April 2, 2008

Panama - an opportunity?

Panama – a great Opportunity?  You decide!

My wife Verena and I just returned from Central America.  We spent some time in Costa Rica but our main reason for the trip was to attend the annual real estate conference “Panama Spectacular 2008” in Panama City.

Driving from the airport to the city hotel, our first impression was a “wow”.  So many skyscrapers and many under construction were impressive. 

The conference started with an overview of the country and city and all its projects for the future.  We had even two ministers speak to us, Mrs. Carmen Vergara, Vice Minister for Commerce and Industry and Banjamin Colamarco, minister of public Works.

This meant to us first hand information all done with the help of very professional and informative PowerPoint presentations.

After 2 days of country and developer property presentations we had two full days of bus tours looking at projects even 90 minutes west of the city along the Pacific Coast.  Also two very impressive days.

Reviewing our experiences we come to the following conclusions.

The Panama Canal expansion project will be the economic driving force for many years to come for Panama.  The project started late last year, but will only get into full swing this year and will last until 2014.  More than 1.2 billion dollars will be spent in the year 2010 alone. The projected cost of the entire project is 5.2 Billion US Dollars.  What we also learned though and which is more of interest to any investor or business person getting into Panama is the fact that this expansion and the additional volume of much larger ships being able to go through the canal will have an impact on the Panama economy of an estimated $25 Billion to $30 Billion until the year 2025.

The annual growth of Panama was over 9% last year and is expected to be 8% this year.  The canal works will have a lasting growth influence for the next 10 to 15 years of above average growth.

Panama has 85 international banks, and 47 call centers, showing it is not all India for call centers by the way.  Panama is one of the very few places in the world where 5 major international fiber optic cables are going through from the North to the South.  Panama will always be connected, no interruptions of internet services ever as recently in the Middle East and India.

Colon at the Northern end of the canal has a large Free Zone, which many international companies use.  It is the number #2 Free Zone in the world after Hong Kong. 

By the way, Dell, HP and Caterpillar have production facilities in Panama and please note that 80% of all Panama business is done in the Canal Zone! 

The country is also in the planning stages for two new oil refineries, one in the North, one in the South.

The growth is mostly based on services in the export industries.

Where are investors and buyers coming from?  There is a strong influx of Investors from Chile, Argentina, Venezuela and Columbia.  Buyers from Canada are now a significant part as well.

By the way, 42% of the skyscrapers, condo, hotel or condo/hotel and office combination towers are presold to foreigners.

These are the facts we learned about.  What are the opportunities for SW Florida businesses and single investors?

The canal expansion is demanding goods and laborers and services for years to come.  Go to the canal website and learn what and how you can connect: www.acp.gob.pa and go the www.mici.gob.pa for information about industry and commerce.  10% of the labor workforce on the canal can be foreigners; here is an opportunity to overcome our local slowdown.  You need to speak some Spanish though.

There is a $189 million project at the downtown Panama City waterfront on the way, executed by a large Brazilian firm, which purchased all new dump trucks for the project.  Do we have too may dump trucks in our market out of the boom times; we should offer to the Panama construction firms?  This is just a thought.  Panama is also building a brand new highway between Colon and Panama City, connecting both canal ends with a modern highway, cutting the driving time from two hours to just one hour.

Because of this waterfront reclamation project we feel that the new towers on Balboa Avenue are the future and best investments.  Be aware though that older towers already on Balboa Ave. offer lower prices with the same views.  Your savings per SQM (10.7 SF) will be about 30% and more.

There are quite a few new tower and single family projects east of the city under construction, on the way to the airport, which we have looked at, but do not see the same growth potential as for the new Balboa Ave. towers.

Overall the older parts of the city (in the back of Balboa) are in a revival process and offer great restaurants behind the new Balboa Avenue towers in grown settings with old tress and gardens.

The countryside:

Most developments happen on the Pacific beaches up to 90 minutes from the city.  One reason for this is that the Pan-American Highway runs very close along the coast at this stretch of the country.  Then the road turns inland and away from the coast.  Here are established communities with fill in possibilities and new construction projects, where the first dirt is just being moved as we write this.  You can choose between single family, condos and high-rises.  You will be able to purchase a single family home from about $200,000 and up.  Just one quick comment, Panama is not “cheap” anymore.  This means that prices and projects have to be compared and evaluated very carefully.  Most real estate prices have doubled in the last 3 years!

