Prices Have Fallen in Panama’s Highland Country

Right now, real estate values in Panama’s highland country around Boquete are perhaps the best they have ever been—certainly the best in seven years.

I’ve scouted Boquete many times in the past decade. Now, for the first time in over six years, I’m seeing deeply undervalued opportunities from distressed sellers.

With prices so low, now is the time to act on property here. The mountain air is still crisp and the sunshine warm. And the town has never been so vibrant. There’s a new theater, new cafes and restaurants, and an international school. The city of David is only 40 minutes’ drive away, and road improvements underway are going to shorten that to 25 minutes within the next two years. Plus, there’s talk of more flights coming to the airport.

The town of Boquete is buzzing with expats gathered in cafes, restaurants, and community social areas. It feels healthy and relaxed, and it’s this simpler, healthier mountain life that draws people. You can hike, play golf, go whitewater rafting, bird watching, or bathe under a crashing waterfall or in hot springs.

Yet despite all this, prices have dropped. Why?

Three decades ago, Swedes came to build the first hydro-electric power station on the Caldera River down the valley. Then, 12 years ago, North American expat pioneers arrived, attracted by the climate, rich pastoral setting, inexpensive real estate, and glowing reports in the pages of this magazine.

In 2004 and 2005 Boquete really caught on. The trickle of pioneers turned to a flood of North American real estate shoppers, developers, and speculators. When I visited in 2007, I counted more than 20 real estate projects at various stages of planning and development—targeted mostly at the North American market. Prices shot through the roof. A two-bedroom, two-bathroom condo could set you back $200,000 or more.

But then the housing market in many parts of the U.S. collapsed. Credit dried up back home. Buyers could no longer buy with the stroke of a pen to release an equity line of credit on their home. With few buyers over the next six years, the market ground projects failed or never got off the ground. And now you’ll find some private sellers who need out.

This situation is a “value window.” I don’t expect it will stay open long—especially as Boquete is beginning to appear on the radar of wealthy Panamanians and other Latin Americans as a second-home location.

You’re comfortably in the game here for $100 per square foot. (You could have been looking at $200-plus in a new luxury community back in 2007.) In fact, even in the luxurious area known locally as “Millionaires’ Row,” I have seen homes listed for $100 per square foot—$350,000 for a 3,500-square-foot property.

I particularly like one area just outside town. It’s not a private community, so you won’t have HOA fees or be subject to the whims of a developer. It’s a friendly, multinational neighborhood. You can join the private (but simple and inexpensive) club and hang out with neighbors around the pool. Or you can stroll into town.

This is where I saw that comfortable, 1,900-square-foot home on a corner lot. The asking price is $165,000 and at that level it’s priced to sell. But I get the impression the seller would take $152,000.

For great views and value, trot a bit farther up the mountain. There I saw a 883-square-foot duplex with a 355-square-foot terrace for $95,000.

And you’ll also find deals in high-end, gated communities. Like $188,500 for an ocean-view penthouse… Or you could buy a completed home of over 2,000 square feet for the low $200,000s. With developer lot prices here in the $75,000 to $100,000 range, you’ll do much better buying from an eager seller than building yourself.

Soon Boquete will revert to its growth curve and opportunities like this will be a distant memory. In the meantime, I’ll be keeping a close eye out for these deals… and so should you.

Editor’s Note: Ronan McMahon is a director of Pathfinder (International Living’s preferred real estate advertiser).

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