Monday, July 30, 2012
The Great Recession and how it affected real estate on Ambergris Caye
People, especially folks from the USA, often ask us how real estate values have held up in the wake of the 2008 financial crash and the recession since. Here's what I have observed over the last few years:
1. House and condominium values have held up very nicely with vibrant sales in both categories.
2. That said, some of the more ambitious condominium developments (for "ambitious" you can also read "poorly located and even more poorly planned") have had their problems. The recession put paid to impulse buying from folk with money to burn. Now people are much more sensible and frugal with their hard earned dollars. In general, any condo development located 6 miles or more north of town or on the West side of the island either went bust or slowed to almost zero progress on construction.
3. Land sales: We saw beach front land values hold steady but the rapid increases in values of the previous years came to a crashing halt. Here we are in 2012 and prices are either the same as they were pre-2008 or have even pulled back just a bit. Here's why: Pre-2008 most of our buyers were investors looking to cash in on the rapid increase in land values. Post 2008 most of our buyers are people getting ready to build their dream home. As you can imagine there were more investors than house builders. The beachfront land category is still quite healthy but if your land is too far from town it's very hard to sell for 2008 prices in today's market. Not many people want to build 7 or more miles from town.
4. Commercial and businesses: This is one area which might actually have benefited from the recession. A lot of people just plain "wanted out" after their financial world collapsed in September/October 2008. They were looking for a new challenge. We saw (and still see) existing businesses change hands at what seem like very healthy prices here on the island. Not all are successful. Buying a business here on Ambergris Caye means using common sense and finding a real estate broker or agent who is not afraid to tell you what you don't want to hear.
5. Timeshare: This is one category that shouldn't be classed as "real estate." It should have its own category: "Pointless Purchase for Really Naive People." The Great Recession killed all timeshare activity on the island except for Captain Morgans timeshare which has stubbornly hung around. It is my opinion that timeshare in Belize is a complete and utter waste of time and an even bigger waste of money. You'd be better off chucking your dollars towards the Captain Morgans Casino than wasting it on timeshare.
I might post more on the subject of the Recession vs. Belize Real Estate in the coming days.