Real estate, overpriced or underpriced?

liam1

Bronze
Jun 9, 2004
843
30
28
looks like nowadays you can't buy anything decent on The North Coast for under 100.000 USD, and that's just the apartments, the houses are well over 200.000 USD. when you compare those prices to other Caribbean countries it's still a deal, but on the other hand, when you see the roads you gotta use to get to your residence, no real fire department, no fast ambulance service, corrupted police, the education system, very difficult conditions for starting a business, and so on, you're not getting much for your buck. you're getting great weather year round, and that's about it.

new developments are being started daily, and looks like they're selling well, i'd like to hear from the people living in DR full-time, do you expect the prices to keep going up, or the market to cool down a bit. or more specifically, to buy or not to buy right now. i'm thinking of buying an apartment in the 100-150K range, but not sure whether to buy now or maybe wait a year or so and see how the elections play out, and what happens with the peso.

all replies are appreciated. thanks.
 

manunut

New member
Nov 17, 2006
272
2
0
looks like nowadays you can't buy anything decent on The North Coast for under 100.000 USD, and that's just the apartments, the houses are well over 200.000 USD. when you compare those prices to other Caribbean countries it's still a deal, but on the other hand, when you see the roads you gotta use to get to your residence, no real fire department, no fast ambulance service, corrupted police, the education system, very difficult conditions for starting a business, and so on, you're not getting much for your buck. you're getting great weather year round, and that's about it.

new developments are being started daily, and looks like they're selling well, i'd like to hear from the people living in DR full-time, do you expect the prices to keep going up, or the market to cool down a bit. or more specifically, to buy or not to buy right now. i'm thinking of buying an apartment in the 100-150K range, but not sure whether to buy now or maybe wait a year or so and see how the elections play out, and what happens with the peso.

all replies are appreciated. thanks.
from some well informed sources they are going to go up and up.
if you are in the know you can purchase houses and apts STILL for quite a bit less than the nbrs you quoted.
need more info pm me.
 

Tay

DR1 Property Center
Jun 4, 2006
7
0
0
dr1.com
My thoughts are, that on the north coast there are a glut of condos that are currently being sold, unless they are something special there will be too much competition amongst re-sales in 2-3 years time when all those association fees get too much to handle.

On the north coast, a villa, especially in a gated community is the way to go, that or land.
 

jackieboo

On Vaction without a return ticket!
Mar 18, 2006
362
0
0
I think the market will continue to raise however not as fast as it did over the past couple of years.

Condo's have been selling well because villa's are outpricing themselves out of the market. The issue is how many people are there in north america or europe for that matter than can afford to buy (in cash) a $500,000 to $6,000,000 property?

If viable and secure financing becomes available then I believe that only then will the villa market be able to take off again.

JMHO-
Jack
 

KeithF

New member
Jul 9, 2006
395
2
0
www.cabarete.org
I think that the real estate in DR is going to be very closely linked to that of the US. In another thread Cobraboy posted a relatively positive view in reply to my asking about the situation in the US...

Coming from a family of real estate investors, I don't know where the 1% interest rate in the US came from. The ONLY place I see it is "teaser" rates, with an adjustment to actual rates coming within months. And why someone would qualify for a high LTV at the upper income limit with a teaser rate is asking for financial disaster.

The teaser rates are a function of competition among lenders. Nobody ever gets a 1% fixed rate 30 year mortgage. Doesn't happen. Perhaps there is not as much competition in GB for mortgage $$$. Maybe the supply/demand equilibrium is quite different there.

There ~may~ be a slump in the US housing market if/when interest rates push upwards. But, IMO, it would be short term. Keep in mind the ever increasing population drives the demand side of the equation; it is rising at a faster rate than the increase in housing supply. As long as that that remains constant, housing values won't drop in MOST markets long term.

There are very few mistakes one can make in real estate that can't be fixed with time. Just don't buy in declining inner-city neighborhoods, residential or commercial.

The problem is, I've been reading quite a lot that suggests the situation in the US is worse than Cobraboy's response eg today... New Century mortgage lender going bust after "default levels on sub-prime mortgages hit a seven-year high"

In effect, is it likely to be a 'bubble bursting' or a short 'slump' and settling period. Much of the US economy over the last few years has been based upon people borrowing against the capital appreciation of their primary home. I would anticipate that this has also been a primary factor behind how people have raised the money to buy a second home in the Dom Rep.

If interest rates increase (as many predict they will) and the property market bubble bursts (as the doom sayers are predicting) then millions of US citizens will find themselves in negative equity (owing more on their home than they can sell it for). At this point repossessions increase and property prices crash further, a cycle that could take four or five years (at least) to come out of.

At that point, the baby boomers who have one home have a choice, bail out by selling up and moving full time to places like the Dom Rep or downsize at home. Those already with two properties can sell in DR to prop up their position back home. With pensions & health care taken into account, plus 'better the devil you know', my guess is most would sell and stay 'home'.

Thus, less equity on property to borrow against reduces the amount of new people buying plus more people forced or choosing to sell second properties equals increased supply and decreased demand. That means prices slump in the DR.

However... [hopefully] Cobraboy is correct and the situation in the US housing market won't be too extreme and will be temporary. And perhaps the Central Bank will manage affairs effectively. You never know, it may even be that Bush has a great idea for running the economy? (oh **** we're doomed!)

So, having written a novel again, the short answer is,

I don't know if real estate is overpriced or underpriced!

I do know that if you wait too long you can miss the boat but if you jump in too soon you can catch a cold! If you are borrowing against your existing property to buy in DR (or anywhere else) only do so if you are sure you can still meet the repayments for both without anyone renting your investment out and in the knowledge that if there is a downturn you might not be able to move house etc for five to ten years if you have to weather the storm*.

And get used to watching the US economy closely and join me in clenching your buttocks when it moves suddenly...

*Catching a cold, missing the boat, weathering the storm... welcome to clich? corner