Tuesday, November 6, 2012

Panama real estate and the United States: An 18 month cycle

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Those that know Panama know that ?When the US Sneezes, Panama usually catches a cold?.? That?s been the case for the last decade, with trends in the US generally hitting Panama?s shores 12-18 months later.? The same can be seen in the real estate market?s movement.? Panama peaked in early 2008, roughly 18 months after markets in the US saw 10-year highs.? Shortly thereafter, US prices began to plunge as we saw prices bottoming out locally and holding around the first quarter of 2010.? Again, 18 months later.

Prices in Latin-friendly US hotspots such as Miami and New York began trending upwards in the 2nd quarter of last year, or roughly 17 months ago.? Might this be another sign for an uptick in real estate prices in Panama City?s market?

From a recent CNN Money piece, ?Signs of recovery have been evident in the recent pick ups in home prices, home sales and construction.? Foreclosures are also down and the Federal Reserve has acted to push mortgage rates near record lows.? But while many economists believe this emerging housing recovery will produce only slow and modest improvement in home prices, construction, and jobs, others believe the rebound will be much stronger.

Barclays Capital put out a report recently forecasting that home prices, which fell by more than a third after the housing bubble burst in 2007, could be back to peak levels as soon as 2015. ?In our view, the housing market had undergone a dramatic over-correction during the prior five years, resulting in pent-up demand for housing purchases that would spark a rapid rise in housing starts,? said Stephen Kim, an analyst with Barclays, in a note to clients.

In addition to what Kim sees as a big rebound in building, he?s bullish on home prices, expecting rises of 5% to 7.5% a year

About the Author

Kent Davis, founder and head broker at Panama Equity real estate, has been widely quoted in publications such as Time Magazine, Capital Financiero, and The Panama Guide for his unabashed views on the Panama real estate market. Panama Equity is regarded as one of the most active real estate agencies in Panama and Kent?s articles, reports, and market research projects have been syndicated by press agencies including Bloomberg and the Associated Press. ? Connect with the Author via: Email | LinkedIn | Facebook | Google+

Source: http://www.panamaequity.com/blog/panama-real-estate-and-the-united-states-an-18-month-cycle/

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