BA Real Estate market to take a dive before the end of the year.

[garryl]

A recent USAToday article states that the RE market in the USA will “plunge“ by up to 60% the rest of the year and won't recover 'till 2021. So this is a world wide problem. It’s a real tragedy, it going to get ugly.

I think 60% is too much, I can not agree with that. 30% will be a lot in California, which is overpriced now. Other places will be down less.
In 2008, bad part of the California has come down about 60%, this is the subprime loan area, many people bought houses with teaser rates. After 2012/2013, investors took over the properties, with cash or large down payment, and the non-investment buyers also put at least 20% or more, I think the market is very solid now, and US banks are healthy. About a few weeks ago, all big US banks slowed mortgage process and stopped jumbo loans, they sat on tons of cash for the rainy days. As for fancy part of Silicon Valley like Palo Alto and SF, many people have deep pockets, and they can last for a long time, a few years or 10 years of reserve is not uncommon.

The only people who can get killed are the young professionals who just got a job at Airbnb or Google, they saw their coworkers live in nice big houses (which are paid off with the stock option money), they want the same, they carried a big mortgage of at least 1.2m (yes, it's common in Silicon
valley to borrow $1000000-$2000000m dollars of loan if you have high income at Google or Facebook or Apple), and they do not have rich parents to give them 10k-20k to cover the monthly loan and tax payment, when they get laid off (which is already starting, Airbnb plans to layoff 33%), they can not last more than a few months, draining 13k a month, with no one is hiring, they will abandon the houses and cry all the way back to daddy's house.

Another opinion, is that, the virus will be short lived, vaccine and new test kits will put an end to the virus, by mid next year, Coronavirus will be defeated. We have V shape recovery. If you have enough to last a year, and lost the job, you might be OK.

 

[Rich One]

Sharp price drop of CABA properties in dollars , Drops of 30 % or more..!

Alerta por desplome de precios en dólares de propiedades: así son las rebajas que se negocian

Los datos se registraron en la primera semana de apertura de las oficinas para la atención al público, en el marco de la flexibilización de la cuarentena

www.iprofesional.com

 

[NeoWonk]

In the USA, most loans are allowed a 6 month forebearance - no questions asked - followed by a possible additional 6 month forebearance. So it will be at least a year before real price declines occur.

 

[Rich One]

Rental of commercial space is going from no rent payment , to rental pay formula. But many tenants choose to rescind the contract and vacate the space, even when offered to stay for free-. Owners then place the space for sale. Future rentals of commercial space in the future will be in pesos.
Not good news for commercial space investors.

Crisis sin precedentes: comerciantes devuelven los locales a pesar de que se los ofrecen "gratis"

La parálisis comercial vuelve inviable incluso la continuidad de comercios que han recibido un trato especial. Se multiplican los locales puestos en venta

www.iprofesional.com

 

[Jeremias]

If, because of the coronavirus, Buenos Aires turns out to be the global city with the longest quarantine, then I wonder who will invest in the city, given that any new pandemia would have the same outcome, next year or the year after. But sure, most world cities will have the same problem of trust with future buyers.

Personnally I'll never again buy an apartment in any big capital of the world. Buying expensive apartments to get quarantined while the dudes in the countryside have fun, no thanks. I'll buy in the countryside.

 

[elgordito]

Sharp price drop of CABA properties in dollars , Drops of 30 % or more..!

Alerta por desplome de precios en dólares de propiedades: así son las rebajas que se negocian

Los datos se registraron en la primera semana de apertura de las oficinas para la atención al público, en el marco de la flexibilización de la cuarentena

www.iprofesional.com

While some properties are gonna drop 30% in dollars I don't think this applies to most properties... at least not within the next few months (within the next few years, possibly). Think about it, if you have an apartment worth 400k in a good location in Palermo would you really be willing to settle for 100k less?

 

[Rich One]

While some properties are gonna drop 30% in dollars I don't think this applies to most properties... at least not within the next few months (within the next few years, possibly). Think about it, if you have an apartment worth 400k in a good location in Palermo would you really be willing to settle for 100k less?

Very True . But owners that are up to the ears in debt due to the Pandemic will ? 30 % ? You forward your guess..!

 

[Jeremias]

While some properties are gonna drop 30% in dollars I don't think this applies to most properties... at least not within the next few months (within the next few years, possibly). Think about it, if you have an apartment worth 400k in a good location in Palermo would you really be willing to settle for 100k less?

Matter of fact, if I had "an apartment worth 400k in a good location in Palermo", I would absolutely sell, ASAP, even at 50K less, and buy elsewhere (as in, far from the GBA). Worrisome things are mounting up, if one can read the signs.

 

[rickulivi]

Buenos Aires's real estate market is very cyclical. If you buy, and hold for many years, you will be fine. If you want to make a quick buck, it's a tough market to do that. Renting laws are terrible, so buy mostly if you plan to use it personallly.
I bought my first apartment in 1975. It was only 30 square meters, in a second floor (third floor US standards) and no elevator. It was a walk up, but in a nice location in Recoleta. I bought it for the equivalent of $10,000 dollars, but in pesos. I put $4,000 down payment, and got a mortgage for the rest, all due in a few years. My annual interest rate was a whopping 60% fixed rate, and my monthly fixed mortgage payment was about $1,000,000 pesos. A few months later, the Rodrigazo hit, I got fed up with Argentina, emigrated to the USA, and locked the apartment. My debt was quickly paid off because of the startling depreciation of the peso. I sold this unit in 1979 for $24,000 dollars, which I used for a down payment on a house in Sacramento, California.

My rate of return on that apartment was excellent. Even if you had bought it in 1979, at the high price that I sold it, and held till today, I am sure you would have done fine.

In 2004, I bought another apartment in Bs. As, and still hold it. It sits empty most of the year, but I am sure that if I sold it today, I would end up with a decent return, not a killer one.

You don't invest in BsAs. to make a huge profit in real estate, and the main reason for this is the lack of being able to leverage yourself along with high taxes and transaction costs. If your goal is to make a quick buck, I would say, forget it. If you want to buy to have a place where to stay while enjoying the city, and are willing to hold it for a long time, you will do fine.

 

[Rich One]

Only 7 Real Estate transactions during April 2020 . No buyers?

Derrumbe inmobiliario: por la cuarentena, en abril solo se realizaron 7 ventas de propiedades en la ciudad de Buenos Aires

El 2019 ya había marcado el peor período para la actividad inmobiliaria, con registros inferiores a la crisis de 2002 y a los años del cepo cambiario

www.infobae.com