Map of Cartagena high rises (large image)

tomtom33 says on Feb 17, 2006, 14:17:

Laguito There are currently four projects on the boards for Laguito that are not shown on the map. One is nearing completion. Two are in the process of demolition of existing structures. And one has only a sign of what will be.

Many of the streets in Centro are torn up for re-construction. There will be a lot more people to move around.

Wastelandlive says on Feb 18, 2006, 12:49:

Thanks Tinto- I'm caught up in other projects, but my intent is to use this post as an introduction, search out all the other posts on buying and selling real estate, and figure out how to write one of these "Poor But Happy" guides.

Tomtom is certainly correct... this photo isn't exhaustive. Still, if you combine it with Paul Juan's website:

http://www.cartagenainmuebles.com/paul.html

... then you have a fantastic tool for comparing the new condos, their locations, and price per M2.

I pulled this from the latest issue of Semana. There's a pretty interesting article discussing the construction boom in Cartagena, and it credits most of the explosion to changes in domestic tax and investment policy under Uribe that have made this kind of development particularly lucrative.

It also voices some concerns that we've discussed here about stressed- out infrastructure. And that's a doozy; most of these building are providing their own parking, like NYC condos... but it's hard to imagine how more road can be built in Boca Grande. Let's hope most of these buyers don't need cars. Then again, why would they? It's not like they're going to have jobs...

Informational only; my opinion is that the market is not "going to turn..." it is turning. 1) Miami has slown down, and big builders from Vegas are pulling out. (They don't do that because they think their prospects are good) 2) We're looking at the nastiest inverted yield curve in history... high interest rates are coming, take it on faith. 3) I think we're going to hear the screams of pain from every market that has seen absurd appreciation over the last few years, and doesn't have sound fundamentals. And if any city in the world lacks the fundamentals, it's Cartagena. Seriously, $200K, $300K, 1/2 a million for a condo in CTG? Where top of the pile professionals are earning $30K - $40K a year? That's not right.

If the market turns now, it's going to catch CTG in the middle of the boom, and the result is going to be glut and overcapacity.

Of course, that's just IMHO; many here dissagree.

This is a longterm project for me. I'm building a spreadsheet, looking at the map, and saving my cash. My day will come. Call me...



"My Momma done tole' me, bring home sumthin' fo' din-nah..."

Wasteland

Andy-NY says on Feb 18, 2006, 16:39:

They should put "LDV" on that map as a point of reference.

Andrew-NY

Andrew-NY

tomtom33 says on Feb 19, 2006, 02:04:

Infrastructure is my big concern as well. There are many things that could be done to improve traffic flow in Bocagrande and Laguito. The major problem will continue to be the Colombians using thse roads. They seem to have no concept of right-of-way. They repeatedly park in traffic lanes, and I have yet to see a car towed. I have seen both lanes of the only road into Laguito completely blocked by cars that were stopped for a chat.

poco says on Feb 19, 2006, 07:32:

My sentiments exactly WLD’s summed up some of my thoughts on Cartagena. One exception,, doubt I ever purchase a unit.

They could be a fantastic purchase IF you could find a reliable company to rent and MANAGE the property,, AND BREAK EVEN after applying, but NOT relying on, the U.S. tax codes.

I looked at this small Boca Grande 4 plex/condo in 2003. Does anyone have an idea on the price range now? Location was about 3/4's of the way down the beach toward Old Town. My guess is the unit might sell for 250 Million ? because of the beach front location and land value. Rent rates would also be interesting.

"Violence is the first refuge of the incompetent" - Isaac Asimov

Wastelandlive says on Feb 19, 2006, 09:52:

Poco... I think I saw that unit for sale on PJ's site... I don't know if it moved or not. Were they selling the entire building when you looked at it, or individual units?

I couldn't agree with you more on the cost of ownership. I own a property here in the US, and every agent I've had has been crooked: you catch him, you fire him, and the next guy is worse.

