Mallorca Property Prices Report – A Review of the Mallorca Property Market and Advice for those Seeking Property For Sale in Mallorca

A war of words has broken out between developers on the Island of Mallorca and the College of Technical Architects (Aparejadores) over what is happening to property prices in Mallorca, and the outlook for the future. 

Unsurprisingly the developers, many of whom have large stocks of unsold properties (although not as large as those on the Mainland), argue that prices won’t drop further fearing, no doubt, that buyers will sit on their hands waiting for further falls before committing to any purchase. Official figures from the Instituto Nacional de Estadistica (INE) suggest prices across Spain fell by 9.2% between April 2009 and the same month last year. Tinsa, one of Spain’s largest valuers, published a similar figure of 10.1%, although referred to a figure of 17.1% for the Mediterranean coastal areas and 10.4% for the Balearic Islands.

Although these figures do not take into account falls prior to April 2008, official figures of price movements since the top of the market passed are not more than circa 15% and therefore along way short of what is happening in other countries (UK, USA, Ireland etc) where similar property price bubbles have been experienced. As we have mentioned on a number of occasions it seems much more likely that the statistics in Spain are inaccurate rather than that Spain is suffering less, and price reductions are subsequently lower.

Anecdotal evidence, where sales are being achieved are of price reductions much nearer 30 – 40% with the largest falls in areas with greatest over supply problems and poorer quality properties. While Mallorca has very significant defensive qualities – more limited over supply of unsold new build properties; a history of “lifestyle” purchasers rather than speculative investors; a top quality international brand; and a large stock of top quality luxury properties, we have long maintained that property values in Mallorca have fallen although in many cases this has not been reflected in asking prices, many of which have remained stubbornly high.

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It is thus refreshing to hear that our fellow professionals, the Aparejadores, believe that where sites are being purchased for future development these are being done so at values which will allow subsequent sales to be done at up to 30% below the “boom time” levels. They quote land prices of between 42,000€ and 48,000€ per dwelling, on small unit schemes, compared to 102,000€ and 108,000€ at the height of the boom and the start of the credit crisis.

Clearly this will have a direct impact on second hand property values and those of the unsold stock of new build properties.  Even if asking prices don’t drop the reality is that actual sales prices, particularly where mortgage finance is required and where the bank valuers are coming in with much lower figures, need to fall if buyers are to commit. The key for buyers is to thoroughly review the market, if necessary seeking independent valuation advice, and to negotiate hard. This is a buyers market (and yes there are some good buying opportunities) so don’t be the one that over pays because someone says Mallorca property prices “don’t really fall”! (each individual case needs to be assessed on it’s own merits and some properties will see lower price reductions than others but no property, however special, can be total immune to what is happening, so as the saying goes “buyer beware” !! 

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Commercial Property Appraisals And Property Valuation In Atlanta GA And The Southeast US – How Much Is My Property Worth? Frequently Asked Questions

There exist many reasons for seeking professional valuation of your commercial property, from preparing to sell to seeking funds or investment to upgrade. Commercial property appraisals should be approached with the expert assistance of a licensed appraisal professional – who can most effectively and properly execute a property valuation in the Atlanta GA or surrounding area.

Following are some important considerations to note, and answers to frequently asked questions, provided by Fletcher and Company. Fletcher & Company is a full service land, residential, industrial and commercial Georgia Real Estate Appraisal Firm providing property appraisal reviews, appraisal reports and industrial property valuation throughout the southeast U.S. appraisal coverage area, including Tennessee, North Carolina, South Carolina, Alabama, Florida and Georgia, and metropolitan areas in and around Atlanta including Roswell, Macon, Columbus, Griffin, Lawrenceville, Douglasville, and Fort Valley.

1.  What is the range of services a commercial appraiser should provide?

A truly comprehensive professional appraisal services firm should provide the following services:

Appraisals for federal and non-federal related transaction lending situations

Tax assessment review, advice and appraisals

Advice in eminent domain and condemnation property transactions

Dispute resolution – divorce, estate settlements, property partition suits, foreclosures and zoning issues

Feasibility studies

Capitalization rate studies

Market rent and trend studies

Expert witness testimony

Land utilization studies

2.  What property types are typically covered by a commercial property valuation agency?

Commercial appraisal service providers in the Atlanta, GA area typically provide coverage for:

Apartment Buildings & Complexes

Office & Retail Condominiums

Industrial Condominiums

Hotels and Motels

Industrial Buildings

Mixed-Use

Self-Storage Facilities

Shopping Centers

Office Buildings

Retail Buildings

Subdivisions (Commercial, Residential, Industrial)

Mobile Home Parks

Vacant Land

Farms

Restaurants

Nursing Homes

Gasoline/Convenience Stores

Resort Property

Religious Facilities

School Facilities

Single-Family Residential

2-4 Unit Multi-Family Residential

Rock Quarries

Golf Courses

Hangars

Marinas

Car Washes

3.  When hiring an appraiser, what questions should I ask?

To be confident and sure that the commercial appraisal firm you’re considering is qualified and experienced in their work, the following questions are appropriate:

What type of professional designations do you have and from whom?

Are you licensed or certified in the states you practice?

Like any job you are contracting out, it pays to compare the resumes of appraisers whom you are interested in having prepare a bid. This is the first place to start.

4.  What appraisal approaches will be used in appraising my property?

The three most commonly accepted valuation approaches to value are the “cost approach”, the “sales comparison approach” and the “income approach”.

