I’ve talked about the effect of the crashing dollar for some time now. In some cases, at least in theory, real estate prices should be flat or decreasing in relation to strong currencies. (Property prices are in US dollars.)
What’s happening with the US dollar is a full-fledged economic catastrophe in the making. As always, there are totally unexpected twists and turns with any economic crisis. Here’s an example:
We have an exclusive listing for an Ocean View Estate here in Piriapolis. The owner of the property is European and strong currencies (Euro and Swiss Francs) were used to build this mansion. The owner’s response for the dollar debacle was to raise the price of the property to partially compensate for the Buck’s decline. The price for the estate was increased last week from $2,260,000 to $2,460,000 - about 9%.
This is not a lot of money in this price range, but it is interesting. By the way, other owners of properties that were financed by strong currencies have also moved the price peg a bit higher.
The question is, will these price increases stick?
Stay Tuned!
Steve Bowman
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May 14th, 2008 at 1:09 am
Interesting Steve…so what is a legitimate percentage increase on properties in Piriapolis based on the US market downturn? I have begun shopping around and some listed new places recently went up considerably by as much as 30%.
Thanks and great website by the way
May 14th, 2008 at 8:37 am
Todd-
Like several articles talk about, price increases depend on whether it’s new construction, or existing, and what it is.
Plain Jane, no view property has gone up very little. Fairly new, nice, prime view property has gone up perhaps 10%.
Early stage new construction, Like Sugar Loaf have gone a bunch. I believe new construction hard costs are about 30% higher than they were one year ago based on just completed research.
I don’t feel like one can say this is happening in the US, therefore this should be happening in Piria.