Further west, close to the border with Costa Rica, are very nice beaches, but no major projects and inland, in the mountains, is the small city of Boquete, which we liked a lot.  It is an established community with newer developments along the mountain sides with outstanding mountain and valley views. On the way to Boquete you will find many newer developments as well, driving up hill for about 30 minutes until you get to the old caldera of the town of Boquete.  We would not buy along this road; the locations offer ocean views, but are on a huge plane with a slight slope towards the sea, miles away. The actual area directly around Boquete is what we liked.  This area is one of the most liked by Northerners and Europeans to retire to; it is much cooler and is not humid.  The mountain sides are forested and houses get build into this natural setting.

About an hour’s drive from Panama west as well is the mountain community of Altos de Maria.  The concept is good, but they are selling lots with no requested time frame to build on, so the community grows well by lot sales, but there are hardly any homes.  We were not impressed and feel that selling lots alone does not help getting people there.  We liked the climate, but it is too far out, away from shopping and services and too empty, like North Cape Coral 10 years ago.

During our entire time we felt safe and the Panamanians are a friendly bunch of people.

Our final comment is Panama City is a Baby Dubai, so worth considering for investment and/or starting a business venture.

March 19, 2008

Cape Coral real estate:sold vs. expired

The Cape Coral real estate market is the epicenter of the mortgage crisis and as a whole continues to be oversupplied.  In the graph below you will see the number of homes currently for sale compared to the number of homes that have expired.  You can see that at the peak of the market more than 60% of the homes for sale were selling.  Since December of 2006 that number has fallen below 30%.  Lower prices and good interest rates seem to be causing increased demand since December of 2007.  It usually takes 3 or more points on the graph to have a trend so in time we will discover whether or not this increase in sales persists.  Although there is no supporting data in this entry, the increase in sales has not decreased the number of homes currently for sale in Cape Coral.  We would expect to see some sellers who took their homes off the market come back on when sales start increasing and that seems to be happening.  A large number of foreclosures are still working their way to the market and will have an impact on the supply of homes for sale especially in the lower price range.  Ultimately, we need the buyers to outnumber the sellers for an extended period of time for our market to stabilize.  Lower prices and great interest rates will certainly help.

As always your thoughts and questions are welcome!

Steve Koffman

www.Koffman.com

Steve@Koffman.com

December 2003 through February 2008

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Cape Coral real estate - gulf access homes February update

The February numbers are out and the increase in sales is evident in the gulf access home catagory.  Since early January we have been seeing a larger number of buyers in the Cape Coral real estate market.  The increase appears to be caused by seasonal buyers who recognize the values.  We are selling homes to foreign nationals as well as second home owners and baby boomers.  We have not noticed an increase in the median prices or any obvious increase in prices as a whole but it seems that those homes that are well priced are catching the eye of the buyers in the market.  It is my hope that we look back and see that the bottom of the market for this segment was actually in November of 2007.  We will continue to keep you updated here on our blog. We want to be your Cape Coral real estate agents.  As always your comments and thoughts are welcomed and encouraged!

Steve Koffman   

 Steve@Koffman.com

Number of Gulf-access homes sold and median price

February 21, 2008

Cape Coral real estate - gulf access homes update

The Cape Coral real estate market has been on a roller coaster over the last several years, and more recently we have been riding down hill.  The MLS data from Cape Coral graphed below shows that sales are still low in numbers, but there may be a ray of sunshine in the median prices of gulf-access homes sold.  It appears that since mid 2007 gulf access home prices have stabilized.  If the trend continues it may be signaling a bottom in salt water home pricing.  Any time you look at median prices, there is always a concern that a true picture of the actual market is not being portrayed.  From the graph it looks as if the median prices are hovering around $400,000.  This could mean that only $400,000 gulf access homes are selling. Or, it could mean that the values have fallen to that price range. I think it is a little of both.  Since I do not have a crystal ball, only time will tell us if this bottom holds as we move into late 2008 and 2009.  The general feeling among my team members is that buyers like the values that they see in today’s market and the better priced waterfront homes are being sold.  With the excessive amounts of inventory that we currently have the only solution is for buyers to outnumber sellers for an extended period of time.  Lets all hope that this it the beginning of the end of our current market conditions!

 As always, any thoughts or comments would be welcome!