The cost approach combines the value of the land and depreciated site improvements with the depreciated value of the building. The sales comparison approach compares the property to others and adjusts for differences. The income approach takes market rents, subtracts a vacancy allowance and expenses, and takes the resulting net income and turns that into value using a capitalization rate.

It is rare that all three commercial property valuation approaches are done, and isn’t typically required. Appraisal theory has largely discredited the cost approach as reflective of market value and commercial appraisers seldom provide it except in newer construction and special purpose properties.

The sales comparison and income approaches are the primary valuation methods used for commercial properties. Even then, there are times when one of these approaches does not reflect the market and although it might be performed, it is given little or no weight in deciding on the final value conclusion.

5.  How are approaches to value selected for use in preparing a bid?

Fees for professional commercial appraisers will typically reflect the cost to perform two approaches to value, usually the sales comparison and income approaches. Even if a particular approach is not performed, time is still invested in searching and analyzing data. This occurs most frequently in areas where too few comparable sales occur. There are times when a third party, such as a lender, will require the cost approach to be performed. Let your appraiser know beforehand if this is the case.

6.  If I don’t like the appraised value, what can I do about it?

That depends upon many things. The best place to start is to speak with the appraiser(s) who signed the report. It’s possible that he/she may have overlooked one or more important factors which affect the value of your property; if you mention it in your conversation, you may find the appraiser willing to reconsider the value conclusion. Of course, if you are not their client (such as when your bank orders the appraisal), they are not required to speak about the appraisal and may be in violation of the licensing law or professional standards if they do so.

It’s important to remember that the appraiser is an unbiased third party. Their job is to find out the good and the bad about a property and report it, not to favor a direction. The better appraisals are round-tabled by professional review staff and carefully scrutinized before they are released, so you get the benefit and knowledge of more people than just those involved with the report.

If you are still dissatisfied, you can get a second opinion by hiring another appraiser or insist that a review appraisal be performed on the original report. If there is a large discrepancy in value, you or a third party may be able to negotiate an intermediate position.

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7.  How much do commercial property appraisals cost?

Every appraisal is different, so fees are quoted individually on a per job basis. Generally, prices depend on the number of properties and the complexity of the assignment, though appraisals used as evidence in court cases command a higher price. Fees are normally calculated based on the number of hours it takes to do a report and the fee structure of the personnel involved, with modification for overtime if a rush assignment is required.

8.  Why do special purpose properties cost more?

Special purpose properties require research of a wider trade radius, sometimes the entire United States! Fees are based on time estimates, so the more time that is invested in finding comparable properties, the higher the fee. Also, the market analysis section of the report many times requires a greater amount of research time and it is not uncommon to have to purchase studies performed by industry experts to properly show the dynamics affecting the property type.

9.  What is a typical turnaround time?

Commercial appraisal delivery times typically range from two to four weeks, depending upon the complexity of the property and your needs. It requires one to two weeks to do the research, verify the factual nature of the information, perform a market study of the area and write the report. Typically, delivery times less than two weeks are rush orders and they command a price premium.

10.  How can I help shorten the turnaround time?

The number one way to help shorten the turnaround time is to provide your commercial or residential property appraiser with the written information they need as soon as possible. Copies of leases, deeds, rent rolls, income and expense statements and other items listed on our engagement letter are the needed as soon as possible. Delay in providing one or more of the necessary items will almost always result in a delay in the appraisal process.

11.  If you don’t come up with the value I want, do I have to pay for the appraisal?

Appraisers must maintain a third party position to your transaction. No appraiser can accept an assignment where bias could be interpreted. USPAP has a phrase used verbatim by many appraisal firms on their letters of transmittals:

“Our assignment was not based on the reporting of a predetermined value, a direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result or the occurrence of a subsequent event directly related to the value opinion.”

USPAP is very clear on this issue. Appraisers cannot be advocates for any client. Although it may seem unusual to some users to have to pay for a report that did not provide them a favorable outcome, appraisers governed by appraisal licensing laws must remain objective.

If there is any uncertainty in the value, clients should have the appraiser perform a restricted appraisal first and then upgrade the report to a summary or self-contained if the value is satisfactory. This is acceptable appraisal practice and one not often suggested by an appraiser.

12.  Why are the fees for commercial appraisals so much higher than residential appraisals?

There are many reasons why there is such a great discrepancy. The most important difference is the amount of time it takes to prepare each type of report. Most skilled residential appraisers can do a residential report in a half-day whereas a skilled commercial appraiser needs at least a week.

Residential reports are on a common form with a standardized property type whereas commercial appraisals are mainly free-form documents with information that varies with the property type, market and client needs. Special use commercial properties take longer and can have a multi-state data search radius, thus making it more time intensive and costly to perform than more common property types such as office and apartments.

13.  I paid my lender for the appraisal, therefore I should own it.

The appraisal is legally owned by the client, unless the lender “releases its interest” in the document, typically in writing to us. If the lender ordered it, they own it. If you just want a copy of the appraisal, under the Equal Credit Opportunity Act you can be given a copy of it upon written request of the lender.

14.  If I didn’t order the appraisal, can I find out the appraised value?

Only if you ask the person who originated the order and they provide permission in writing. However, most appraisal companies cannot give you this information because it would violate the ethical standards governing their appraisal practice.

It doesn’t make sense to me to hire you (the appraiser) if I don’t know you’ll come up with the value I need. Can you give me a guarantee?

It is a violation of state laws and the appraisal licensing laws to provide a value opinion without doing an appraisal. Although a guarantee can’t typically be given, in some cases a restricted appraisal can be performed that will tell you what the property is worth. If the value opinion is acceptable, the report can be upgraded to a summary or self-contained format for a higher fee.

