Monday - Saturday
Congress has finally approved the long-awaited Financial Control Board that will hopefully enforce government spending limits and allocate resources between essential services, politicians and bondholders. I've always said that this is the critical step to forming a bottom to the decade-long slump in real estate.
But don't get too excited yet!
While the legislation has been passed just in time to prevent bondholders from freezing government bank accounts - there is no board in place pending appointments by Washington.
It will take a few months for the board members to be in place - and then they will have the formidable task of trying to figure out just where the island's financial situation stands.
What does this mean for the real estate market?
Look for continued softness in the market through 2016 and the beginning of 2017.
However, as soon as investors have confidence that the control board is slowing or stopping government over-spending - the market will start to turn. This is an important first step, but real recovery will be dependent on re-establishing a private sector in the economy that will encourage re-population by the hundreds of thousands of Puerto Ricans forced to move to the mainland in search of jobs.
Hedge Funds have taken a long-term view in anticipation of the control board - so they have been buying for the past couple of years and continue to buy as they see opportunity. Some have already begun major renovation and construction projects even though many would question if there is sufficient demand.
We're seeing improvement in the 3+ bedroom luxury segment. Law 20/22 tax haven investors have bought up prime residential properties in Condado, Dorado and Palmas del Mar where the expat community appreciates convenience, quality and amenities.
Local investors are aggressively buying properties in Santurce, Miramar, Old San Juan and Isla Verde at historically low prices. But this is mostly limited to prime areas where local investors know the potential and limited downside.
There is also significant interest from 'pre-retirement' state-siders looking to buy at today's low prices in anticipation of moving to Puerto Rico when they retire in 3-5 years.
So it looks like the decline is slowing and a bottom is slowly forming.
We're seeing banks more willing to give mortgages to qualified borrowers. This is especially true for stateside residents with great credit, stable employment and the cash for the mandatory 20% down payment.
Will a control board solve all our problems? Of course not - but it should start to give some stability, clarity and direction for the future.
Like all markets - your decision on when to commit is the key to success. Invest too early and you may see some downward or stagnant pricing... Wait too long and you may kick yourself with regret later for the deal that got away...
If you are considering a real estate investment in Puerto Rico…
If you need a broker in San Juan, PR - call 787-455-4216
Our real estate broker office is located in San Juan's SANTURCE Arts District near Ciudadela, Lote 23 & Cobian's Plaza.
Office hours are Monday - Saturday from 9am - 7pm. (by appointment only).