2010 like 2009: No business as usual(…and too many people still dream)

The second month of the year is over and we have a first overview of the first two. We can already see the marks the year started leaving, as it is stepping its way throughout the time. Let us check together what we experienced over these first 60 days of 2010, mainly in Romanian Real Estate market:

Too many people dream of…

• Euro was down by almost 10% (against dollar) and this helped RON rise to the exchange rate of 4,1. Then this news made many people feel that the crisis is over. Their approach is interesting: Without any measures, solutions or new directions, all the problems will be solved by… themselves and we will march to a great future.
• Too many people still dream. More than half the properties inside Bucharest (except apartments) have prices which are absolutely artificial, they are just used as examples, when one wants to describe

  how crazy is the market in general. All these people still talk about 2008. They still didn't wake up…

Many owners raised their prices, while the market remains frozen

• A big number of owners have also risen the prices of their properties, despite the 0 (or very limited) demand and the endless supply. One of them told me that "I will sell only when I will get the price of August 2008. Until to sell at that level, I will have no problem to eat every day only bread and onion". "Try some kiwi too, the period will be long" I suggested…
• Result of all the above: The market remains frozen, with a very limited number of transactions, only when someone sells at a price which can be called "opportunity".

If one needs to sell today, he has to offer "attractive" price

• On the other hand, there are some guys who try to be the first ones to sell and they discuss about more realistic prices. It is obvious that if you need money today, your price must be attractive for the buyer. Some very interesting properties have been put up for sale, at prices which make a number of investors and banks move.
• In the same time there are too many properties which are either bad or expensive. The few good ones are very rare: 

Real Estate companies: (unfortunately) you can't teach new tricks to an old dog

• Most of the Real Estate companies continue moving without any business, as… usual (lately). There are very few deals nowadays and this causes unexpected behaviors around us.
• Despite the crisis, too many Real Estate people prefer to "die alone" than to collaborate and save themselves splitting commissions. They hope that the market will revive soon. If it will not, they are in trouble…
• Too many small and bigger companies continue working, using the recipes of the past. It is really sad to see them trying to trick a client in any possible way. In the same time, they refuse to come closer to today's reality and their clients' needs. (Typical example)

Banks started unfreezing loans, in bad terms though

• February was the month when I started hearing around me several banks telling me "if you find a project, we can finance it". What they don't say, (and they will avoid telling you as much as possible) is that these loans are very expensive and with bad terms.

Residential Sales and Rentals: Stability when we talk about real prices

• The rental market has reached stability after the major decline during 2009. The low levels of 2009's last quarter are established for good in the majority of the transactions
• The sale market is another story. Too many owners rose their prices and expect to get more money while the demand is very limited, except specific projects and cases.
• Prima Casa II did not really bring a revolution, but it is expected to help in the same way that the first version did.
• The sale of ANL apartments will block the prices in many areas. Is this good or bad? It depends on who you are and what is your interest. (For more. click here)

Office Rentals: A bit lower than 2009

• As the demand is very limited and the supply becomes more and more, while the banks press the developers to "do something eventually", the market continued its slight downwards trend.

Retail – High Street – Commercial spaces: Coming soon!

• My company has almost concluded a major study of almost 40 areas of Bucharest. It will be aired during March and you will notice very interesting details.

Off market deals: Yes, when the opportunity is big

• In the first 2 months of 2010, my company had +30% more clients since the same period last year. But everyone is searching for an opportunity to buy. So most people search for the one with financial problems, so as to buy his / her property at a very low price.

PS. I am not upset with anyone who raises his price or does not want to sell at a low price nowadays. I just mention that during this period we need good behavior and stability, not the mistakes of the past which brought us here.