Panama Real Estate In Down Cycle

Since early in 2008, any conversation about Panama real estate has been centered on the current down market. The big question then as now; “How deep? How long?

In the early going, some bet big on the notion that Panama’s super hot real estate economy might be immune to the sales malaise taking over many of the world’s markets. Time has proven this line of thinking was wrong.

So is the current down market a sign that Panama - for that matter the world’s—real estate industry is down and out? To find the answer to this all you need to do is answer three additional questions. First; Are the people of the world going to stop having children? Second: are they going to need a place to live? Third; Has God cranked some additional earthly real estate without anybody noticing? If the answer to these three question is “yes”, then the answer to all of the doomsdayers is—”Take it down the street ya’ bum!”

Markets correct from time to time. This is a basic law of economics. What goes up must come down, just that simple unless the “what” happens to real estate. You can turn the clock back fifty years, and you won’t find a cycle in which housing prices ended a ten year cycle below where they were at the start of the cycle. The only exceptions to this rule are found in nations with unstable governments that actually suffer a top to bottom collapse of their economies and currencies. Panama managed to maintain a relatively stable economic through many political upheavals.

It is a safe bet that if you buy a commodity that is limited in supply and unlimited in price and demand, when it is on the bottom of its ten year cycle, your horse will be running on the inside rail.

Panama is seeing the same kind of contractions that markets around the world have seen. Investors have stepped back from real estate, but they are not gone. They are the smart money waiting in the wings for signs that we are on or near the bottom. This smart money will be back for the reason mentioned above.

The global credit mess is easing. Virtually every government in the civilized world has come to the post with trillions of whatever they call their money to insure that the world does not see a repeat of the 30’s.

Sure new units still exceed demand, but that is largely because buyers like investors are waiting for a sign that when they buy, a flat market is the worst that will lie ahead of them. When the market turns, a tidal wave of pent up demand turn it in a hurry.

Panama is ideally positioned to return to the days of a booming real estate economy. This nation is investing in massive infrastructure improvements. Foreign ex-pats continue to flow into the country in search of a great climate, a low cost of living, and a stable, security oriented government.

When compared with other Central American options such as Venezuela, Ecuador, and pricey Costa Rica, Panama is a stand out amongst its neighbors.

The day of building in the certainty that someone will inevitably come to buy are over. This said, the long term outlook is as sunny as our Panamanian skies.

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