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Real-Estate Market Optimistic About 2005
Strong sales of new, pre-existing, and second homes to continue, thanks to prevailing low interest rates and high demand; commercial and industrial projects facing permit delays
By JOSE L. CARMONA
January 27, 2005
After an excellent year for the local real-estate market in 2004, in which some Realtors experienced sales increases of nearly 20% from the previous year, the industry is encouraged by what has happened since the end of the Christmas holiday recess.
"Despite 2004 being an election year, when some feared sales would slow down after September, we had a 20% increase in sales," said Tiri Real Estate President Gisella Castro. "It was an excellent year, one in which we had an incredible flow of customers thanks to prevailing low interest rates, and it looks like 2005 is following the same trend."
Since the end of the Christmas holiday recess, there has been an unusually high flow of customers looking to buy a home, especially in the San Juan metro area, said Castro.
"We barely have enough homes in inventory to satisfy the demand, especially in the Condado area," said the Tiri president. "We even have clients willing to pay above-appraised value for prime, oceanview properties."
The Guaynabo and Carolina areas, noted Castro, are also in high demand. Sales in the Guaynabo office last year, for example, exceeded $10 million a month, and the trend seems to be continuing this year, she said.
Castro said homes priced in the $250,000 to $300,000 range in the San Juan metro area are practically nonexistent, and theres a great demand for these in Guaynabo and Rio Piedras.
"When homes in this range appear, they are sold instantly," she added.
Another interesting trend that started in 2004 is homebuyers who in the past couple of years, moved out of metropolitan San Juan, but got tired of commuting and are looking to move back to the city.
"That trend is continuing in 2005. We are seeing clients who had purchased property out of San Juan who now want to return and are looking at properties in the area," added Castro. "We are currently assisting them in the sale of their homes so they can purchase in the San Juan area."
The fact property values in Puerto Rico continue to increase between 5% and 7% each year and interest rates have remained low have turned real estate into a much more attractive investment proposition than the stock market, which hasnt stabilized completely, noted Castro.
"Second-home buyers are mostly looking for new projects such as Rio Grandes Rio Mar sector, where they can enjoy hotel and beach facilities," said Castro. The sale of second homes remains strong, thanks to mortgage products offering 100% financing and low closing costs."
The walk-up apartment concept took a while to gain acceptance, but is now in high demand, said Castro, noting developers are now adding elevators to new projects.
"Due to the lack of single-family homes below $200,000 in the metro [San Juan] area, sales of pre-existing walk-up apartments remain strong, as new couples buy these for their first home," noted Castro.
There is a low inventory of commercial and industrial real estate available because of the delays these have faced in the past few years in obtaining the necessary construction permits, noted Castro.
This Caribbean Business article appears courtesy of Casiano Communications.