When blows out the "Condominium-bubble" in the area of Cabarete ?

financial analyst

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The US real estate bubble blows out with a big bang the last months. The buildings of private houses crashes since around one year. The old FED-Pr?sident Mr Greenspan said 2 times in the last weeks that he fears also an economic recession.

In the area of Cabarete also are many signs for a Condominium-bubble:
1. The last 1 or 2 Jahr were built around 5 times more Condos than the hole 10 years before.
2. On around every second corner starts a new Condo-project.
3. Around 99% of all new buildings are Condos.
4. The prices have grown around 4-5 time higher then before 10 years and are for an developing country of the lower level like the D.R. very high.
5. Many speculators are in the market and buying with credits, the think they can make the fast money.
6. Cabarete has now more real estate brokers then supermarkets
7. Many Investors think that they can rent the Condos easy on the other side big hotels like the Barcelo are closing and were distroyed because the have no guests.

For me the question is only when the bubble blows out.
 

Tamborista

hasta la tambora
Apr 4, 2005
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Mister Financial Analyst:

So how do we short the Cabarete Real Estate Market?
It's not like we can trade it like a REIT on The NYSE.

tambo'
 

johne

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Jun 28, 2003
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Spoken like a true buyer

The US real estate bubble blows out with a big bang the last months. The buildings of private houses crashes since around one year. The old FED-Pr?sident Mr Greenspan said 2 times in the last weeks that he fears also an economic recession.

In the area of Cabarete also are many signs for a Condominium-bubble:
1. The last 1 or 2 Jahr were built around 5 times more Condos than the hole 10 years before.
2. On around every second corner starts a new Condo-project.
3. Around 99% of all new buildings are Condos.
4. The prices have grown around 4-5 time higher then before 10 years and are for an developing country of the lower level like the D.R. very high.
5. Many speculators are in the market and buying with credits, the think they can make the fast money.
6. Cabarete has now more real estate brokers then supermarkets
7. Many Investors think that they can rent the Condos easy on the other side big hotels like the Barcelo are closing and were distroyed because the have no guests.

For me the question is only when the bubble blows out.
Just returned home early from a St. Paddy's day party to a enjoy a good laugh with your posting.The reason I am laughing is this is such an old style of "bottom fishing" Why did you select Cabarete as a place you would like to buy/live? (as I don't believe you have no interest in it)Do you really think a one man campaign will be effective in bringing the market down ans permit you to buy at your price.
Oh well, pleasant dreams my friend---let me know when "the bubble blows out" (aka -the bubble bursts)
 

Ladybird

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John I think you have celebrated a little too much as this is evident from your response. I have been dealing in property for 25 years and I predicted about 1 year ago that we would see a collapse in the market in general. Its happening with a slow bang. Cabarete is overloaded with new projects and so is Sosua. The market cannot sustain this growth. There are less buyers than 2 years ago and yet idiot constructors carry on. We have already begun signs of recession with more and more people out of work. Those developers that followed my advice have not been hit too hard, but the others will learn. Already we have many owners trying to sell their properties
without success. Look at the amount of properties up for sale.
A contact at the airport said this season they had 600 less flights from Canada alone coming in. And we all know that the housing market in the USA has hit big problems, this follows on, so the snowbirds arent coming in.
Ask the restaurant owners and look at the bars/clubs in Sosua. Cabarete has the young crowd to support the social scene but most of these rent short term. There wont be the clientele to rent all these properties being constructed and the owners will be hit hard financially - Wallop!
Prices have already increased on The Cap since wind of 'The Trump' coming in to construct was released, so a lot of new investment is not going to come to the North Coast.
 

Lambada

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Mister Financial Analyst:

So how do we short the Cabarete Real Estate Market?
It's not like we can trade it like a REIT on The NYSE.

tambo'

Do we short it, Tambo, or do we ignore it? ;) For those of us not involved in real estate, already owning (but not in Cabarete), and not wishing to sell our homes the same cyclical rules as have always operated will probably still apply. So what financial analyst & Ladybird are referring to is a cull & that's probably no bad thing, the 'action' moves to another area (like Punta Cana) and the cycle begins all over again in the original area. Is there a financial term for chasing it as opposed to shorting it.............? ;)
 

financial analyst

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frist: sorry for my incorrect english, it`s not my motherlanguage.

Tamborista + johne you are wrong when you think I want short the market. I`m living since more then 10 years in Cabarete and for these prices I never would buy anything. People how buy`s for these prices have to much money or know nothing about this country or both.

