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

[aegap]

There's a perfect explenation for it: home builders got tired of sitting on their "inventory" so they lowered priced, which created a larger demand- hence the higher number sold. It's most likely artificial, and the numbers in the coming months will probably confirm that.

It ain't really a 'crisis' though. It probably can be explained by the Feds taking out and/or reducing the encentives they put into the market at the begining of the Bush administration. They are doing so because they like how the overall economy is doing. If and when they feel things may badly go south they'll put them back in.

 

[batich]

With all due respect it is not strange at all but perhaps worded incorrectly as statistics are a tad misleading

The articale I read was that for the month of April there was a record number of houses sold for that month , however at a lower price which is 11% lower than last year for the same of April.

The Median
The Median is the 'middle value' in your list. When the totals of the list are odd, the median is the middle entry in the list after sorting the list into increasing order. When the totals of the list are even, the median is equal to the sum of the two middle (after sorting the list into increasing order) numbers divided by two. Thus, remember to line up your values, the middle number is the median! Be sure to remember the odd and even rule.

That is the definition of Median

THank you for the great professional explanation!

Now at least I know that $380 - 500G US for a house in Sosua /Cabarete area without no infrastructure, nor security nor reliable electricity nor medical or fire or police imergency is a very cheap price.


I have another question as soon as you are so much related to RE/building profession. All local houses are built with practically pure concrete. Are there in existence in DR any norms regarding asbestos content in this building material? And are they enforced?

! Gracias!

 

[globalmike295]

THank you for the great professional explanation!

Now at least I know that $380 - 500G US for a house in Sosua /Cabarete area without no infrastructure, nor security nor reliable electricity nor medical or fire or police imergency is a very cheap price.


I have another question as soon as you are so much related to RE/building profession. All local houses are built with practically pure concrete. Are there in existence in DR any norms regarding asbestos content in this building material? And are they enforced?

! Gracias!

I am not a GC but Asbestos abatement has been under way for many years, in the U.S. It is a carcinogen and should not be used.

If you are trying to say the Real Estate is overpriced, I would concur and since this thread is about weather the bubble is about to burst, I welcome the next caller......the lines are open !

We have Mabelle on the line.......

 

[PabloPaul]

I love how you guys talk about this like we're in the US. That's exactly why the RE prices are so sadly and ridiculously overpriced.... you drove them up on US values, standards, pricing, hell you even didn't trust the country's own paper and sold in US dollars too. One problem. This NOT the USA.
Therein lies the dilemma.

 

[globalmike295]

I love how you guys talk about this like we're in the US. That's exactly why the RE prices are so sadly and ridiculously overpriced.... you drove them up on US values, standards, pricing, hell you even didn't trust the country's own paper and sold in US dollars too. One problem. This NOT the USA.
Therein lies the dilemma.

I agree 100%

Everyone has opinions and I was just trying to address a few.

 

[johne]

With all due respect it is not strange at all but perhaps worded incorrectly as statistics are a tad misleading

The articale I read was that for the month of April there was a record number of houses sold for that month , however at a lower price which is 11% lower than last year for the same of April.

The Median
The Median is the 'middle value' in your list. When the totals of the list are odd, the median is the middle entry in the list after sorting the list into increasing order. When the totals of the list are even, the median is equal to the sum of the two middle (after sorting the list into increasing order) numbers divided by two. Thus, remember to line up your values, the middle number is the median! Be sure to remember the odd and even rule.

That is the definition of Median

Not worded incorrectly at all/ Sales up 16 %. Prices down 11%. Read the same data. Moving that stuff down the road rapido! BTW-I believe that was NEW Home sales.
john

 

[Lambada]

I love how you guys talk about this like we're in the US. That's exactly why the RE prices are so sadly and ridiculously overpriced.... you drove them up on US values, standards, pricing, hell you even didn't trust the country's own paper and sold in US dollars too. One problem. This NOT the USA.
Therein lies the dilemma.

Mabelle here...........
You think it's a dilemma PabloPaul? You see, I simply wouldn't pay those sort of prices and certainly not to live near a whole lot of other foreigners. But I've been here 15 years & I don't think in UK prices any more, I think in DR prices and DR options. There are always suckers who think they're getting a steal. But people won't be told, so............what can you do? If they think they're getting a bargain, I suppose that keeps them happy........and possibly delusional. :laugh:

 

[PabloPaul]

Not everyone is so smart. Let's forget about the part where retirees will be soon flooding and inflating the market even more. Good luck, Dominicans...
getting priced even more out of their OWN country.