Of course, if you have a long term tenant paying a lease, it becomes harder for them to cheat you... it becomes a question of inflating maintenence bills. But vacation rentals as an absentee landlord? With no way of confirming who is renting when for how much? That's about the definition of "dar papaya," no? I'm not sure if I'd try that with even a friend, or family member in Cartagena... that might just be a great way to destroy a relationship.

I noticed last summer while I was in Spain that the way this is done is that landlords rent their property to the agent at a huge discount - he then has the right to sublet it. No headache, predictable cash flow, and a large margin for the agent, who is no longer making 10%, but more like 60%. Of course, he really has to promote it, since he's on the hook whether he rents it out or not.

I suspect that it simply wouldn't work in CTG. It's not a culture that is big on honoring contracts or budgeting - it would probably crash two months into the deal.

It's a shame that things are thus - once again, there could be a long term mutually beneficial relationship if you could count on some integrity; but that's impossible... so running this as a business is largely impossible.

There are a couple of expats with multiple condos there managing there own properties; I wonder how they are making out?

Wasteland

poco says on Feb 19, 2006, 12:29:

I don’t know. Were they selling the entire building when you looked at it, or individual units?

The owner lived in the U.S. making money transfer easy. It wouldn’t make sense for him to sell one. Someone might have consolidated the property in the last few years for investment. I got the feeling the agent was a relative and the owner was probably sick of seeing the price go down. I know that feeling all to well.

The Spain lease,, now that’s a new thought. Property management, I was involved in that. Gave it a try part time. After a few years the decision was easy,, not worth the time and effort. 10%,, hummm 150,000 worth of rents a month,, lease some space, pay someone 3 grand a month to put up with all the daily “crap�, leaving me the long term “crap�.. Possible,, but I’d rather be the guy that owns Orange County Choppers. Had an interview with him on TV, he had a very attractive live-in girlfriend. She was a stewardess on an airline,, I didn’t know young good looking female stewardess’s still existed. Learn something new everyday.

"Violence is the first refuge of the incompetent" - Isaac Asimov

DonkeyDust says on Feb 19, 2006, 13:02:

Global warming? Myth? Rising seas - Myth? I am in awe of where people build (around the world) with the changing weather and sea levels. I guess that is why they are rich and I am not.. they have more guts.
Changes in Latitudes...attitudes.

Latitudes attitudes & platitudes.

Wastelandlive says on Feb 19, 2006, 18:49:

IMHO... Down by the Hilton, at the mouth of Laguito. Nice beach, fewer vendedores ambulantes.

R/

WLL

Wasteland

Wastelandlive says on Feb 19, 2006, 21:14:

I wish there were cardinals indicated... that would help I guess you're right... Laguito has no mouth since the owner of the Hilton decided to fill it in and create more beach.

(Laguito is a filthy, stinking, pond as a result. He did what he did with no legal authority whatsoever... and the people who objected gave up when they started receiving mysterious threatening phone calls. No action from the city of Cartagena. Just another day in the developing world!)

The mouth would be to the right, or the East on that map. The Hilton is on the Southern jaw... it's a white building that unfolds like a "U" or a "V" facing to the West.

Why the sudden curiosity? Everybody in CTG knows where the Hilton is. You'd have no problem finding it.

Wasteland

anonimo says on Feb 19, 2006, 21:21:

Hilton Is the large building to the left of the word "Akashi", at the bottom of what appears to be a sand bar. If you drive through Laguito, you have to drive by the Hilton.

I have been to Cartagena many times. It is too bad that all this building is happening in Cartagena. I was in Cartagena last month, for the first time in almost 2 years and the city has changed. By city, I don't mean Cartagena, but specifically Bocagrande. Maybe I am a little older or there is not a decent disco there now since L'Esollera(?) replaced by a construction site where the talles building in Colombia will stand at 51 stories. This last trip, it seemed different, even Borrachita's was nowhere near as busy as it used to be. Many people buying the apartments will not need parking as there will be many timeshare units and most will be rented out.

The best beaches in Cartagnena are La Boquilla. There is still affordable property there, Yet, most likely in about 5-10 years, this property will be swalloed up by large hotels... I will be investing there!!

tomtom33 says on Feb 20, 2006, 05:41:

Property manager I have had very good luck with Juan Ventura, a Spaniard de Barcelona. He rents my place out 4 or 5 months a year when I am gone. Of course I didn't buy as an investment. I bought because I want to live here.

