Nestor Kirchner has just passed

[perry]

Absolutely there was too much speculation in real estate all over the world. It's severe speculation when banks don't make you put much down payment and you aren't living in the home and don't understand simple fundamentals of cash flow.

I believe now more than ever you really need to be careful with real estate unless you are going to be living in the property indefinitely. And even then many times it makes sense to rent vs. buy.

But you shouldn't buy simply for the misguided rationale that "real estate always goes up" because it clearly doesn't. And you can't try to catch a falling knife.

You have to really know and understand what you are doing. And even then you can see real estate fall quickly in a short period of time. Case in point, back in April 2010 I just started looking at acquiring real estate in the USA after waiting from the sidelines and watching it fall dramatically the past few years. My first property I looked at adding was in Plano, Texas (an affluent Northern suburb of Dallas). This was back in April 2010. The asking price on a large 5 bedroom nice property in a nice area was $340,000. This was before the home housing credit expired.

I made an all cash offer of $300,000 on the house and the seller's realtor rejected it saying they already rejected offers at $300,000 and $308,000. I told them good luck but the market was going to fall back down once the first time home buyer's credit ended. Both the seller and the sellers Realtor were in severe denial. Fast forward to October 2010 and the realtor emailed me a few weeks ago saying the price has dropped down to $287,000 and asking if I'm still interested. A $52,000 decrease all in a few months on a home with an asking price of only $340,000. Do the math on the %.

This is just one real life example of how fast real estate can fall if you don't understand it. Even in relatively non-bubble areas like Dallas that didn't experience big price increases.

Absolutely there was too much speculation in real estate all over the world. It's severe speculation when banks don't make you put much down payment and you aren't living in the home and don't understand simple fundamentals of cash flow.

I believe now more than ever you really need to be careful with real estate unless you are going to be living in the property indefinitely. And even then many times it makes sense to rent vs. buy.

But you shouldn't buy simply for the misguided rationale that "real estate always goes up" because it clearly doesn't. And you can't try to catch a falling knife.

You have to really know and understand what you are doing. And even then you can see real estate fall quickly in a short period of time. Case in point, back in April 2010 I just started looking at acquiring real estate in the USA after waiting from the sidelines and watching it fall dramatically the past few years. My first property I looked at adding was in Plano, Texas (an affluent Northern suburb of Dallas). This was back in April 2010. The asking price on a large 5 bedroom nice property in a nice area was $340,000. This was before the home housing credit expired.

I made an all cash offer of $300,000 on the house and the seller's realtor rejected it saying they already rejected offers at $300,000 and $308,000. I told them good luck but the market was going to fall back down once the first time home buyer's credit ended. Both the seller and the sellers Realtor were in severe denial. Fast forward to October 2010 and the realtor emailed me a few weeks ago saying the price has dropped down to $287,000 and asking if I'm still interested.

This is just one real life example of how fast real estate can fall if you don't understand it. Even in relatively non-bubble areas like Dallas that didn't experience big price increases.

Your post is good and completely valid as most real estate around the world is very overpriced . I do not believe in speculative real estate buying nor will I represent a sale that is not a market value property .

In Buenos Aires it is one of the few markets worldwide that has been based on cash and for this reason the supply of properties for sale is much less than equivalent markets overseas especially USA and Europe. Currently I have a list of 56 buyers who need to purchase now in Barrio Norte a 2 bedroom apartment with light and good features and there are very very few recommendable properties .

Real estate is risky and you must take great care in purchasing . I do not believe that anyone should buy in Argentina unless they decide to live here and take residency . If you are buying for speculation I suggest other investments.

 

[earlyretirement]

In Buenos Aires it is one of the few markets worldwide that has been based on cash and for this reason the supply of properties for sale is much less than equivalent markets overseas especially USA and Europe. Currently I have a list of 56 buyers who need to purchase now in Barrio Norte a 2 bedroom apartment with light and good features and there are very very few recommendable properties .
s.

Perry I totally agree with you on this point. The ALL CASH market here is really important to keep in mind and something that totally separates Buenos Aires from other places around the world that are in a speculative bubble.

You are also right there isn't many great properties on the market in good areas. There is a lot of "junk" on the market but really great properties are hard to find. I own a whole lot of real estate here in Buenos Aires and always looking to add more but as you mentioned there isn't a lot of great properties on the market. Most locals aren't motivated to sell because as I mentioned before...there is nothing else to put your money into here in Argentina. The only safe investment locally for the Portenos are bricks and land. I had a friend that recently sold a $800,000 US property in Palermo Soho. I thought it would take them many months or a year to sell. It sold in 3 weeks! All cash to a local Porteno....

Add into the mix that safe investments around the world are paying almost nothing now. CDs and bonds at 1.5% which I consider almost nothing. Even on apartments here you can do a long term lease and net 5%-6%.

And I agree with you that most people aren't good candidates to buy in Buenos Aires. Heck, the vast majority of people out there aren't in a position to pay 100% cash for a property. The vast majority of real estate investors out there leverage with finance and that simply isn't possible here in Buenos Aires. One of the favorite things about the real estate market I've always loved was that there aren't really any Pikers in the market here. You can't afford to buy a property here unless you have the cash. It's one of the most beautiful things about the market here for intrinsic investors here that value the fact that you can't really "speculate" here.

I'd much rather own a property here in Recoleta or Palermo vs. Miami Beach, New York City, London, Madrid, or most places in the USA that are still with inflated prices. You have one bad hurricane and property prices will fall another 20% in Miami.

 

[dr__dawggy]

Hopefully you have nothing against gay people as some of my best friends and clients are gay and I hope they don't take offense to your post.

I also joined this group from a link I found on Trip Advisor and I have to admit some of these threads are very interesting. I remember seeing this forum many years ago and I never joined because there was so much bickering and arguments.

My personal feeling is it's totally fine to have different opinions and standpoints. That is perfectly healthy and I actually like that because it's good to get others perspectives on things. The world would be a very dull place if everyone thought the same thing.

However, I've also heard from other people since joining that told me that they were banned from the board or had their access limited or removed all because they have a different opinion than a moderator. I really hope this isn't true.

I think everyone's opinion is important and no one is right or wrong but people should have the right to express their opinion on any subject as long as they are doing it with respect and back up their arguments.

This is a good forum as there seem like there are many intelligent posters here and some that really understand Argentina. The educational level seems fairly high of the posters. But I think it is good to respect people's views even if you disagree with them.

You can post intelligently and tell us why you disagree with others opinions.

Perry asked if I was gay. I responded that I am not Why would any gay person take offense ? I suspect it is more likely they would take offense to the one who raised the question rather than a straightforward response. I do wonder why Perry would raise the subject in the first place, since it has nothing to do with this thread.

 

[dennisr]

Argentine real estate has done well. This outfit been around the block few times. http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=IRS:US

 

[earlyretirement]

Argentine real estate has done well. This outfit been around the block few times. http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=IRS:US

Doc I wasn't referring to you in my post.

Dennisr - IRS has been a great performer over the past 2 years. I got in a little over a year ago for a pretty sizable position and it's been a great performer! Just keep in mind it's not a heavily traded stock so volume is REALLY thin. But it's been a great performer.

 

[dr__dawggy]

Doc I wasn't referring to you in my post.

Dennisr - IRS has been a great performer over the past 2 years. I got in a little over a year ago for a pretty sizable position and it's been a great performer! Just keep in mind it's not a heavily traded stock so volume is REALLY thin. But it's been a great performer.

ah, thanks for the clarification.