesn’t have the money they thought.Not the Americans, not the Canadians, not the Russians, not the Europeans, and not the Chinese… no one.Here we are in the start of 2009 and the first wave of new luxury condos is coming on the market.Nobody can pay for them and no bank will lend their required mortgages.The individuals who still have money and are looking to buy these luxury condos, they know they have money, and more importantly, that the current owners are cash-strapped, and want the deal of the lifetime.As a result, owners are starting to drop their prices… and fast.

I believe this bursting market is the best thing that could happen for Panama City.Panama was getting too expensive and needed this market correction to be cheap again.The major draw to Panama City is its quality cosmopolitan lifestyle for half or a third of the price than in most other developed world cities.But your cheap cosmopolitan lifestyle is soon ruined when you’re paying Miami/Buenos Aires sized housing payments.The market correction will take months to a year to complete and real estate shoppers will be able to purchase luxury condos at bargain prices, making Panama cheap again.

So if you are shopping for real estate in Panama City, instruct your agent only to show you condos selling for under developer prices.You take the square meter pricing of the condo and verify it to the developer and other comparable units in the area.If your agent says that he can not find any below developers pricing, find a new agent because you would be foolish to pay sticker price right now in Panama City.

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