Wastelandlive says on Feb 20, 2006, 09:28:

Thanks Tom tom... It's nice to get a personal recommendation.

Is he renting it out long term, or by the day/week? Does he take care of the maintenance fees as well? Has he ever had to contract a repair for you? And are you seeing some return after he's taken his cut?

R/

WLL

Wasteland

tomtom33 says on Feb 20, 2006, 15:34:

WLL Juan does strictly short-term rentals. He works on commission, and short-term rentals are higher. He pays all bills: maintenance fee, water, gas, electric, phone, cable TV, Internet, my health insurance, and property tax. I netted over 3 million pesos for the month of January.

He functioned as my real estate agent, bought all my furniture, and oversaw several rounds of extensive remodeling. He has accounted to me for every peso spent.

And he has become a personal friend. He was standing at my side for two rounds of laser surgery to repair a torn retina last spring. The surgeon could speak no English and my Spanish sucks.

Wastelandlive says on Feb 21, 2006, 16:22:

Well... please tell Juan... ... that because of your personal recomendation, based on his honest performance, he may have another customer in the next year or two.

Would you do me a favor and PM me his contact information?

R/

WLL

Wasteland

wOw says on Feb 23, 2006, 12:14:

I can vouch for Juan Ventura. He is a class guy. Very proffessional and honest.

wow

[img]http://i25.photobucket.com/albums/c85/JPMiami/neonsignzs7.png[/img]

NewBoy says on Feb 23, 2006, 12:29:

Juan Ventura I have known Juan for about 4 years, although I don't do business with him, I have never heard a bad word said about him.

One thing to note is that Juan is not interested in just taking property on for the sake of it, he only adds to his rental properties if he feels that he can keep them rented out most of the time and turns down people who want him to rent property for them regularly.

Wastelandlive says on Mar 1, 2006, 14:57:

To all who follow these things... The jig is up. It peaked here in Miami last November.

Note the classic real estate agent speak: "It doesn't matter if prices are falling, if you're going to live in it, you should still buy!"

OK.

"The boom is gone as home sales drop 39% in Palm Beach County"

By Paul Owers
South Florida Sun-Sentinel
Posted March 1 2006

South Florida's five-year housing boom is over.

Prospective home buyers are finding home prices falling to more affordable levels. Sellers are waiting impatiently as their houses sit on the market for weeks and months, only to receive tepid interest and lowball offers.

This is a dramatic shift from the sizzling market that had been yielding sellers quick buyers willing to pony up top dollar for houses across the region.

"We're entering a new part of the cycle," said Brad Hunter, a West Palm Beach housing analyst. "We're in the process of returning to reality."

Indeed, January sales of existing single-family homes declined sharply in Palm Beach County compared with January 2005, the Florida Association of Realtors said Tuesday. The number of used homes sold fell 39 percent to 586, the fewest houses changing hands in the county during one month since February 1997.

Meanwhile, prices aren't appreciating at double-digit rates as they did in recent years as investors leave the market and homes listed for sale spike, giving buyers many more houses to choose from.

Palm Beach County's median price for January was $393,700, up just 9 percent over January 2005 but down from December's $408,200; this is the first time the median has dropped below $400,000 since July. The median price means half the homes sold for more, half for less.

The real estate slowdown also has spread to the once-frenetic condominium market. The state Realtors association Tuesday reported monthly condo sales for the first time. Existing condo sales dropped 32 percent in January in Palm Beach County compared with the same period last year. The median price rose 31 percent to $209,100.

Looking ahead, as interest rates rise to near 7 percent, many people won't be able to buy homes and some recent buyers with adjustable-rate mortgages will be squeezed, said Hunter, the West Palm housing analyst. As a result, he predicts an increase in the number of foreclosures across South Florida.

Despite the slowdown, Hunter doesn't foresee a bubble bursting and said the market should remain strong through the rest of the year.

