As long as Romanian economy will continue falling,the Real Estate market will continue dropping as well

Part 2 

(to read part 1, click here)

Romanian economy contacted by 2,6% in Quarter 1, 2010
The news is bad. Not only Romanian economy continued falling during the first quarter of 2010, but this contraction remained at very high levels, worrying everyone about the future. (you can read a related article here) 

But for the ones who "read below the lines", the message is clear: With -17% in the constructions segment (Real Estate is included here), Romania will simply see the problems growing. (Don't forget that this sector was the one which actually led the economy's expansion over the previous years. When Romanian GDP was growing by 4 – 8% year to year, the Real Estate sector was growing by 15 – 30%, generating incomes for millions of people).

Now the lesson is clear: Move the Real Estate market and restart the economy,

Another 5 Real Estate lessons of 2010
So, let us crosscheck together another 5 lessons that 2010 has generously taught us so far:

6. Several owners attempt to offload bad properties, trying to create tricky deals for investors
Ok, this happens during all times, good and bad ones. But it is sad to see so many offers in the market hiding "something". They declare that they are in a hurry and they try to press you in order to invest without checking carefully all the documents. They get upset when you appear being organized with lawyers etc. These months I saw many deals having stopped AFTER the initial agreement upon the price, as there was "something else" in reality, for which we needed to research a lot, in order to identify it and protect the clients.

7. Getting a bank loan for Real Estate: Expensive, difficult, if not impossible
Behind the curtain of success that all banks have, you will discover a difficult reality. Most of them have very serious problems of all kinds and Real Estate is usually their biggest one. This is why either they refuse to lend, or they ask for very high interest rates. This situation will continue until the end of the year (at least).

8. It is good to invest, without any doubt. (The question is "who has the guts and the necessary psychology in order to proceed)
If you are an investor, you are able to buy properties like "shopping in an empty super market). 

Without stress and pressure, you can acquire some very interesting opportunities, while you will be careful to avoid the crap that you will receive. 2010 showed us so far that the vast majority of serious investors, who dared to proceed in an investment, will have excellent results in the years to come.

9. A good period to invest is now, an even better one will start from autumn
It is sure that if you find a good opportunity now, you should move on and invest in it. Good properties don't stay in the market forever, plus their prices will not become… "0". On the other hand, if you don't find what you are looking for, don't worry. Autumn is coming and many more people will realize that they have to adjust their expectations to reality. The first months of the year showed that this procedure accelerates month by month, as the country's economy does not recover.

10. Income properties, lands at distressed price and special occasions: The investors' priorities
When banks open their doors for financing Real Estate investments, they prefer to do it for income generating assets, as they can have a clue about how they will be paid back by the investor (the income is pledged in bank's favor). Also, several investors with cash check carefully offers of lands inside big cities, when their price is distressed. The same stands for buildings and developments, but the transactions were less.

Apartments with "Prima Casa" sell, but not as it was expected to. And without "Prima Casa" investors avoid expensive apartments, or properties without a serious discount.

PS.1. If you don't need the money, 2010 is not a good year to sell
Many owners expected this year, in order to rise their prices to the 2008 standards. Reality proved that they were wrong. If one awaits for a high price to sell but does not need the money, he should not expect to sell his property this year. It will be very difficult to reach his expected price.

PS.2. Not a Real Estate lesson, but still a lesson:

For one more year, Mugur Isarescu and BNR remain the main stability factor of this country
The Governor of BNR proved during 2010 that he is still the main stability factor in this country. I have never met him, but what I know is that his wisdom is still the "safest port" where the "ship of Romanian economy" can protect itself from the world economic "waves" and "turbulence".

It is not by coincidence that at least three banks became "target" for investors in order to acquire their Romanian activities. Bankers feel safe in the system created by BNR, which is one of the main reasons why this country still has an excellent potential for the future. It is also the proof that except the "problems" with many people here, there is also a big part of Romanians who can be the most serious, punctual and trustworthy people.