Rising Real Estate Prices

[Danny W]

I've lived in the New York area my entire life (60 years), and 2 years ago I bought a coop in an neighborhhod in Manhattan that I previously didn't even know existed. Every time I visit Sosua I learn more about living there. I almost bought one of the new condos at La Puntilla, but decided not to because I would not be using it enough and I thought it was over priced. Now - a few months later - it seems like it was a bargain.

The bottom line is that if your are buying a home, the price is not the most important consideration. And unless you do something stupid, the value will appreciate. I think that the more time you take to learn and investigate, the happier you will be. - D

[Rocky]

Originally Posted by Glennt

If I have to pay a couple extra bucks for waiting so be it. If we do it right, in the long run we won't loose any $$

Words of wisdom.

I know you'll do fine.
Having the right attitude and not rushing, is what's it's all about.

[Bartolomeo67]

I agree that real estate is booming on the North Coast. However, properties do not always sell for the listed price or for the price people would want for it.
Last Summer a good friend of mine who goes to Samana every year was interested in a piece of land with small house on it in Las Terrenas, 2nd row from the beach. The asking price was over $150,000 which was beyond his budget. He later heard the property had sold for less than $100,000. The owner received an offer and went for it.
Bartolomeo

[ecarignan]

I agree with pricing going up. I bought a house march 2002 and it's nearly doubled since then. And, as others say, this is just the beginning. My realtor told me a year ago that 5 yrs ago, 90% of buyers were europeans and now 90% are north american. North americans are finally discovering a nice country with really cheap real estate compared to north america or to the rest of the caribbean. I looked everywhere before buying, and there is nowhere near the level of price that the DR can offer.

Also, real estate pricing has not much to do with the economy, political stability, etc.. but rather the law of demand and supply. I think there are more buyers than sellers on the market, so prices are going up.

Also, it's nice to have a "cottage" in the carribean. Also, don't forget that villa or condo rental is up from last year quite a bit too, so keep that in mind. It's not cheap to have an empty house in the DR usually.

Good luck to anyone wanting to buy DR real estate, I did and it turned out to be a very good move, only if I could get out there more often.

Eric

[Harmony]

I see real problems on the horizon for the Dominican economy and it should show up in real estate prices. The depreciating peso is just a symtom. The economy is in a shambles and there is no fix on the horizon. Oil prices are not going to fall as they have in the past because of growing Asian economies, depleting reserves and lack on new discoveries. It takes dollars or euro's to buy oil so the peso and dollar are not independent. As long as the government continues going into debt the peso will continue to depreciate. As the currency depreciates the schism between the have's and have-not's will grow resulting in more and more clashes. Don't say it can't happen in the DR.

The increase in real estate prices is a function of inflation. Why hold a depreciating currency? At the same time Expat's don't want to live in a country without the basic utilities, bars on their windows and a guard at their front door. That's like living in a prison. I would expect an exodous of expat's as the situation worsens; and it will worsen. I've seen it in several countries. As the government searches for more tax revenues it will hurt the economy even more.

The economy needs and eventually will get a real washout with many businesses going under (including banks), the currency becoming worthless and riots in the streets. Then you can buy real estate at depreciated prices if you have the guts. Like Luanda, Angola is today.

Finally, I hope I'm wrong (doubt it) because I really love it down there. I posponed buying for this reason when I last visited.

Harmony

[gringo in dr]

Originally Posted by Harmony

I see real problems on the horizon for the Dominican economy and it should show up in real estate prices. The depreciating peso is just a symtom. The economy is in a shambles and there is no fix on the horizon. Oil prices are not going to fall as they have in the past because of growing Asian economies, depleting reserves and lack on new discoveries. It takes dollars or euro's to buy oil so the peso and dollar are not independent. As long as the government continues going into debt the peso will continue to depreciate. As the currency depreciates the schism between the have's and have-not's will grow resulting in more and more clashes. Don't say it can't happen in the DR.

