You know what I mean, don’t you?
They climbed a lot …
And they went down a lot!
Now they have come back up …
And they start coming down again!
What is it?
The roller coaster?
The properties in Spain, man …
Until October 2008 there was a saying that it was like a mantra … “properties in Spain never go down”
That had unleashed the investment madness that only those of us who live very close to those moments know. Everything was sold, anyone was an expert investor, buyer, builder …
I hallucinated with the things that some bought, and of course without making a mistake, they ate them with potatoes …
Restaurants full of builders (many circumstances) smoking the usual cigar (still in premises below 100m2 the restaurant owner had the power to permit smoking or not),
I remember a guy “paleto” in a dinner in the restaurant Riff of Valencia of € 135 pp + drinks trying to impress a woman with his cigar and works .., all the damn dinner hearing him screaming and swallowing his smoke .. in fact I took such a hobby to the site that I never returned.
And then it happened: bankruptcy of Lemans Brothers in September 2008, remember? More than one sure as well as I, impossible to forget .. there began to change my life ..
We went from opulence to selling nothing. 2009 was scary, and 2010 a little better but also .. at least for me. I suppose that like everything in this life, some were favored by the crisis and were lined up .. their luck.
It sank me, I got very indebted with mortgages, credits, cards, etc etc, etc. In fact I have been so scalded that today I do not have a single card, I do not use.
Anyway, nobody is interested in the problems of others, so let’s go to the topic today.
Before the price of the property has been recovering (in some areas more than others and even neighborhoods) now begin to fall again .
For what is this?
Multiple factors according to my point of view:
Because as I said before in some areas they rose too much, due to international political instability, the Brexit, political uncertainty in Spain and the fear that this produces in the average citizen and above all, the investor, which translates into a fear of spending (just in case flies), which totally slows down the economy, because of the trade wars between the big ones, because of a slowdown in the international economy (so crowded by the ECB and the IMF) and especially because the average Spanish can no longer afford them.
Various articles published in different media this week corroborate what I see and the sales reports of the different official offices confirm this, less and less homes are being sold.
If not take a look at this article appeared on Tuesday in EL MUNDO
The owners begin to lower the price of the homes they have for sale.
I understand that it is a difficult decision, that for an owner who has paid an exorbitant amount at the top of the boom (2005-06-07), now to be able to sell the normal thing is to lose a lot of money …
It is what it is
Or to maintain the property for many years with the costs that means and with the usual deterioration over the years.
For that it is better to rent it because an inhabited house always deteriorates less than habited.
And by the way you get money …
According to the real estate portal IDEALISTA, 15% of the ads published were reduced in the third quarter of 2019. A year earlier it was 13%. In the Madrid region, for example, from 14.6% in 2018 it has gone to 17.8% of the houses.
The same in the case of FOTOCASA: in the Madrid capital, 32% of the ads have been reduced in October, compared to 15% in October 2018.
In the city of Barcelona, it has gone from 11% to 34%, triple.
The sales between individuals suffer and the deadlines to find a buyer are extended.
Now it’s realistic because things, in my opinion, are going to get a bit uglier in the coming months …
And friends, for me it’s time to adjust prices.
Eye to the data: between the months of January and August, the National Statistics Institute (INE) has accounted for 282,565 sales of used homes, 3.5% less than in the same period of the previous year (292,917 transactions were closed).
It is the first fall in five years.
And we will see what happens in the last quarter, which seems the fall will be even greater.
On the other hand, the salaries of the Spaniards are what they are: the gross salary rose 0.9% in 2018.
And the maximum effort rate allowed to grant a mortgage is around 30% of income.
This is what limits the cost.
The price increase has been very fast and the expectations of the owners are very high, so now it’s time to be realistic and down to earth….
The economic uncertainty and the fluctuations of the markets have returned to the table the most conservative side of the Spanish families, that in the last months are increasing the investment in bank deposits until levels never seen.
What does this mean? That people save for fear of running out of money, which translated into economic language, tries to spend as little as possible, which slows the economy and growth.
You don’t have to be a scientist to understand this, therefore any important decision such as buying a home or a car is postponed until the prospects improve.
For me this translates into two things:
First: fear, always fear, paralyzes the less brave, which will cause prices to fall, and second: that the bravest and with cash will seize the opportunities.
Don’t you think there are no buyers waiting for their chance, they are hidden behind the computer
In Altea, Russian, Spanish, etc. buyers may disappear, but other nationalities will always come: Belgians, French, English, Polish, and even Chinese!
Some have already bought more than one house …
And so that you understand what I am talking about: if a property now has a price of € 500,000 and nobody asks for it, it is expensive. If we lower it to € 450,000 and still ask no one, it is still expensive. And if by necessity or logical decision we put it at € 399,000, suddenly several buyers appear and it is sold right away.
That means what we professionals understand: “it was put at the market price”
Everything put at the price requested by the market is sold very quick, seen and not seen.
It is what it is
That is why friends, if you want to sell quickly, let yourself be advised by a professional in the area who knows well that you are holding, and this will advise you how to put the property, the price and also the presentation, because don’t think the presentation is not important.
It must be clean (although this seems obvious, many are not), and in perfect state of repair and painting.
Doing a HOMESTAGING is advisable.
Remember that to buy a property we use the head a lot, but the final decision is always made with the heart.
Good luck and good weekend