In Wellington, like many towns across South Florida, homes are taking longer to sell, and for-sale signs are sprouting on front lawns daily. Just two years ago, house turnover in this western Palm Beach County suburb known for its equestrian set was minimal and declining prices were unheard of.

One three-bedroom home on Oak Shadow Way in the Tree Tops development off Forest Hill Boulevard went on the market last fall for $348,000. After plenty of showings and one sales contract that fell through, the seller cut the price to $324,900, said agent Yolanda Ulibarri of Keller Williams Realty.

"That's very typical," Ulibarri said. "I see it in my office every day."

Mark Pateman, a real estate attorney and agent in downtown West Palm Beach, said sellers can get their asking prices -- if they're willing to wait nine to 12 months. At the same time, a buyer who intends to live in the property rather than flip it as an investment shouldn't procrastinate, he said.

"If you're a user, it's never a good idea to wait," Pateman said. "Always buy now. You'll almost always make money in the long run. If you're an investor, now may not be the best time to buy a condo."

Six weeks ago, Tom and JoAnn Carlisi put their three-bedroom Lake Worth home on the market for $339,000. It features new granite countertops, a swimming pool and hurricane shutters, but so far they've had just a lowball offer and an open house Sunday that attracted one visitor.

While it's tough not getting discouraged -- the couple knocked $10,000 off their asking price -- Tom Carlisi said he knows sellers have to adopt a new mindset now that the real estate market has shifted, giving buyers the upper hand.

"You have to be patient, and we're in no hurry," said Carlisi, 51, a drainage contractor who wants to move to a home with a big yard for his four dogs. "If we have to wait a year, we will. We're not going to give it away."

As the market turns, real estate agents are becoming more realistic at pricing properties, said Brian Russo, broker-owner of ReMax Direct, with six offices in Palm Beach County.

"Realtors also are becoming more selective in their listings because now there's more time involved," Russo said. "We're starting to see commissions of 6 percent. Sellers are willing to compensate Realtors for doing a full-service job again."

Sales and price appreciations also are falling in Broward and Miami-Dade counties, according to the Florida Realtors group.

Sales dropped 36 percent in Broward and 28 percent in Miami-Dade. Broward's median price of $370,500 and Miami-Dade's median of $376,300 were up 19 percent and 26 percent, respectively over January 2005. But both median prices were flat compared with December.

Marilyn Markuse bought a beachfront condo in Fort Lauderdale in 2004, but now she wants to sell and move into something bigger.

She recently looked at a townhouse and made an offer that was rejected. It was a good thing, she said.

"We could have come to terms, but I kind of pulled away," said Markuse, 51, a catering director for Hilton Corp. "When I made the offer, I assumed my condo could sell pretty quickly, but now I'm not sure. I didn't want to be stuck with two mortgages. It was too scary for me."

Paul Owers can be reached at powers at sun-sentinel.com or 561-243-6529.

http://www.sun-sentinel.com/news/local/palmbeach/sfl-zhomesalespb01mar01,0,3583008.story?coll=sfla-news-palm

Wasteland

Wastelandlive says on Mar 1, 2006, 15:03:

Now I'm really curious... And I think it would take somebody with long experience, NOT an economist, to answer...

Let's assume Miami is a leading indicator on the way down, as it is on the way up.

Does a market like Cartagena hold out longer, or fold more quickly?

And economist would probably point out that those units in Cartagena are almost completely luxury items, and luxury items being the most elastic, will probably lose their value more rapidly than single family homes here in South Florida.

But a real estate person would note that real estate prices are "sticky." People who will take a bath in the stock market and walk away strangely find it far more difficult to give up paper gains in real estate, let alone a loss.

Prices drop, they refuse to sell: the result, stagnation. And in that case, I've got to presume that few of the buyers in Cartagena really depend on rental income or even financing to carry those properties. I think a lot of the new owners can afford to keep the pig in the portfolio, if it comes to that.

So sell off? Stagnation? Or continued growth in tourism makes for a soft landing?

It's going to be an interesting five years, yes indeedy...

Wasteland