{"id":4888,"date":"2010-07-27T05:56:37","date_gmt":"2010-07-27T03:56:37","guid":{"rendered":"http:\/\/http:\/\/www.iliaspapageorgiadis.ro\/en\/?p=4888"},"modified":"2014-03-12T16:39:27","modified_gmt":"2014-03-12T14:39:27","slug":"the-enemy-of-bad-is-worsebut-opportunity-lies-beneath","status":"publish","type":"post","link":"http:\/\/www.iliaspapageorgiadis.ro\/english\/2010\/07\/27\/the-enemy-of-bad-is-worsebut-opportunity-lies-beneath\/","title":{"rendered":"The enemy of \u201cbad\u201d is \u201cworse\u201d(but opportunity lies beneath\u2026)"},"content":{"rendered":"<p align=\"center\">\n\t<strong>Romanian Real Estate market continues contracting during 2010<\/strong>\n<\/p>\n<p style=\"text-align: justify\">\n\t2010 started as a year full of promises and new challenges. I don&#039;t know why, but too many people expected the Real Estate market to revive, without any change or move, nothing to improve the business environment. The same happened with the economy in general and we all know that it was not a correct approach. As the months were passing by, it was more than clear that the buyers will not accept the owners&#039; conditions, even if the last ones tried to raise their prices in March (!)\n<\/p>\n<p>\n\t<!--more-->\n<\/p>\n<p style=\"text-align: justify\">\n\t<strong>Opportunities, opportunities, opportunities&#8230;<\/strong><br \/>\n\tThe first half of the year ended in the worst possible way, with the new austerity measures being announced and the market&#039;s psychology dropping to new lower levels. 95% of the transactions completed during the first six months of the year were only:\n<\/p>\n<ul style=\"text-align: justify\" type=\"disc\">\n<li class=\"list\">\n\t\tOpportunities\n\t<\/li>\n<li class=\"list\">\n\t\tBig Opportunities\n\t<\/li>\n<li class=\"list\">\n\t\tIncredible Opportunities\n\t<\/li>\n<\/ul>\n<p style=\"text-align: justify\">\n\tThe rest remained unsold, for various different reasons, but mainly due to the price. It seems that it still doesn&#039;t match with the buyers&#039; expectations, so they remain idle, waiting. The above mentioned transactions led the market to the bottom, but the majority of properties still are offered at higher prices (and usually in a &quot;package&quot; with all possible problems).\n<\/p>\n<p style=\"text-align: justify\">\n\t<strong>Austerity measures announced, more measures to follow&#8230;<\/strong><br \/>\n\tSo the market&#039;s biggest problem is that supply is still not offered at the prices that demand is offering. If we try to identify the second biggest problem, we would definitely focus on the business environment. The recently announced measures demolished the (unreasonable) people&#039;s opinion that the situation would be more or less solved without dramatic moves. Unfortunately now we all know that Romania still has many economic problems to solve in order to &quot;restart the engine&quot;.\n<\/p>\n<p style=\"text-align: justify\">\n\tBut as we don&#039;t see solutions for the structural problems, but only &quot;ideas about today, not tomorrow&quot;, it is inevitable that more measures will follow. This is something that many people fear and it delays their decision to invest, as they feel that the &quot;rules of the game&quot; will change again, quite soon.\n<\/p>\n<p style=\"text-align: justify\">\n\t<strong>Enemy of &quot;bad&quot; is&#8230; &quot;worse&quot;<\/strong><br \/>\n\tGreeks used to say that &quot;the enemy of good is better&quot;, meaning that no matter how good you are, you can always become better and improve yourself. Right now Greece has entered into a vicious circle and it seems that &quot;enemy of bad is worse&quot; there. I am sad to notice that the same situation has become the economic environment of Romania too. Especially during 2010 we keep on watching each month to be worse than the previous one. And since the problems (that cause this result) are not solved, we will probably continue this sad route until the end of the year, at least.\n<\/p>\n<p style=\"text-align: justify\">\n\t<strong>If only a Real Estate investment was a marriage&#8230;<\/strong><br \/>\n\tWith all due respect to older ladies, we all hear what people say for&#8230; mothers in law. So, let us assume that an investment in Real Estate is a marriage and let us remember which are the &quot;mothers in law&quot; which threaten to destroy &quot;the couple&#039;s happiness&quot;:\n<\/p>\n<ul class=\"unIndentedList\" style=\"text-align: justify\">\n<li>\n\t\t<span class=\"list\"><strong>The economic environment<\/strong>. People feel afraid of tomorrow.<\/span>\n\t<\/li>\n<li>\n\t\t<span class=\"list\"><strong>The recent bad experiences<\/strong>. Too many people feel frustrated for being tricked, for all kinds of reasons.<\/span>\n\t<\/li>\n<li>\n\t\t<span class=\"list\"><strong>The &quot;depreciating psychology&quot;<\/strong>. People expect that everything will be cheaper tomorrow. Result: They don&#039;t buy something today, unless it is absolutely necessary.<\/span>\n\t<\/li>\n<li>\n\t\t<span class=\"list\"><strong>The unstable Ron<\/strong>. As Romanian economy feels the pressure, the Romanian currency follows and many people expect it to drop more.<\/span>\n\t<\/li>\n<li>\n\t\t<span class=\"list\"><strong>The austerity measures<\/strong>. Too many people will adjust their lives to new, lower standards of income and consumption. <\/span>\n\t<\/li>\n<li>\n\t\t<span class=\"list\"><strong>The limited supply of good properties in the right price<\/strong>. You either find a bad property or a good expensive one. So, you simply wait&#8230;<\/span>\n\t<\/li>\n<li>\n\t\t<span class=\"list\"><strong>The reluctant banks<\/strong>. Either they simply don&#039;t lend money, or they lend with terms that are very harsh for an investor. Exceptions simply confirm the rule.<\/span>\n\t<\/li>\n<\/ul>\n<p style=\"text-align: justify\">\n\t<strong>Coming up: Foreclosures<\/strong><br \/>\n\tIf things will not improve during the following months, we will enter in the era of foreclosures. Unofficially we already live in it, but for the moment the banks don&#039;t announce that they accept to sell a property by losing money. Too many experts question their ability to last much more, while bankrupsies are endless, people barely pay their installments and too many problems are &quot;hidden under the carpet&quot;. This will start either during the last quarter of 2010, or during 2011.\n<\/p>\n<p style=\"text-align: justify\">\n\t<strong>Opportunity<\/strong><strong> lies beneath&#8230;<\/strong><br \/>\n\tSo is everything dark? Not really. When prices are falling, it is always an opportunity for new investments. I don&#039;t tell you that all properties are good, but during the following 12 &#8211; 18 months you will definitely find very good properties offered at attractive prices.\n<\/p>\n<p style=\"text-align: justify\">\n\tThis bad period will not last forever. Better years will return, sooner or later. Aren&#039;t we the ones who were asking in 2008 for &quot;much better prices in order to invest&quot;? Now that we entered in the era of opportunities, it will be a pity to lose all chances. It is time for wisdom, careful moves and patience. Can you catch up?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Romanian Real Estate market continues contracting during 2010 2010 started as a year full of promises and new challenges. I don&#039;t know why, but too many people expected the Real Estate market to revive, without any change or move, nothing to improve the business environment. The same happened with the economy in general and we [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":59454,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[224],"tags":[],"_links":{"self":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/4888"}],"collection":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/comments?post=4888"}],"version-history":[{"count":0,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/4888\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media\/59454"}],"wp:attachment":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media?parent=4888"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/categories?post=4888"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/tags?post=4888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}