Investors seeking a coherent set of statistics regarding the Panama City, Panama real estate market may find themselves stymied by the 2009 Panama Real Estate Report. The annual report, which is produced by The Panama Report website (
www.thepanamareport.com), offers a conflicting set of conclusions as to where one of the major Central American markets is headed.
The report notes that Panama City’s lack of a Multiple Listing System complicates the process of gathering data. “They like it this way,” Costa Rica and Panama real estate professional Casey Halloran says in the report. “There is power in hoarding information and if it were free to everyone, some would stand to lose power.”
To circumvent the lack of an MLS, The Panama Report was produced with the assistance of Reveal Real Estate, a market research firm which specializes in Central American real estate data.
“While it’s been projected now for over a year that Panama’s market is due to bust, there still exists, as of May of 2009, a dimension of incongruity between buyers and sellers: sellers want to sell high, buyers want to buy low, and no one really knows an appropriate price,” the report reads. “Unlike more developed markets where a sense of reality and facts preside, we believe Panama’s disparity between buyers and sellers to be attributed to one main liability and that is the inability to obtain real comparative selling data. In other words, buyers and sellers aren’t on the same page because…well, there’s no same page to be on.”
Sales Down, Listing Prices Up
In one of the Panama City market’s most apparent contradictions, listing prices seem to have increased even in the face of fewer sales. As of May, the average price per square meter was $2,742.07, a 2.88 percent increase from $2,665.25 a year earlier.
“Some experts wager that these numbers represent the maximum peak in a curve that will soon begin its downward slope (as supply continues to increase and demand appears to be tapering off): if true, these would represent the most expensive prices Panama has ever and will ever (at least for a long time) experience,” the report reads. “Others believe that prices have increased due to the draw from Latin Americans who have difficulty entering more northern markets.”
According to the report, many condominiums in Miami are equal in price – if not less expensive – than those in Panama City: “One has to question why, when an American has the option to buy (what many would call) a better product in the States, would they opt for Panama where the legal system, construction quality, and infrastructure are less impressive?”
Property Prices Tumble
The report finds that over the past year, the average price for Panama City condos and houses in four major areas has fallen between 3 and 16 percent. In Panama City itself, average prices in May 2009 were $448,762, down 3.26 percent from 2008’s average of $463,875. The Coronado to San Carlos region saw an 11.76 percent drop, while the Boquete and Volan area had a 6.42 percent drop. The most significant drop was 15.96 percent in Bocas del Toro. The average price for all areas dropped 7.80 percent over the last year.
The report calls out the Boquete and Volan submarket as a microcosm of Panama City as a whole. “Sales have come to a halt because of the vast gulf between buyer expectations and seller flexibility,” it notes.
Price decreases in Panama can be considered mild compared to many United States markets, including those in Florida. The report notes that the Florida Association of Realtors reported median condo sales price of $108,700 this spring, down 37 percent from $172,300 a year ago. Panama City, for its part, saw median condo listing prices of $450,200 in May, down a far more reasonable 3.5 percent from $466,400 in July 2008.
Future Outlook
Panama City, which has become popular for foreign investment in recent years, appears poised to continue across-the-board declines in listing prices. However, real estate professional Paul McBride, who works in the Boquete market, says in the report that it will remain an expensive destination for investor dollars.
“(Property discounts) are no longer the case,” he says. “Property in Panama – city, beach, mountains – has become more expensive than property in the US, Canada, and Europe."
