Real estate investors have decided that the time is ripe to advertise the opportunity for foreigners to buy property in Spain and Greece. People who do buy homes in these two nations take a very long set of risks, and the investors know that. It has not kept them from aggressive marketing.
InternationalLiving.com has put out a report that:
reveals how high-quality Greek real estate is coming onto the market for a fraction of its previous value and predicts prices will continue to fall.
The report’s authors add real estate expert Ronan McMahon believes, that for Americans:
There’s no liquidity in the Greek real estate market and prices are falling like a rock. Greece faces a crisis today and its real estate is about to get dirt cheap. Prices will continue to fall as sellers become more desperate.
The most critical part of this analysis is that there is “no liquidity in the Greek real estate market.” Caveat emptor. The ability to sell homes purchased now could persist for years. And the free fall may not be over.
The New York Times, which has a real estate section as large as any other in the country, both in print and online, recently ran an article titled “House Hunting in … Spain.” The featured home was one that only Times readers, rich as they are, could buy. Priced at $2.47 million:
This four-bedroom villa, built in the 1950s and expanded in the 1990s, was originally a one-story fisherman’s house. It overlooks the Mediterranean and the bay of La Fosca on Spain’s Costa Brava, and is a 90-minute drive from Barcelona.
The place even has a guest house, and is obviously a bargain, one expert told the Times reporter:
The global financial crisis hit Spain hard in 2008, and no recovery is in sight, said Mark Stucklin, the owner of the real estate Web site Spanish Property Insight. “There’s no denying that there’s a savage adjustment going on here,” he said. The problems stem from overbuilding, easy credit and inflated housing prices. Prices in most of Spain are down 75 percent from the peak in 2007, and new construction is down 95 percent. That’s a collapse of the house-building industry by anyone’s standards,” he said.
The comments are so enthusiastic, it might cause a reader to think Stucklin will get a commission if the home is sold. As the financial implosion continues, try to sell this home in five years, or even 10.
Purchasing these properties in Spain and Greece is akin to buying a house in Las Vegas today, where some prices have dropped 80%. Unemployment and a glut of properties have ruined the metropolitan real estate market well beyond the foreseeable future.
Some deals are too good to be true, because they aren’t deals.
Douglas A. McIntyre