"bottom fishing" (the joke of the week). The bottom ly`s miles under the actual prices. "Top selling" or "searching for the last fools" is the better discription. The same as in the technology-bubble on the stockmarket in 1999.

Please tell me whats wrong in my frist coment???
 

Ladybird

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Do we short it, Tambo, or do we ignore it? ;) For those of us not involved in real estate, already owning (but not in Cabarete), and not wishing to sell our homes the same cyclical rules as have always operated will probably still apply. So what financial analyst & Ladybird are referring to is a cull & that's probably no bad thing, the 'action' moves to another area (like Punta Cana) and the cycle begins all over again in the original area. Is there a financial term for chasing it as opposed to shorting it.............? ;)

History has shown in other countries that the run down or undeveloped areas are the place to invest, but you are right that the cycles do seem to operate, however I would never invest in Sosua and Cabarete at this time, they are well overpriced now and wont see a good return on new investment.
One important point here is that a lot of the new constructions offer finance so it will take a while for the bang of the bubble when the pain is felt. Many of these constructors have no experience in the international property market which is a totally different ball game to any domestic market.
Donald Trump knew exactly what he was doing on his pre-emptive press release, hence all the new investment money flooding in before hes laid a
brick, but hes laid the foundations!!! to protect his turf financially.
 

Lambada

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Your English is fine (a lot better than my German :) ). The market always operates on what people are prepared to pay - whether that is a common sense price or a ludicrous price & like you I've seen a few of the latter........ Sometimes I have a really good laugh at the prices quoted on some of the internet websites, particularly of realtors no-one has ever heard of running some fly by night operation from their living rooms.

But the price has nothing to do with the value or the worth, does it?

Ladybird, I wouldn't have invested in the areas you mention at any time, but that's for a whole lot of different reasons.........
 

Ladybird

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frist: sorry for my incorrect english, it`s not my motherlanguage.

Tamborista + johne you are wrong when you think I want short the market. I`m living since more then 10 years in Cabarete and for these prices I never would buy anything. People how buy`s for these prices have to much money or know nothing about this country or both.

"bottom fishing" (the joke of the week). The bottom ly`s miles under the actual prices. "Top selling" or "searching for the last fools" is the better discription. The same as in the technology-bubble on the stockmarket in 1999.

Please tell me whats wrong in my frist coment???

Nothing wrong with your analyst, its the fools investing now that have seached too late.;)
 

DavidZ

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Have any of you people who believe Cabarete's bubble is about to burst heard of George Coutu? Ocean Dream, Ocean One, Harmony, and Millenium are all beautiful projects, all marketed to International Clientele and mostly sold out...

Cabarete East sold out

The Victorian by Juan Perdomo...close to sold out

Novus Mare...just talked to someone from NY who flew here just to look at the project...and buy a condo...

Have you not heard about the US Baby Boomers who are just now, and for the next 30 years, starting to retire? They're not moving to Florida like they used to, and I doubt the Northeasterners are going to retire in the Northeast...Costa Rica is still going strong after 10 years of steady growth...through good economies and bad...and they're running out of beachfront...

Try buying a nice beachfront condo in the rest of the Caribbean for under $500K... you'd be hard-pressed to find one...

The prices in Cabarete...and Sosua have risen dramatically over the last few years, and tourism has slowed down this year (in conjunction with the new passport requirements), but the majority of those interested in retiring or snowbirding here are probably smart enough to have their passports ready...and can still afford the North Coast...unlike Cap Cana, Roko Ki, Punta Perla, etc...
 

johne

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ni buyer or seller

John I think you have celebrated a little too much as this is evident from your response. I have been dealing in property for 25 years and I predicted about 1 year ago that we would see a collapse in the market in general. Its happening with a slow bang. Cabarete is overloaded with new projects and so is Sosua. The market cannot sustain this growth. There are less buyers than 2 years ago and yet idiot constructors carry on. We have already begun signs of recession with more and more people out of work. Those developers that followed my advice have not been hit too hard, but the others will learn. Already we have many owners trying to sell their properties
without success. Look at the amount of properties up for sale.
A contact at the airport said this season they had 600 less flights from Canada alone coming in. And we all know that the housing market in the USA has hit big problems, this follows on, so the snowbirds arent coming in.
Ask the restaurant owners and look at the bars/clubs in Sosua. Cabarete has the young crowd to support the social scene but most of these rent short term. There wont be the clientele to rent all these properties being constructed and the owners will be hit hard financially - Wallop!
Prices have already increased on The Cap since wind of 'The Trump' coming in to construct was released, so a lot of new investment is not going to come to the North Coast.