15.  I paid for the appraisal. Why am I not entitled to get a copy?

The client is the person who engages the services of the appraiser, usually in the form of an engagement letter. Many times the lender is the one who issues and/or signs an engagement letter, making them the client. It does not matter who pays the bill. Only the client and those whom he has specifically authorized are allowed to receive a copy of the report from the appraiser. If the person who pays the bill is not the client, verbal or written permission is required for the appraiser to release the appraisal to anyone else.

16.  My lender said I need to get an “MAI appraisal”. What is it?

The term MAI, which stands for “Member Appraisal Institute”, is a registered trademark of the Appraisal Institute. The Appraisal Institute is a trade organization. There is no such thing as an “MAI appraisal.” Persons requesting an “MAI appraisal” mean that the report should be prepared by an MAI designated member of the Appraisal Institute. Each appraiser needs to be judged by his/her merits rather than the association to which they belong. *Note – it is considered discriminatory by FIRREA to consider or not consider an appraiser for an assignment based on a trade designation. Fletcher & Company houses three appraisers that are associate members of the appraisal institute and one appraiser that is a CCIM candidate.

17.  Will the market value equal assessed value?

While most states support the concept that assessed value approximate estimated market value; in practice, this often is not the case. Examples include when interior remodeling has occurred and the assessor is unaware of improvements, or when properties in the vicinity have not been reassessed for an extended period.

18.  Shouldn’t market value approximate replacement cost?

Market value is based on what a willing buyer likely would pay a willing seller for a particular property, with neither being under pressure to buy or sell. Replacement cost is the dollar amount required to reconstruct a property in-kind. Rarely are they the same number.

19.  My broker performed a market valuation. Why do I need an appraiser to perform one?

There are many reasons why valuations are required to be done by appraisers. First and foremost, the appraiser is an independent, third party. Many times, the appraiser is the only one in the transaction that does not have a vested interest in the outcome. This is the reason for the creation of the appraisal industry in the 1930′s. Another important difference between a broker’s valuation and that performed by an appraiser is that a licensed appraiser is bound by USPAP, whereas a broker is not.

20.  What are the differences between an informal appraisal and a formal one?

Those outside the appraisal profession have different interpretations of formal and informal reports. When a client simply wants “a number” and not a long document, he/she will often call it an informal appraisal. Those outside the appraisal field often refer to the old “letter of opinion” report as an informal report, although terms such as “update appraisal”, “recertification of value” and “evaluation of real property collateral” have also been used. When USPAP became effective in the late 1980′s, appraisers no longer used this terminology because a letter of opinion and the derivatives above became a violation of multiple USPAP regulations. Now known as the restricted report format, appraisers are required to do substantially more work to issue this type of report.

21.  I’m told there are three types of “formal” reports I can usually order. What’s the difference?

The final appraisal product delivered to you depends on the type of report specified by your agreement. The parameters of the three types of appraisal reports are defined by USPAP. The primary difference is in the terms describe, summarize and state. Describe means to provide a comprehensive level of detail, summarize is providing a more concise presentation of the information and state means to provide a minimal presentation of the information.

For “formal” reports, USPAP dictates that appraisers can issue three types of reports.

Self-Contained:

In this report option, the appraiser provides all of his/her data and rationale that was used in the development of the appraisal. All conclusions and data sources are fully disclosed and discussed. Two practical tests can be used to determine if a report is a self-contained document:

1. The content of the report fully describes the data, reasoning and each conclusion to such a degree that there is no need to consult other data sources or to inquire how the appraiser reached a conclusion.

2. Information sources cited within the report are included in the document, within reason. Citing a book does not require the inclusion of the book in the addenda, but market studies or other material articles cited in a report should be included, especially if the appraiser relied upon them for supporting important conclusions. This is the type of report most often needed for commercial property lending.

Summary:

In the summary report, the appraiser summarizes his/her findings rather than fully describing them. This is a much shorter report than a self contained and many lenders accept this reporting type. Most residential appraisals are done on forms that are summary reports along with non-complex commercial assignments. The appraiser may summarize the data and his/her conclusions without explaining the full reasoning behind them.

Restricted Report:

This is the shortest type of report. A restricted report only states the conclusions of the appraiser with no explanation on how they were derived. Restricted reports are generally used internally or when a value must be reported quickly. Many clients order restricted reports when time is of the essence and then have them upgraded to a summary or self contained in the future.

An important caveat is that USPAP does not allow a restricted report to be used by anyone other than the client or someone intimately familiar with the property, so if the appraisal will be viewed by other third parties, a summary or self-contained report must be prepared. Appraisers cannot “recertify” this type of report to any other lender.

22.  What type of report do I need?

The appraiser is in the best position to tell you what type of report you need. He/she is required by USPAP to determine the scope of the assignment, the function of the appraisal and use of the report. To do that, he/she will need to understand your needs, so the appraiser is in the best position to recommend one or more of the above choices and to counsel you on what choice(s) would be inappropriate.

23.  What is the difference between a valuation and an appraisal?

The words valuation and appraisal are used interchangeably. There is no difference between them. The confusion began when lenders started using the term “evaluations” in the early 1990′s, implying that they were not appraisals. Soon, the “e” in evaluations was omitted. This issue has been addressed at length by the appraisal community and the Appraisal Foundation (the creators of USPAP) and an evaluation was found to be an appraisal. As discussed earlier, there are six possible combinations of appraisal and report; evaluations are not among them.

