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How To Navigate The Housing Market After COVID-19

07 Jun
Colorful traditional French houses on the side of river Lauch in Petite Venise, Colmar, France.

How To Navigate The Housing Market After COVID-19

The Key To Profiting From Post-Pandemic Property Markets Worldwide

U.S. property markets are bubbling… boiling in some cases.

I spoke with a friend in Florida last week who told me he’s been in the market to buy an apartment in Miami for his son who just took a job in that city.

He’s lost two so far. In both cases, he spoke with the listing agent to say he was very interested and would, in both cases, made appointments to view the properties the next day.

In both cases, before he could visit, the agent called to say that the apartment, again in both cases, had been sold.

How could that be, my friend wondered aloud on the phone the second time it happened. The real estate agent told him that a buyer out of New York had paid cash sight unseen.

He’s close to doing the same himself at this point.

The Crisis Opportunities

What happened to the crisis opportunities in real estate that I and many other pundits were expecting in the wake of the pandemic? That’s not how things are playing out many places in the world, including and especially in the United States.

Many places across the globe, we’re seeing seller’s markets.

City dwellers are looking for space after being cooped up during quarantines and lockdowns.

People who have been working from home and whose companies have decided they can continue to work from home are looking for bigger homes with home offices… or they are taking off to join the digital nomad movement, buying or renting properties in places where they think they’ll have more freedom during a next round of lockdowns, should they come, or the next global disaster, whatever and whenever that is.

Several developer friends—in Belize, Mexico, Nicaragua, and Brazil for example—had some of their best sales periods ever between June 2020 and April 2021.

Meantime, investors are buying rental units expecting a huge surge in tourism rental demand as borders reopen and people start traveling again.

Developers in Panama (including me) are likewise expecting a boom as the tourists return. However, this country has another reason to anticipate a surge in foreign investment.

Investors Worldwide Are Looking For Safe Havens

They’re shopping the globe for where they can place their capital beyond the impact of expected tax increases in their home countries as their governments try to figure out how to pay for all the economic stimulus money they dumped into their economies during the crisis.

It’s time like these when Panama stands way out.

This country doesn’t need to raise taxes to cover even extraordinary expenses like those incurred over the past year-and-a-half. The big-time cashflow generated by the Canal and now the huge copper mine in the interior of this country (copper prices have more than doubled since their initial fall at the beginning of the pandemic) provide all the funds this government needs.

It’s a new era for us global property investors.

My Advice For How To Navigate It?

I’m taking the same position I adopted following the 2008/2009 global meltdown. It served us well then… and it will serve us well again now.

Buy for yield.

Don’t jump into a frenzied market because you’re worried you’re going to lose out on rapid appreciation. Stick to the fundamentals and look for solid properties providing solid rental returns.

Even if that means in some cases buying sight unseen.

Lief Simon