 

[aegap]

The prices of properties in Guachupita, as well as water front and water view properties in La Cienaga will be just fine, thankyouverymuch.

 

[financial analyst]

The National Association of Realtors (NAR) expect a decline of selling new houses in US in 2007 of 18,2%. Lawrence Yun, chiefeconomist of the NAR said the short view of the market is desolate.

 

[chola1978]

Is there a chamber of comerce Cabarete like la camara de comercio de Santiago? Cuz if you guys that own property in cavarete get together and propose some urban planing things might not go as bad as a burst. It was the worst of times it was the best of times.
Union medical is willing to have a clinic their , not enough permanent resident yet but they are looking in to. petition Jumbo to open a supermarket I believe they are own by Cuesta people. Be proactive in your urban development and you might have some success

 

[PabloPaul]

Now, that's a great idea!

 

[financial analyst]

It seems that the DR-RE-market follows the US market. Yesterday I spoked with an RE-agent and he told me that Condo selling are to spiral downward and is now much more worse than 1 year ago. The US National Association of Home Builders index (NAHB) scored the lowest level since 1991. US housingstarts in 5/07 are 24,2 % lower than 5/06.

 

[dreamsource]

personal agreement.

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.

My experience as a newbie is obviously limited. I can only say that we are buying in at a modest expense, with the hope of some rentals, but the vision of a winter home in a place we have come to enjoy very much. I have met others from our area who look for the same. I guess we (baby boomers, I guess) are value investing, not profit investing. Even if things are overvalued by some standards, we feel the investment is reasonable and the risk very limited when you can get a nice place for less than 100,000 US.

Happiness to all.

 

[J D Sauser]

It's about sand runing out

Cabarete is about location, location, location, there is not much else, is there?
To some, the beautiful beach is THE location.
The more condos SOLD, the rarer the location becomes, or better said, the chances to newcomers to live on that location becomes, so the prices go up. It's not such a large place so opportunities become limited quickly.
Prospects see or feel that and sense a need of buying NOW before the opportunities run out... and because of that, they will get that feel even much more so tomorrow when space and opportunities appear to become even fewer and thus more desirable and expensive.
As long as nothing bad happens (tsunami and flooding, quake, storm damage, excessive crime and dangerous political instability, to mention a few of the possible culprits) this market hypes itself to the bitter end... and even then, when there will be no more room to go, if the town really develops into a livable place for the reached price standard... existing condo re-sales and trades may continue to go up. How high? Well, that will depend on how other national and comparable international locations perform and how Cabarete will be able to compare to it (infrastructure, safety, connections etc.).
Return on the investment? Here? "Fogitaboutit"! In locations like these this has been historically prooven to be wishful thinking of the misguided and mislead only. It does not work in many locations with the similar attractive like the Floridian Coast or soon didn't work on the Spanish Mediterranean Coast and sure does not work here (in most cases). Except maybe if you factor your hopes of property appreciation into the calculation too (which is not really "earning"... salesmen BS!)... and still then, the buyers will have to put up with a less than favorable P/E rating.

IMO, the North Coast DR market is a very small market... we are talking about a few small towns and villages here, appealing to buyers from all over the globe, like the US, Canada, England, Germany, Switzerland and now a few rich ones from the ex-Soviet States. There are much more potential buyers looking than properties and future expansion possibilities available on prime locations like Cabarete beach... even if one of the buying buying countries suffers a hold back for a while because of problems with their own economy.

Just my opinion... J-D.

 

[johne]

and a good opinion at that

Cabarete is about location, location, location, there is not much else, is there?
To some, the beautiful beach is THE location.
The more condos SOLD, the rarer the location becomes, or better said, the chances to newcomers to live on that location becomes, so the prices go up. It's not such a large place so opportunities become limited quickly.
Prospects see or feel that and sense a need of buying NOW before the opportunities run out... and because of that, they will get that feel even much more so tomorrow when space and opportunities appear to become even fewer and thus more desirable and expensive.
As long as nothing bad happens (tsunami and flooding, quake, storm damage, excessive crime and dangerous political instability, to mention a few of the possible culprits) this market hypes itself to the bitter end... and even then, when there will be no more room to go, if the town really develops into a livable place for the reached price standard... existing condo re-sales and trades may continue to go up. How high? Well, that will depend on how other national and comparable international locations perform and how Cabarete will be able to compare to it (infrastructure, safety, connections etc.).
Return on the investment? Here? "Fogitaboutit"! In locations like these this has been historically prooven to be wishful thinking of the misguided and mislead only. It does not work in many locations with the similar attractive like the Floridian Coast or soon didn't work on the Spanish Mediterranean Coast and sure does not work here (in most cases). Except maybe if you factor your hopes of property appreciation into the calculation too (which is not really "earning"... salesmen BS!)... and still then, the buyers will have to put up with a less than favorable P/E rating.