10 Ways to Boost House Value

1. Create Space

Knock out a non-structural wall, or even remove that kitchen island. Anything that opens the space and creates a sense of flow in the house is generating a response from buyers who can afford to be choosy. For the price of a few hundred dollars, you’ll transform the feel of the house. Right now buyers want a wide open floor plan, the living room right off the kitchen. They are into big spaces.

A kitchen island can also be an asset, creating needed storage space. But if the kitchen has enough cabinets, it could pay to haul the island away. Homeowners might want to consider a moveable island. You can adjust them to you needs.

 

 

• Knock Out Walls and Remove a Doorway
• Replace a Wall with a Breakfast Bar
• Tear Down a Pass-Through Wall

 

2. Prune, Limb, and Landscape

Tangled trees and unkempt bushes can obscure views, darken interiors, promote mold, and block a good look at the house.

People forget about their trees more than almost anything. Yet, landscaping is one of the top three investments that bring the biggest return. According to a recent survey of 2,000 real estate brokers, an investment of around 0 or 0 dollars in landscaping, can bring a return of four times that. It could really make a significant difference in the price. Nobody likes to spend money, but landscaping might even be the most important thing, even if owners have kept up the house.

Overgrown landscaping is a problem at all price points. People say, ‘Where’s the house?” If buyers can’t see what they are getting, they just move right on.  And if neglected, mother nature may go wild at considerable cost. A fallen limb from a poorly cared tree could caused you a lot of money in damage.

• Work with a Tree Removal Pro
• Prune Shrubs and Small Trees
• Clean Up Hedges

 

3. Let in the Light

The number one item you must consider when boosting your home value is lighting—everything from a dimmer switch to the popular skylights—which noticeably enhances a home’s appeal. Dimmers allow you to create a mood.

Less expensive than framing in a skylight, sun tubes—also known as light pipes, sunscoops, and tubular skylights—use reflective material to funnel natural light from a globe-capped hole cut in a rooftop down through a ceiling fixture and into a room. Tubular skylights, sunlight is nice, and moonlight is even nicer.

A few other ways to light things up: Fix broken panes, make sure windows open, and consider lights that use motion detectors to turn themselves off. Remember high wattage bulbs make small spaces feel larger, and soft lighting brings warmth to empty spaces.

• Install Sun Tubes
• Open a Painted-Shut Window
• Solve Your Compact Flourescent Lighting Problems

 

4. Don’t Put Off Care and Maintenance

Before thinking about a fancy upgrade to the kitchen, address the basics. Insulate the attic, repair plumbing leaks, replace rusty rain gutters, inspect the furnace and the septic system, replace or repair leaky windows, install storm doors, weed the flower beds.

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These kinds of fixes go a long way toward value. Starting with a couple hundred dollars on a few things could increase the value of your house by a few thousand dollars. People are surprised by that. It’s exciting. People think they have to put in a lot of money to see a big difference and they really don’t.

Investing in maintenance and repairs is not only moneywise; could also be crucial to a sale. Brokers and agents from across the country say the houses that get attention in this buyers market are in tip-top shape. What’s important in this market, now more than ever, because there is so much inventory, the houses that sell are in pristine condition and are priced to the market.

• Insulate an Attic
• Repair Corroded Pipes
• Inspect and Maintain a Furnace

5. Go Green

If maintenance and repairs are in hand, put the greenbacks into green efficiency. If your heating or air conditioning systems are old, new ones are so much better, with savings of up to 30 to 40%. Another example: for ,000 for the unit and installation, with ,100 back in green tax credits, a solar-powered water heater could save you as much as 80% on your water-heating bills.

Research published by The Appraisal Journal estimates that energy savings add twenty times the annual savings to the value of your property. Energy savers make your house more desirable. Do the update green, because everyone is now, for the first time in five years, asking about the utilities.

• Install a Solar Hot Water Heater
• Shrink Your Energy Bills by installing energy efficient products around your house and insulating your walls and windows.

 

6. Home Begins at the Front Door

Don’t underestimate the power of a front door. People make up their minds in the first seven seconds of entering a house.

Surveyed brokers like a working door bell, and don’t forget an overhang, such as an awning or portico, above the front door. If you don’t have a way out of the rain, or shelter from the sun while you are fumbling for your keys, you are really missing out.

If you’re up for more exterior upgrades, move to the back or sides of the house. People get back dollar for dollar for the decks they put in. Even in the snow-laden housing market, the right deck on the right house can be an eye-catcher. I had a home come onto the market with a small yard. It was about 20 by 30. The owner had encompassed almost the whole area with a deck. The buyers really liked that. It dressed it up and enhanced the area, making it an extension of the living space. If the deck is done with the right material so that it will stay nice-looking and in good shape, it’ll hold value.

• Upgrade Your Front Entry
• Consider a Portico
• Build a Small Deck

 

7. What’s Under Your Feet?

Don’t undervalue the materials you’re standing on. Ninety-four percent of real estate pros recommend spending some money on floors. But it doesn’t have to be a lot of money. For an estimated average investment of 00, brokers report that the return in value comes in at up to ,000.

And you can spend even less than that. A few well-placed nails can eliminate distracting squeaks. Other small projects with a big impact include repairing broken tile, patching damaged floor boards, and tossing out the wall-to-wall carpeting.

In some cases, however, a new floor is in order. A broker in New Jersey says one would-be seller’s house might’ve sold were it not for a kitchen floor that drew questions from buyers. The number one problem was the fact that her floor was really personal: blue and green vinyl. It clashed with the other upgrades in the kitchen. Everyone kept saying, ‘That kitchen!’.