No-didnt drink very much at all as I am leaving for the airport in a few hours on my way to S.D.. So you see,my dear, it's possible, if one doesn't read carefully they can be misled. My posting did not support buying or selling-it was mearly my thoughts (don't know if correct or not) about one man's way of dealing, searching, negotiating, etc.Couldn't care a rat's arse less about prices of properties in Cabarete.
Good luck with your property/investments etc.
Ta ta, need to pack now
john
 

KeithF

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FWIW... I don't think Cabarete will be hit hard (ie 'bubble bursting) partly for the reasons David mentioned, partly because Cabarete has a 'unique selling point', in that kite surfing can't move easily away from the town. Kite surfing is a sport that is quite expensive, so many of the people who travel there are actually younger and better off. The knock on effect is a 'vibrant, attractive' town.

However, I do think the forthcoming property crash in the US will result in a cooling of the Cabarete market, so anyone expecting a rapid growth on their investment is going to be disappointed and that they should be content with a much slower growth for the next two or three years.

That's what I'm working on anyway...
 

Abuela

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May 13, 2006
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Lifestyle vs real estate investment

DavidZ is correct more than 60% of recent real estate purchases,condos &villas are lifestyle choices of baby boomers not flippers trying to turn around real estate profit. The real estate bubble bursting in the US is not the same subject as real estate in the DR. The old apples and orange comparison does not compute.
 

KeithF

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DavidZ is correct more than 60% of recent real estate purchases,condos &villas are lifestyle choices of baby boomers not flippers trying to turn around real estate profit. The real estate bubble bursting in the US is not the same subject as real estate in the DR. The old apples and orange comparison does not compute.

Although, as I've mentioned in another thread, if the baby boomers are buying with capital raised against their existing property. If the price of property in the US (or UK for that matter) drops, many people may find themselves with negative equity and therefore sell the 'holiday home' or other boomers may not have the same level of borrowing available to them. That would have a knock on effect in the Dom Rep IMO.
 

financial analyst

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To all the real estate brokers, why don`t anyone anser my question what`s wrong with my 1. commend ? I tell you why, nothing! Anyone how understands a little bit of markets and economy can see there are really signs of a bubble.

DavidZ
Have any of you people who believe Cabarete's bubble is about to burst heard of George Coutu? Ocean Dream, Ocean One, Harmony, and Millenium are all beautiful projects, all marketed to International Clientele and mostly sold out...

Cabarete East sold out

The Victorian by Juan Perdomo...close to sold out

DavidZ, Ocean Dream. Ocean one, Cabarete Palace are one of the reason why lesser tourists comes. I know many tourists which were coming every year and so I met them on the beach. After building all these blocks the talk to me "oh my god what happens here, they cover all with concrete!" Since then I`ve never seen them again. Cabarete looses his Caribbean feeling more and more, because blocks like these have nothing to do with a real Caribbean feeling!!

DavidZ, most of spoken projects are long enough in the selling process. And another thing is that insider or good informed people the tricks of the sellers know. When a project is starting to sell 1/3 - 1/2 is called sold and when the rest is really sold, then these 1/3 - 1/2 are starting really to sell.
 

Ringo

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Mar 6, 2003
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My 2 pesos worth.

I've been coming to the North Coast for over 12 years and have some experience in Real Estate. I studied, if you will, Sosua and Play Chiquita and thought that it would become a multi national retirement community. Started buying 10 years ago. Ocean front @ $20. M2 US; 2nd/3rd lots back at $12. Intown commercial "all most free".

Same land is now +-$200. M2 ocean front, $120 2nd/3rd and commercial is 3 to 4 times the price. However, I do not see the land or the villas moving as quickly.

US home sales prices have dropped and has to be considered. The other is, as pointed out before, an almost(?) OVER DEVOLPMENT that the infrastruction can not support. It's a problem just driving down a street, find parking? Stores of all sorts have raised prices (supply and demand) but not expanded goods or service. Carry this over to all basic wants of retiring people from all over that expect the same services and service that they are use to from back where they came from.

In Sosua, the All Inclusives do well with the inexpensive 2 week holiday that bring in the inexpensive tourist looking for... not investing other then booze, girls and drugs (supply and demand). Investors and new home owners look at the whole situation and socio economics of an area and try to figure where there is a balance of what is exceptable.

Would I buy more on the North Coast? NO. I'm selling now. Do I think prices will go up? YES; but only after some things are cleaned up, and others expanded.