IMO, the North Coast DR market is a very small market... we are talking about a few small towns and villages here, appealing to buyers from all over the globe, like the US, Canada, England, Germany, Switzerland and now a few rich ones from the ex-Soviet States. There are much more potential buyers looking than properties and future expansion possibilities available on prime locations like Cabarete beach... even if one of the buying buying countries suffers a hold back for a while because of problems with their own economy.

Just my opinion... J-D.[/quot

Well thought out post. I don't have an axe to grind as I am not interested in a DR investment at this time.
Let me add to your post-as small as a market may be, when you sell you only need ONE buyer. Much like love --there's somebody out there for everyone.

 

[cabaretewilliam]

typical false misguided prophets

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.

So, all the false prophets of the past 3 years - the bubble has not burst as you predicted (ladybird is already out by three years) and condos have doubled in the past two years. You people, like so many, do not understand demograhics. You do not know or do not understand the implications, 87 MILLION baby boomers will retire in the next 20 years starting NOW. These people do not like Florida and want the Caribbean. 20 million of them can afford to move south and many of them will. The DR is still, in 2008, half the price of other islands, for average villas and condos.

DUH.

Go figure. The prices will rise until we match other islands. The demand will come from the 87 million plus the new money in the former USSR. All you the sky is falling types have been wrong for three years in a row. People who ignored you 3-4 years ago have already doubled their money.

And guess what. I knew, and so did many others, 5 and 10 years ago that oil would go from $30 a barrel to $135 and $200. How?

Simple. Demographics. The same way I know prices will go up and the condos will sell. We knew oil was going up because the new middle class in India and China want the same oil we want and are bidding for it. Demographics. It is all so boringly predictable. The DR will see prices go up until they are the same as lesser islands....about double 2008 prices. Then they will still go up but at the same pace as other islands.

 

[mike l]

So, all the false prophets of the past 3 years - the bubble has not burst as you predicted (ladybird is already out by three years) and condos have doubled in the past two years. You people, like so many, do not understand demograhics. You do not know or do not understand the implications, 87 MILLION baby boomers will retire in the next 20 years starting NOW. These people do not like Florida and want the Caribbean. 20 million of them can afford to move south and many of them will. The DR is still, in 2008, half the price of other islands, for average villas and condos.

DUH.

Go figure. The prices will rise until we match other islands. The demand will come from the 87 million plus the new money in the former USSR. All you the sky is falling types have been wrong for three years in a row. People who ignored you 3-4 years ago have already doubled their money.

And guess what. I knew, and so did many others, 5 and 10 years ago that oil would go from $30 a barrel to $135 and $200. How?

Simple. Demographics. The same way I know prices will go up and the condos will sell. We knew oil was going up because the new middle class in India and China want the same oil we want and are bidding for it. Demographics. It is all so boringly predictable. The DR will see prices go up until they are the same as lesser islands....about double 2008 prices. Then they will still go up but at the same pace as other islands.

If this so called booming real estate market is bursting at the seams, then why are so many realators closing shop and picking mangos for a living ?

 

[Ringo]

If this so called booming real estate market is bursting at the seams, then why are so many realators closing shop and picking mangos for a living ?

Everyone in the real estate and tourist business likes to tell everyone how great things are. (Let us not scare anyone away.) Sosua is filled with expats... all that live here and depend on tourist and new people to buy and invest.... and they are few.

The Dominican Republic is in the same situation that most of the world is in meaning the money is tight and spending is down.

Regards, Ringo

 

[planner]

On another note, seems to me that many people get into real estate or other ventures because they have moved here and can't figure out what else to do. They think it is "easy" to sell real estate because some professionals make it look easy.

The reality is they blow out of the business as fast as they blow in. But that is not just about real estate, there are a vast number of other areas as well. How many ex pats move here to open a bar - when they have no idea how to run a bar let alone a bar in this country. Just because they frequent a bar doesn't make them bar owners..... But I digress.....