If you want a wood floor that holds value, we suggest engineered hardwoods. If you like cork, floating cork wears better than cork tile which is glued down and can peel.

• Fix a Squeaky Floor
• Repair a Broken Floor Tile
• Install a Cork Floor

 

8. Easy Bath Upgrades

Brokers, one and all, say spiffing up the kitchen and bath is a sure bet for adding value to your home. Surveyed brokers say these kinds of improvements can get expensive. It may not be economical to do a major renovation if you are trying to spend as little as possible before putting a house up for sale. But some upgrades are cheap, easy, and fast…especially in the bathroom.

Replace frosted glass for clear glass, clean the grout, remove rust stains, apply fresh caulk, update doorknobs and cabinet pulls, replace faucets, and install a low-flush toilet. Even buying a new toilet seat can make a difference.

• Caulk Around the Tub
• Replace a Bathroom Faucet
• Install a Low-Flow Toilet

 

9. Neutral Wall Colors

If you’re getting ready to put a house on this circumspect market, don’t allow walls with chipped paint to go unmaintained. If you need to do more than a touch up, choose neutral colors.

Get out of your personal taste. Buyers want to be able to project their own ideas onto a space, and sellers can help with toned-down wall color.

• Paint a Room
• Paint Doors and Windows
• Paint base moldings, window sills and crown moldings (if any).

 

10. Remove the Question Marks from Your House

We call it the “What’s that?” factor, and whatever it is (1950s wallpaper, a broken front step or cracked threshold, green-and-blue vinyl flooring), fix it or remove it. We recommend getting the impartial advice of a friend who can tell you what’s drawing attention and raising questions for the wrong reasons. The more questions, the more people are likely to say, ‘We don’t want that house.’ Sometimes it’s the quick fix that someone put in thinking, ‘I can live with it.’ Those fixes bite you back later when it’s time to sell because prospective buyers are looking for more than jerrybuilt solutions.

• Replace a Threshold
• Strip Wallpaper
• Remove Vinyl Flooring

“Home among the gum trees” South West Sydney style. Dropping property values, rising interest rates, riots in the street, and an old lounge chair. Enjoy!
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House Assessment How Much Is My House Worth If I Sell It Now

The mortgage crisis continues to rock the real estate world and affect many home owners. In fact it was announced today that almost one million home owners are loosing their house to foreclosure. This does not include the over 380,000 home owners who fell behind on payment this last quarter.

With the continuation of increased foreclosures there is no doubt that home prices will continue to decline. The real estate market has many home owners asking themselves should I sell my house now or wait. Other home owners are asking themselves, now that I need to sell my house, how much is my house worth? Also what is the best way to get a house assessment?

Well first things first. If you are not behind on payments, not going through a divorce, not in foreclosure, or not being relocated by your job, it is assumed you do not need to sell yours house. If that is the case, and you do not need to sell your house I suggest holing onto it for another 3 to 5 years before selling. By that time the real estate marketing should have settled and you will not have to take a loss.

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If you are in a home selling situation where you need to sell your house then you need to act quickly, because the real estate marketing continues to decline. Your first step should be to get a house assessment or find out your homes value.

If you wait to sell your house you should plan on selling in two to five years from now. It is going to take some time for the economy and real estate marketing to bounce back.

However if you need to sell your home quickly then start the process now. The first thing you will need to determine is your homes value. You need to know this so you know if you owe more for your house that what it is worth. If you do owe more for your house than what it is worth do not just walk away from your house. You have many home selling options.

The fastest and easiest way to get a house assessment or find out your homes value is to contact a local home buyer in your area. Local real estate home buyers are very knowledgeable of your local real estate market and can let you know your best selling option.

When it comes to selling your house fast you need to evaluate all your selling options, and there are many. Sell your house fast for cash, sell your house on the open real estate market with a real estate agent, sell your house quick to a real estate investor or we buy houses investor, lease option your house, sell it online, do a rent to own or sell it as an owner carry.

If you need to sell your house the first step is to determine your homes value. The fastest way to find out what your house is worth is to get a free offer from a local real estate investor or home buyer.

Increase Property Value by Using Zillow to your Advantage

The equity we have in our homes is getting more and more important for us. Increase home value is what all of us want to achieve when we sell our house. There are many websites available to help us increase home value through renovations, decoration and other improvements to the house. But before we start there, it is important to know what our house is worth today, because this is the first step to take if we want to <a rel=”nofollow” onclick=”javascript:_gaq.push(['_trackPageview', '/outgoing/article_exit_link/5166959']);” href=”http://increasepropertyvalue.com”> increase property value</a>.

There is one key tool that estimates the current value of our home: Zillow.com. Established in 2005, Zillow is an online database of real estate. Part of the database is the home values or “Zestimates”. The Zestimate is calculated using a proprietary algorithm that uses publically available data to estimate purchase price and rent of a property.

Zillow periodically updates the algorithm to get closer to the real value of the houses. The most recent update in July 2011 has reduced the median error in the valuation from an average of 12.7 percent to 8.5 percent. This is the national average, and the actual error for your house depends among other things on your location.

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In addition to the Zestimate, the database also provides a value range. This brackets the Zestimate, and your actual house value is expected to be within the value range. This also gives you a level of certainty of the value: the smaller the value range the higher is the accuracy of the Zestimate, and vice versa. The variation comes from the quantity of data available for the house and its neighborhood.

