Price of real estate during crisis

The pandemic is a flashing red light for Expats who might aspire to speculate in South American real estate.

Potential deals are fraught anyway in Ecuador and Colombia much of the time .. even when a pandemic is not part of the equation.

A drop in real estate prices is an indication that buyers are few.  An investor may be unable to re-sell any acquired property for a profit.

Property speculation by Expats in this era should be limited to gamblers who have money to burn.

cccmedia

So, have prices dropped now or not?

Marlo Pollo wrote:

Hey amigos...

I am in CO (Colombia) now where the exchange rate gives you 30% more pesos because of covid turmoil.

True, amigo, the value of the US dollar spiked as high as 4176 Colombian pesos in late February* (now is just under 3900).

Ipso facto, property prices have effectively dropped for those paying with USD in the covid era.

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Since what goes up does come down (per the saying), the dollar's value may drop back down once the pandemic eases.

Betting on the strong dollar vs. the COP to buy property is speculation piled upon speculation for overly ambitious 'investors'.

cccmedia

*The US dollar had been averaging about 3400 Colombian pesos for the previous nine months. 

Source for currency data in this post:  USD/COP charts at xe.com

I guess we are all different. Casinos and blackjack have zero appeal to me.  Although I have owned and traded etf’s, real estate has been better for me. I prefer to add value to my investments with hands and heart.  Momentum investment during bull markets is how most people feel comfortable, but there is potential for greater gain by running against the manada. Investing in anything anywhere is risky. Asymmetrical knowledge brings market beating results and gives the confidence to pull the trigger when everyone else is selling and running away.
     At this stage of my life, I find more value in beautiful land that I can use and enjoy. After being locked down, I am doubling down on that idea. Would rather spend my time in the sun with plants and animals, producing the foods my family enjoys,  raised the way I feel they should be raised. While I’m a value hunter, I’m  not afraid of paying a small premium (overpaying) to acquire the piece of dirt I’m going to live on. Any expat who’s owned a home in the states should be able to find great value here.
   So I guess I’ll rephrase my question. Are there any real estate investors or would be investors out there? Are you noticing more listings, price changes, empty properties? Air B&Bs with chronic vacancy might be a place to look.  I’m curious about how Ecuador has faired during past economic hardship. How has  Ecuador’s use of US currency affected its economy?  Sticky prices, lack of fiscal tools to steer economy, inflation ect. 
     Thanks for your time. Good Luck!

The limited view I have is that prices are down about 25%.  I rent long term and this is a very casual observation. If I was buying, I would wait until October or November, then you might get stuff 1/2 price.  That is a guess, I would love to hear what others say

Bigbrad2008 wrote:

The limited view I have is that prices are down about 25%.  I rent long term and this is a very casual observation. If I was buying, I would wait until October or November, then you might get stuff 1/2 price.  That is a guess, I would love to hear what others say

I don't think (in Ecuador) you will be getting 1/2 price property end of the year. With Ecuador using the dollar, you don't get the exchange rate bump you do (as mentioned above with Colombia) in troubled times.

Prices in the expat / tourist areas have been in a downward slide for years for a number of reasons, which I think are.

1) increase in supply. With the influx of foreigners to Ecuador around 2010 for a few years. Lots have realised their dreams were just that and selling up. There are a lot of  expensive properties for sale

2) Economic downturn since the earthquake. Coincidental IMO, but after the earthquake foreigners coming to the country declines (tourist / expat).

3) Related to above, that when there was an influx, prices were inflated to silly prices, but some were paying it. Locals who realised they could ask for crazy money for all but abandoned land owned by their family asking  150k 200k a hectare have had their dreams of easy money crumble. There have been coming down, but still are in the vastly inflated category.

With the above, prices will continue to come down, but I don't see a sudden adjustment crash. Maybe some foreigners will be desperate to upsticks and leave and will price accordingly - many have been and still are, are priced at making money x2 x3 in cases, rather than getting out what they put in. Have seen isolated cases of 230k houses dropped in 160k for example. But I don't think this will be across the board.

Having moved a year ago to a different area within area for high school for my eldest and looking for land + property here, I hope so. But then again have a property for sale in the old area, so I hope their is a crash in the new area and prices remain in the old haha

What % to do you see prices dropping? And how long long do you think that drop will be? I currently see a 25% drop now but that is limited and not very accurate