Steve Koffman
Century 21 Sunbelt Realty, Inc.
Steve@Koffman.com
239-443-2463
www.Koffman.com
www.CapeCoralFineHomes.com

September 2004 through January 2008

February 14, 2008

Cape Coral real estate market trends: Offwater Homes

The Cape Coral real estate market is still in transition. The January numbers are out and the off water home market seems to be continuing its downward correction.  The supply of homes built for speculation during the 2004-2006 time frame is very large.  Many of these home are off water homes that have started to come back on the market as true foreclosures.  Over the next year or so we expect to see the bulk of these homes built for speculation work their way through the market and the supply of available homes eventually begin to decrease.  While we are absorbing these foreclosed homes and the inventory of Cape Coral homes for sale continues to increase we are seeing downward pressure on the pricing.  In my opinion, the rate of foreclosures will determine when the market has truly bottomed out.  Keep in mind that the buyers for off water homes are different from the waterfront home and condo buyers.  Each segment will bottom at different times, in fact gulf access homes seem to have already hit a bottom but only time will tell.  

 If you have thoughts or questions please feel to comment.  I would love to hear from you!

Steve Koffman

Steve@Koffman.com

 September 2004 through January 2008

February 4, 2008

Cape Coral real estate - Mortgage update

The Federal Reserve lowers interest rates - What does it mean for you? Anyone that has picked up a paper or listened to the news over the past few months has probably heard about the Federal Reserve lowering interest rates.  The rates that have been lowered by the Fed are the Federal Funds Rate & the Discount Rate.   We will start with the Federal Funds Rate – This will influence the rates that consumers pay on credit cards, car loans, personal loans, & home equity lines of credit.  This does not have a direct influence on your fixed rate mortgages.  In fact, it will typically make them go up due to inflationary fears that lowering the rates create.   Secondly, the Discount Rate – This is the rate that banks pay when they borrower money from the Government.  This is a short term loan & generally is used to help the bank meet their reserve requirements.  Again, this does not directly affect fixed rate mortgages.   The primary reason the Fed has been lowering these two benchmarks is to help fuel the economy.  The Fed is trying to keep a balance between low inflation & a healthy economy.   

As always, please contact me for more details on this subject or any other mortgage questions that you have.  I would like to be your Cape Coral Real Estate expert. 

 Brian FultonOffice ManagerTomasso Mortgage239-945-4348

January 28, 2008

Cape Coral real estate - Sale of offwater homes

Thank you for reading and commenting on our Cape Coral real estate market.  As one of the top Cape Coral real estate agents I try to keep all of our customers updated about market conditions.  Below are two line graphs showing the declining number of offwater homes sold and the selling prices of these homes, September 2004 through December 2007.  The prices are based on the median, a point at which half the homes for sale sell at a higher price and half at a lower price.  As you can see, the median selling price for offwater homes at the end of 2007 was slightly below that in the fall of 2004.

Your comments on the market are welcomed.  And, let us know if we can answer any questions you might have.

 offwater-houses-jpeg.jpg

Steve Koffman

Steve@Koffman.com

Cape Coral real estate - Freshwater home sales

Category: Real Estate — 3:29 pm

As you know, our office tracks prices and number of sales for all types of residential properties in Cape Coral.  We thought you might like to see the graphs covering sales of freshwater homes between September 2004 through December 2007. As with Gulf-access homes, prices and number of sales have dropped considerably since the peak market activity of 2005 and 2006.

fw-homes-12-07.jpg

The Cape Coral real estate market is still oversupplied.  We are seeing some buyers making purchase decisions due to the much lower prices. 

sk-signature-tnrfont-bf-jpeg.jpg

January 25, 2008

Florida Immobilien in 2008 und danach

Category: Blogs in deutsch — 1:46 pm

Verehrte Interessenten!

Nachfolgend mein Rundschreiben vom Januar an unsere deutschsprachigen Kunden!

“Hier ist meine Analyse des US Immobilienmarktes.  Ich hoffe der Markt entwickelt sich besser als es heute aussieht.

 

US und Florida Immobilien in 2008 und danach!

Die Vorraussagen der Experten fuer die kommenden Jahre liegen vor und sind sehr einstimmig.  Hier eine Zusammenfassung.

Sie alle haben von der Misere des US Immobilienmarktes gehoert.  Die Preise sind seit der zweiten Haelfte 2005 nach unten in Bewegung.  Das gilt fuer fast die ganzen USA.  Wie geht es weiter?

Was sind die Probleme?

A)   Foreclosures! Weitere Immobilien werden auf den Markt kommen, weil die Banken diese loswerden muessen.  Das Angebot wird sich weiter erhoehen und erst nach 2008 in Balance kommen.

B)   Werden wir in den USA eine echte Rezession bekommen?  Ich glaube ja, aber nur begrenzt und kurzfristig.  Wegen der anstehenden Wahlen und dem neuen Praesidenten ab 2009 wird die Wirtschaft von der Regierung belebt werden.