Many potential homebuyers take a look at the Zestimate before purchasing a house. It’s a good guide to the value of the property and it shows a lot of useful information about the property. There are many misconceptions and myths about Zillow, and one is that the estimated property value is accurate or that your real property value has to be within the value range they provide. But even when buyers are aware that there are limitations to the Zestimate value – the real value might be higher or lower by a certain percentage, it still sets the expectations when they view the house and when they start the negotiation process.

The seller is therefore well-advised to take a look at the Zestimate as well, and also at the data that are recorded for the property. If the Zestimate indicates a house value that is well below the price you want to achieve in the sale, then you may run into a problem. It is important therefore that you are aware of the Zestimate and also that you address any errors that may be in the database. There are several steps you can take that have an impact on the Zestimate. Taking care of the Zestimate is one way to increase property value and to make sure you achieve the sale price your house is worth.

Find out more information about what you can do to improve the accuracy of the Zestimate and get the money your house is worth, by visiting http://increasezillowvalue.com

 

 

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Property Value Orange County CA – Factors That Contribute To Price

There are many factors that contribute the value of a home property. Interest rates and the economy will always play an active role in the equation and can directly effect supply and demand which is the first factor we consider when determining home property value.

Supply and demand is a major factor contributing to home property value. If there is a large quantity of unsold property in an area the buyers have bargaining power and can negotiate prices down. On the other hand too little inventory in a given market has the opposite effect. This can cause propety values to rise dramatically. Houses for sale in highly sought after neighborhoods with little inventory can almost always command a higher than average price.

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While all factors come into consideration location is key in determining the value of a house. Sand or City? Foot for foot, homes near the ocean or located in a major metro area are almost always valued higher than those in the suburbs. You can make all the home improvements in the world but if the property is in a remote location that is where it will stay.

Another key factor to consider when determining home property value is to compare your home with active local listings. While all properties are unique and will command a different price a general price range can be cultivated using this strategy. We look at similar houses currently on the market, expired listings and houses that have sold in the surrounding areas.

Along with location and comparables the neighborhood surrounding your home can affect the value of your home. A neighborhood with a prominent school district may be more desirable than a neighborhood with high traffic, dark alleys, noise, or potential natural dissasters.

Another consideration in property value is the house itself and upgrades to the structure. Landscaping, remodeling the kitchen, installing wood flooring, new paint, tile roofing, energy efficient lighting all can increase property value. When planning a major remodel make sure to speak to a professional to ensure your money will be well spent on upgrades. While a coy pond in the entry way may be part of the paradise you envision it may not have much appeal to the home buyer who is terrified of fish.

How To Utilize A Public Property Records Search

When it comes to purchasing property for the first time, prudence can be a virtue. Often there are unforeseen items about any property that can prevent things from going as smoothly as one may imagine. Even the most seasoned property investors experience this. Researching public property records can inform the buyer of any issues relating to the property to be first cleared up before the final decision to buy is made.

It doesn’t matter if you are a first-time home buyer or even a sophisticated property investor, purchasing a home or property is a decision to be made with care and diligence.. One in which an individual wants to be well informed. This is even more essential for couples in search of the house of their dreams. Since this is a new process it is much easier to become enamored with the shopping experience and neglect items that could make the process a vexing and regretful one. Without any doubt a property records search is always required in any property purchase.

It’s normally the case where buyers will have to see many homes in hopes to acquire the ideal one to live in for raising a family. Real-estate investors typically own many rental homes, but they consider it from a renter’s perspective due to the fact that they will be renting to a family. Experienced owners also know that public property records are accessible for anyone to acquire property data. Sometimes they may do a property records search before they begin full talks with the property owner or entrust a good faith deposit as earnest money. First-timers usually are not aware of this type of search or even recognize how crucial it is to research public property records on a house they may be thinking about buying.

A public property records lookup can expose information pertaining to the present mortgage information, legal description, present market value, ownership history, neighborhood details and other relevant data. Knowing all of this is helpful in determining if a property is actually a good purchase or not.  

How do you conduct a property records lookup? Gone are the days of taking trips out to the local country office, waiting on attendants while paying pricey processing fees. It is much more efficient nowadays to work online and utilize a high-quality database website service that provides public property records searches for a yearly membership fee to execute unlimited searches. The concept of instant reports delivered to your computer screen in a printable format is a technological blessing.

New home buyers now move through the experience with what experienced buyers utilize for due diligence. So if there were any sticking points that surfaced regarding the property it can be dealt with smoothly before negotiations go forward. The property owner will commonly deal with these issues prior or they will adjust the asking price of the property. The information that a property records search reveals is a huge benefit.

Jacksonville Property Values Down, Home Sales Up!

For the first time in at least ten years, the property values in Jacksonville have gone down.  According to the property appraiser’s office, the commercial market value had dropped 6.49 percent from last year.  This have caused sales of existing homes to rise statewide and in Jacksonville. According to the Florida Association of Realtors, the median sales price continued to fall compared to about a year ago resulting with prices being down in nineteen of the twenty markets.

In Duval county, the taxable value, or the value an owner pays taxes on for their property, has dropped even further by 7.61 percent during the same period as when the market value fell.  These are surprising since values have stayed flat from 2007 to 2008 and increased steadily other years.  Residential property has declined 8.2 percent in market value, which resulted in the increase of home sales in Jacksonville. Sales of single-family homes have gone up 16 percent, in Jacksonville, compared to around this time last year.

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The Florida Association of Realtors has reported that the median price in Jacksonville is 2,000, down 18 percent from a year ago.  The statewide median price has dropped down even lower to about 0,000, which was down 28 percent from last year.  This can be accredited to the sales of foreclosures and other properties that have been sold at a discounted rate compared to other homes on the market, according to analysts with the National Association of Realtors.

