Be honest...for any of you that are even remotely intimate with real estate pricing in the USA. If I told you I could get you an oceanfront unit for $100/sf, in a truly livable condominium complex or single-family home community, you'd jump. If I told you I could do that for $90/sf...$80/sf...$70/sf ...you'd probably trample over me in the stampede to buy. If I was telling you this in the state of CA, you'd have me committed. Well...it can be done in Ecuador...readily so...but you first have to understand the realities of that statement. To understand that reality, you have to understand the nuances between $/sf and available housing inventory.
To date, the most disappointed Buyers we have encountered in Ecuador have been those folks looking for a little 1 or 2 bedroom condo, or small single-family home, for around $100,000 or less. Why? Is it that they don't exist? Not all. they exist. Two were fairly recently sold. They just don't exist in large numbers, especially in true coastal locations. Again...why? Is it that "all those sources lie" about what's available? Well...no...not exactly. Much more complicated. For example, to stay under $100,000 for a small condo or home, based on a $100/sf price, you'd have to find a property no larger than 1,000 sf. Even at $70/sf, you'd have to find. a property at no larger than 1,400 sf. The first challenge is that many properties in Ecuador, even condos, start at 1,500+ sf. In some areas, it is hard to find healthy inventory below 1,600 sf or even 1,700 sf. Ecuador real estate runs large, when compared to the USA or Canada...and runs "mega-large" when compared to Europe.
So, for example, we are working with a buyer named Doe. They have very specific criteria with regard to geographic location and view features. They have a realistic price point...and a realistic sf requirement. What we haven't found yet is that property that meets the location, price and sf requirements. On a $/sf basis, we have found Doe many options. However, the gross costs exceeds their budget, because all the units are...well..."huge" compared to what Doe requires. At least they are in Doe's target sub-market. While it is just a matter of time (and timing), buyers should be prepared for these realities. Just hearing that property sells for $80/sf in an area is not "good enough", you must understand what that means in available inventory. If your goal is to spend only $80,000 and you are willing to settle for 800 sf or less...you are being very realistic. However , that will do you no good, if current market inventory has nothing available that is smaller than 1,400 sf, because that would bring your gross cost up from $80,000 to $140,000. Same $100/sf. Even if the price could be lowered 20%, to $80/sf, that 1,400 sf condo would still cost $112,000, far exceeding the $80,000 target budget. While everyone is hyping the great $/sf values that truly exist, no one is having serious conversations about "the face of current inventory" that realistically exists. In fact, if you are a proven developer and want to build projects which would be like shooting fish in a barrel...build 1,000/sf or less, reasonably priced, reasonably "Western-style" units (condos or small SFHs) along the coastal communities of Ecuador. Just my clients alone would probably keep you busy for years.
So, again, it's not that the real estate bargains that folks crow about aren't real. It's more that you have to be sure that "their bargains" and "your bargains" are aligned. If not, market inventory realities may throw a real wrench into your plans. As always, Caveat Emptor.
HGQ
As scarce as truth is, the supply has always been in excess of the demand. ---Josh Billings
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