C)  Der Dollar wird schwach bleiben, sicherlich bis weit in 2009 hinein.  Das ist gut fuer US Exporte, aber schlecht fuer US Importe und den Oelpreis.  Fuer Immobilien- kaeufe aus den EURO- und Pfundlaendern ist es jedoch sehr gut.

D)  Die Praesidentenwahl!  Wer wird der naechste USA Praesident?  Die Welt wird sich besser fuehlen mit einem Demokraten im Weissen Haus.  Sicherlich wird die Welt skeptisch bleiben und sich wahrscheinlich schlechter mit einem Republikaner stehen.  Der Irakkrieg ist das grosse Fragezeichen.

Wie wirken sich A) bis D) auf die einzelnen Immobilienbereiche aus:

I)       Einfamilienhaeuser:  Die Preise werden weiter leicht sinken, weil das Angebot hoeher werden wird.  Ich rechne mit einem Preistiefstpunkt in 2009, einer flachen Phase fuer ein bis zwei Jahre und dann mit einem normalen Preisanstieg von 3% bis 5% per annum.  Immobilien am Wasser werden zuerst wieder im Preis steigen.  Das war immer so und wird auch so bleiben.

II)     Eigentumswohnungen:  Hier wird die Situation sehr aehnlich sein, jedoch werden die Preise laenger “unten” bleiben, weil das Angebot von Neubauten noch waechst und die Preise sehr hoch angefragt wurden.  Miami z.B. ist voellig ueberbaut.

III)  Unbebautes Land:  Hier sind die Preise radikal gefallen und werden weiter fallen.  Da kaum neu gebaut wird, kaufen Bauunternehmer keine Grundstuecke.  Ein Markt ist fast nicht gegeben.  Allerdings sehen wir bei Segelbootgrundstuecken nahe am Fluss in Cape Coral Preise, die seit einigen Monaten nicht mehr fallen.

IV)  Gewerbeimmobilien:  Es hat 18 Monate gedauert, nun ist der Trend klar: es werden weniger Immobilien und Projektgrundstuecke verkauft, die Preise sinken und die CAP (capitalization) rates steigen in Richtung normaler Werte von ueber 8%.  Mieten fuer Geschaeftsraeume sinken ebenfalls und fuer neu errichtete und leerstehende Objekte werden Sondermietpreise und Sonderkonditionen angeboten.

Fazit:  Sie sollten in den USA und Florida in den kommenden drei Jahren nicht verkaufen, wenn Sie nicht verkaufen muessen.     

Fuer einen Kauf sollten Sie Geld bereit halten und spaetesten im zweiten Halbjahr 2008 bis Mitte 2009 kaufen.  Rechnen Sie mit einer Haltezeit von 3 bis 6 Jahren bis zu einem profitablen Verkauf.

Wir stehen fuer Ihre Fragen bereit und hoeren gerne Ihre Meinung.

Thank you - Danke
Kindest Regards - Mit freundlichen Gruessen
Michael Schneider-Christians,
MBA, CIPS, LTG, e-PRO
International Real Estate Consultant  –  Internationaler Immobilienmakler

Cape Coral Mortgages - Fort Myers Mortgages - Lee County Mortgages

Hello, my name is Brian Fulton.  I am the Office Manager for Tomasso Mortgage in Cape Coral, Florida.  We have been helping clients obtain mortgages in South West Florida since 1989.  I would like to share with you some recent changes in the mortgage industry that should help you understand what to expect when searching for financing. 

There have been many changes with Lenders over the past 5 weeks.  What you might be experiencing is a shortage of 100% loans & stricter underwriting on stated income loans.  What’s happening is that Fannie Mae & Freddie Mac have instituted a 5% reduction in Loan to Value for areas they consider to have  “adverse market conditions”.  This is almost all of the Nation currently.  This means that a 100% program will now only go to 95% Loan to Value.  This is a temporary restriction, but something that we have to contend with for the moment.  What we are seeing on stated income loans is underwriters being a little more particular.  They are making sure the stated income is “reasonable” for the employment listed.  This is an individual opinion & it varies from Lender to Lender.  That is why we currently work with over 50 Lenders.  These loans are by no means impossible to do; they just need to have more attention to detail.  This is where a seasoned Mortgage Broker can make your transaction go much smoother.  I currently have 100% Loan to Value mortgages as well as stated income mortgages.  Contact me with any questions you have regarding Cape Coral Real Estate or Fort Myers Real Estate.  I will put my 15 years of experience to work for you. 

Brian Fulton

800-531-6739

239-945-4348

brian@tomasso.com

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