The decline in property values, along with increasing vacancy rates, has driven the property owners’ net income to go down.  In Duval county of Jacksonville alone have decreased in revenue estimated at about million because of the drop in property values, million of which are from commercial property values.  Property owners in Jacksonville will be at least be holding on for a while until the prices go back up to what they had paid for it.

If you are a first time home buyer, now is the perfect time to look for your first house.  Be sure to look out for foreclosures and other properties that are at a low price.

For more information please visit <a rel=”nofollow” onclick=”javascript:_gaq.push(['_trackPageview', '/outgoing/article_exit_link/1395920']);” href=http://www.AlberreAppraisalGroup.com>www. AlberreAppraisalGroup.com </a>

Another mostly empty retail plaza in suburban Tampa, Florida.
Video Rating: 5 / 5

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Property Values Going North in Chennai Cbd

Mostly driven by strong demand from multinational companies, IT, banking and financial sectors commercial rental values in Chennai’s Central Business District (CBD) that encompasses Nungambakkam, Salai, Anna Nagar and Adyar areas have increased by 5-15 per cent in the past six months, sources inform, adding that these companies require Grade-A quality office space in Chennai but are not satisfied with the present state of infrastructure.

Current commercial rental value in Chennai varies from Rs 30-55 per sq. ft, while rental values of commercial properties in Chennai viz. offices and shops located at CBD region is reported to have the highest rental values at around Rs 45-55 per sq. ft. These rental values decreases off CBD region of about Rs 35-40 per sq. ft.

Chennai properties around the south-west part of the city are likely to enjoy a northward rally in the next couple of years. The business opportunities created by the modernization of airport would boost the property values in the areas around the facility. As per the reports of MagicBricks reports, the capital value for a residential apartment in Vela Chery hovers between Rs 2,500 and Rs 3,000 per sq. ft, at present. The market observers say that the capital values and rentals have already corrected by about 10-20 per cent in the past 8-12 months and market is apt for investment purposes.

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According to the property experts, the areas of Guindy and Vela Chery would be among the most-benefited. Besides, the property prices in Chennai’s Saidpet area are also likely to go up as the airport project would progress.

Property investors might also be interested in locking properties around Inner Ring Road, in expectation of earning handsome gains. The road connects the central city localities like Kodambakkam and Mambalam with the airport.

Most encouragingly, the hotels and hospitality industry can leverage the benefits by securing suitable land areas in the areas. As the number of incoming passengers would rise in Chennai, demand for hotel rooms and service apartments would trigger like a bullet.

For more details on Chennai Property Prices, log on to magicbricks.com

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Mallorca Property Market Report October 2010

How time flies! It is 6 months since I wrote my last Mallorca Property Market Report and it is always a little bit worrying going back to reflect on what one has said and, whether with the benefit of hindsight, an alternative conclusion might have emerged! Back in March the big question was whether we could call the “bottom of the market” and what that might actually mean in practice – one thing is a market that has touched bottom and ready to move up the gears quickly, with real growth just around the corner, while the other is a market where values have bottomed out but the expectations are much less about growth and much more about “stagnation”!

My conclusion at the time was that we may indeed be able to call the bottom of the market if we were to define it in terms of reaching the “bottom of the cycle of underlying residential property values in Mallorca” (please note the very important reference to underlying values, something very different to, for example, asking prices!). More specifically my March 2010 report concluded as follows:

1.Underlying values to bottom out at current levels
2.The evolution of asking prices to vary dependent upon whether they have been set realistically / adjusted sufficiently to account for the significant falls in property values.
3.Future growth in values to be non existent in the short term and very limited and restricted to underlying inflation in the medium term ie no real growth in the next couple of years. Modest growth over above general inflation levels in the economy to follow thereafter at levels of 1-3%
4.Special properties with “unique” qualities – front line; very good sea views; restrictive planning conditions – rural fincas; high quality developments etc to perform better / out perform the market in the medium / long term.
5.Land values to hold down prices in the medium term as developers take advantage of cheaper land to sell at these new lower levels for the medium term. Long term shortage of supply, save for those in urban areas and for “mid range” apartments, like Palma, Inca and Manacor, should see values rise

Alongside these conclusions I set out a few “tips” or recommendations for both owners and potential investors of Mallorca residential property. These were:

1.If you are a lifestyle purchaser or investor with an income return bias start to look at the emerging buying opportunities BUT..
2.”BUYER BEWARE” it is all about value and ensuring that you buy at an appropriate level and don’t over pay on unrealistically priced properties.
3.Look at new build where good discounts are available (but beware of off plan unless your deposit(s) are backed with a bank guarantee)
4.Look at properties with “defensive” qualities, as set out in (4) above, for greater short term security
5.Look at land to hold as a long term investment / to build a home. Particularly rural plots, front line or with very good sea views etc

So what has been the reality of the last 6 months? Have my conclusions been largely borne out or has hindsight led us to see that we should have reached alternative conclusions?

Lets start by reviewing the statistics and data that have emerged since the March 2010 report and what the so called specialists have been saying. But before that let’s enjoy the headline that greeted me this week that none other than the Spanish Prime Minister had just called the bottom of the property market in Spain! While I am immediately cynical when it comes to anything said by a politician, particularly when it is a Foreign PM talking to US investors in a desperate attempt to make them believe that everything is fine and “under control” and that they should buy bundles of government bonds at the lowest possible yield, he did seem to be confirming what I said, namely that we are at the bottom and although it is true that I said it 6 months ago, if prices have largely remained unchanged over that period, then it could be said that it was the bottom then as well as now!

