By now there is surely not a soul on Earth that hasn’t become aware of COVID-19 and the havoc it is causing on a global scale never before seen. From the millionaire oil company CEO, to the suburban blue collar family of five, to the student in law school working 2 side jobs just trying to afford studies, and even the residents of remote villages in Africa, it would appear that almost nobody has been spared from feeling the impact of this radical pandemic.
The quick appearance and spread of COVID19 and the ensuing actions taken by governments and private entities around the world have left practically every country and its citizens in a state of fear, panic, uncertainty, and financially…. well, screwed. Restaurants, bars, hotels, and other businesses have been required to close doors. Companies providing hundreds or even thousands of jobs have had to suspend daily operation. International travel has come to a staggering halt as majority of countries close the blinds, barricade the doors, and hunker down for this biological war against nature.
All of this and more, means that businesses and companies both small and large are no longer seeing income, yet still have expenses to pay each month. This has led to the laying off of thousands upon thousands of employees around the world, and those who managed to keep their hourly jobs have lost their steady income since they cant go to work and clock in those hours. It’s safe to say that if we were to take one baseball to represent every business and company around the globe that has gone bankrupt or called it quits, we could fill a NFL football stadium with ease. There is no doubt that the world we will emerge into when this catastrophe has come to its end, will appear quite different than the world previously known, in regards to the political, economical, social, and capitalist landscape.
Enough doomsday talk, lets get down to the real purpose of this article. How is all of this affecting a country like Panama, and what does it mean for the country’s real estate market, its sellers, and interested buyers?
Lets start with the basics. I write this article from my home in Panama, which is luckily located in a relatively isolated and tranquil location away from the true madness and strict lockdown. That being said, even here things are 75% paralyzed. Across the country businesses have been forced to close, public offices are shut down, all public travel both land and air has ceased, and hotels are for the most part ghost towns (except for the few tourists who are stuck with nowhere else to go). Stated simply, Panama is going to feel the pain of this one, as will its citizens and premier industries. That being said, a country like Panama will bounce back, and it will do so perhaps much quicker than many other countries due to its relatively small size, impressive GDP, the Panama Canal, and USD currency.
Now for the REAL ESTATE MARKET.
Throughout the previous five years Panama has experienced a slow/down market in general throughout many of its sectors and industries, real estate include. The slowed economy has caused many property owners to decide to sell, and steadily drop their prices in attempt to achieve a sale. So what happens when you take a country that is already experiencing a down real estate market, or a “Buyers Market”, chuck full of “sellers” and then you smack it right square in the nose with a global pandemic and economical crisis? You get one of the best damn investment opportunities to be had for the next decade.
What this means for INVESTORS/BUYERS
If you find yourself with the financial ability to invest in the real estate market of Panama at this time, and you have even the slightest interest to do so, there is no better time to pull the trigger than now. The real estate market of Panama is going to become flooded with a surplus of properties newly available being sold by individuals, or companies which simply can’t survive the impact of COVID19 and the ensuing economic crisis without liquidating their real estate asset(s). Homes, hotels, resorts, restaurant/bars, beach-front lots, large development parcels, private islands, and more will pop up for sale as brand new listings and likely do so at a “priced to sell” number.
Properties that have already been listed on the market for 6 months, 2 years, 5 years, or more will without doubt see huge price drops as the sellers become exponentially more desperate and in need of cash flow to ride out the economic rollercoaster that will occupy the rest of 2020 if not longer. Sellers will be negotiable, and willing to accept offers that under normal circumstances they wouldn’t even look twice at. These however, are NOT normal circumstances.
For those interested in purchasing property in a tropical destination such as Panama, now is the time to play your cards because it will likely be the best opportunity you will ever get to score a piece of paradise for “clearance sale” prices. Keep in mind that since public offices, law firms, etc are all shut down right now, it is nearly impossible to actually close a real estate transaction. However, it is absolutely possible to find your ideal property, and start negotiations with the seller, draft and approve contracts, and have everything ready to go as soon as the buzzer goes off and Panama’s government reinitiates travel, and allows government/public offices as well as private entities to reopen.
What does all of this mean for SELLERS?
If you currently find yourself suffering the impact of COVID19 and its related economic crisis as a seller of property in Panama, my professional and sincere advice to you is this: swallow your pride, look at the situation objectively and realistically, and do whatever necessary to achieve a sale of your property aside from “shooting yourself in the foot” metaphorically speaking. Now is not the time to hold out, hoping that at any moment maybe, just maybe, a buyer will come along who is willing to pay you your exact asking price. We have to accept that due to the current state of the world, and economic fallout we are facing, it is very possible there might not be an interested buyer for our property for the rest of 2020, and maybe even the following 1-2 years. If the thought of your property not selling for two more years puts a knot in your stomach, then the best strategy is to make your property as attractive and accessible as possible right now in hopes that a cashed up buyer looking to take advantage of the down real estate market will see the value in your property and decide to make the investment. Throughout my time here in Panama becoming an expert on real estate and meeting new clients, I have become aware of the trend for sellers to drastically over-value their properties hoping to either get lucky, or atleast have plenty of cushion when it comes time to negotiation. However, to sell your property under the world’s current circumstances, we are going to have to use the opposite strategy, and cut prices as if it were Black Friday. Now I’m not saying you should go and drop the price of your property so low that you lose money and end up filing for bankruptcy 4 months from now, but I am absolutely saying that you should consider what your LOWEST acceptable sale price would be, and make it known to the world that the first buyer to show up with that offer wins.
If you don’t need the money, and you are financially stable and comfortable letting your property sit on the market for the next 1-2 years then feel free to do so, while perhaps lowering your price a small amount to see if any fish bite.
This may sound like the end of the world for sellers, but in fact in could be quite the opposite if you know how to play your cards and change your perspective. There will be a lot of potential buyers looking for opportunities to invest their capital in something more stable than the stock market, plus all of the buyers who were already interested in investing in Panama before the pandemic who will now be itching to take advantage of the opportunity. Adjust your sale price, realize that you will need to be flexible, and negotiable, and when an opportunity arises to potentially achieve a sale, please remember that it very well may be the one and only opportunity you’ll have for a while.
Whether you are reading this as a seller or buyer, you are encouraged to reach out to us at Tropic Lands Real Estate and discuss the listing of your property, the adjustment of the sale strategy or price for your property, or the opportunities available for acquisition of newly listed and reduced priced properties.
When life gives you lemons, you make some lemonade, and might as well put some rum in there while you’re at it.
Dustin Conlon
CEO, Tropic Lands Real Estate