The increase in real estate prices is a function of inflation. Why hold a depreciating currency? At the same time Expat's don't want to live in a country without the basic utilities, bars on their windows and a guard at their front door. That's like living in a prison. I would expect an exodous of expat's as the situation worsens; and it will worsen. I've seen it in several countries. As the government searches for more tax revenues it will hurt the economy even more.

The economy needs and eventually will get a real washout with many businesses going under (including banks), the currency becoming worthless and riots in the streets. Then you can buy real estate at depreciated prices if you have the guts. Like Luanda, Angola is today.

Finally, I hope I'm wrong (doubt it) because I really love it down there. I posponed buying for this reason when I last visited.

Harmony

While no one can predict the future, I believe you are closer to reality than the rosy pictures most are painting.

There are good times coming but not before it gets worse. I personally believe it will be several years before it gets better. My guess is, it will be 5 - 8 years before the situation improves.

[dawnwil]

I think prices have been firming up from March 2001 to Jan 2002 and rising since then. Man there were some wild deals around 2 years ago. prices have been rising hard lately in Sosua-Cabarete.

Scott posting on Dawns dime on the internet

[twhitehead]

Have Prices further east gone up as much as Sosua area - by further east I mean Cabrera, Playa grande, San Juan area...thanks Tom

[Riu]

Harmony, I partially agree with your point. Keep in mind that the economic slowdown has been felt at a global escale. Even countries as economically fit as the U.S. have been having problems. It takes time for countries to recover. It is a business cycle. Economies cannot grow continually. Every 10 or more years, you will see economies take a downturn and eventually come back up and expand. It is extremely hurtful for the D.R. because its economy is not a powerhouse. D.R. economy is largely dependant on U.S. 85% of the D.R. export are destined for the U.S., 92% of electricity is generated by fossil fuel (oil), and the economy is largely dependant on tourism which has slowed because of global economic conditions. The government centainly has not helped the D.R. The policies needed to help the country seem not to be in place and that also contributes to the country's problems. But like anything else, everything that goes up, must come down. I do believe it will get better once global economy picks up again as is evident with major economies which are seeing improvements across the board in their ecomic outlooks. Also, when econimies go south real estate go north. U.S. real estate prices are out of control. In the Tri-state area of NY-NJ-CT the average home price is $500,000 in a not so desireable neighborhood, taxes are incredibly high and the property itself is falling apart. In short, I think the D.R. will recover.

[Escott]

Originally Posted by twhitehead

Thank you Rocky, Tom and Larry for this information, it is very much appreciated. Do you feel that the boom on the North Coast will be limited to Sosua/Cabarete area? Or will it spread further east as this area becomes expensive?

Got an answer to my other question ref Allegro Playa Grande being closed again. Why is this resort not booming with its wonderful golf course and gorgeous beach????

Although I am not a duffer I am going by what friends have told me. Playa Grande is in pretty bad shape and needs lots of work. It is also far from the Airport and not 8 minutes away like Sosua is. I think prices will be on the upswing along the whole north coast with most and fastest appreciation closest to the airport but spreading east and west.

I think the prices firmed up in March of 03 and started hitting hard by June and rising ever since almost on a daily basis. I hear about new deals just about every week in the 12-15 million dollar range and see so much construction it feels like it has boom writen all over it. I havent seen anything this exciting since the early 80's in NY State in regards to appreciation of real estate. We are in my opinion in the early stages of an up cycle.

I say this as a buyer and not a seller trying to buy at the same levels I was buying at in 03' which is not possible although I still try hard to.

I retired from the Real Estate business after 30 years in NY State 70 miles North of NYC in the New Paltz/Woodstock part of the state. After 9-11 things started exploding in NY real estate market and other markets as people were seeking a safe haven and a place to escape to.

I never planned on doing anything with real estate again but the opportunity just drove me nuts and it has paid off.

I hope this helps you but this is just my 1 peso.