The problem for me is that good old Zapatero then proceeded to get over excited, quoting official statistics that appeared to indicate that in many areas of Spain prices were starting to rise ie we had touched bottom and wey hey we are on an upward trajectory again! So let’s, as I say, look at the data that has been coming out, starting with ZP’s own Housing Ministry.

According to new figures from the National Institute of Statistics (INE), Spanish property prices rose (quarterly) for the first time in 3 years. More specifically these figures claim that average prices at the end of June were 1.6% higher than at the end of March although over 12 months prices are still down but by just 0.9%. For the Balearic Islands / Mallorca the statistics weren’t quite as rosy but still offered “some positive” news for those desperate to call the end of anything called recession / crisis / market crash etc! Here the overall figures put property values unchanged for the last quarter but down 2% for the year. For new build property it appears there is a “rebound” with prices up 1.4% even though for the last 12 months prices remain 2.5% down. Second hand property values were down 1% for the last quarter and 1.6% over 12 months.

Interestingly only Navarra in Northern Spain came out with worse data with a small fall of 0.1% in the last quarter. In other words what the Ministry of housing is suggesting is that in all regions, bar Navarra and the Balearic Islands / Mallorca, property prices grew in the last quarter!

The trouble is it is very difficult to take seriously figures which tell us that overall Spanish house prices have only fallen 10-12% since their peak in 2007. The fact that the index suggests prices may have started to rise is not in itself that surprising had the index registered price falls of 30% or more. The problem is that we are expected to believe that, having barely fallen since the peak, prices are now rising again (at least on a quarterly basis) while we are still living out the consequences of the worst recession in living memory, a severe credit crunch, 20% plus unemployment, and a glut of 1 million new homes sitting there empty!

The same Ministry of Housing statistics, but this time for land values, paint on the surface of things a similar picture but equally show where future on going price weakness in the market may come from. According to these figures released earlier this month land prices in Spanish cities fell 14.9% over 12 months to the end of June, although the figures for the first quarter of this year indicate a small 3% rise. That said this 15% annualised fall in Q2 was the biggest fall on record since the Ministry of Housing started publishing this data in 2005. This put the average cost of building land in Spanish cities at 210.7 €/m2. With land values accounting for 30 – 50% of the final value of a property it is clear that while this trend continues the floor under the market for new build housing will remain weak something which effects the wider market as well. In other words with land values falling developers, when they decide to build again, will be able to do so much more cheaply and thus offer them for sale at much lower prices possibly even lower than what they can today for the existing stock! With the stock of available properties still so high and the prospect that new housing can come on stream profitably at lower levels it is easy to conclude that general growth in the market (ie values starting to rise), as we said in March, is still some way off. Obviously where the supply side is constrained because of the location eg front line properties, or type eg rural fincas where planning laws are getting much tighter, both of which are very relevant factors in Mallorca, then the outlook may be a little brighter.

Turning to the quarterly reports produced by Tinsa, probably Spain’s leading property valuation company, average Spanish property prices fell 4.6% over 12 months to the end of August. Furthermore after 9 months of trending towards smaller price declines, this is now the second consecutive month in which the index shows price falls accelerating, from -4% in June, to -4.6% in August. For the Balearic / Mallorca and Canaries Islands the fall was a little larger and stood at minus 5.3% taking the overall fall in the index for the Islands down 16% since 2007 compared to 17% for Spain as a whole and nearly 22% % for the Mediterranean coastal areas. While the differences are what might be expected ie the mainland coastal areas, which bore the brunt of the speculative development boom, have suffered most, all the anecdotal evidence including actual sales prices would suggest that at best the market has fallen by 25%-30% and some what more in the worst effected areas. (: many properties were historically over inflated in terms of asking price at the height of the market, and remain so even as we speak today, so here an adjustment might even have to be be as high as 50% to get back to true underlying value. Obviously where a property was appropriately valued at the peak a 25% reduction might be perfectly reasonable to reflect true current value)

It is important to note that Tinsa’s figures are based on subjective valuations and in most cases these are calculated using asking prices of comparable properties in the region. By nature therefore these valuations are likely to lag the market, some say by anything between 12-24 months. In other words we could quite realistically assume that if Tinsa says the market is still falling and that the pace of fall has started to increase again, then in all likelihood this trend in falling values could well continue for a few months yet. Where I might differ is not with where the figures are going but the time it is taking for the likes of Tinsa to reflect what has really happened ie they are indeed probably at least 12 months behind the times. Since they base their valuations on asking prices it is hardly surprising! In other words the Tinsa figures may call the bottom of the market 12 or 24 months after we really have seen values touch bottom.

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Another often quoted source of statistics, regarding the Spanish and Mallorca real estate markets, is the quarterly Idealista property web portal report. The latest data for the end of the 3rd quarter and released on 1st October, suggested that in Spain as a whole prices had accelerated their fall to a quarterly figure of 2.7% leaving the average value at 2,309€ m2. While this negative statistic was reflected in most regions of Spain, the Balearic Islands / Mallorca saw property price rises both generally and in the various towns (but not all) for which the web portal quote statistics. Here the overall figure stood at 2,371 €m2 in September 2010 compared to 2,286 €m2 at the end of the previous quarter and 2,228 €m2 in September 2009 ie an annual rise of 6.4% and last quarter increase of 3.7%.

Specifically they highlight statistics for the following towns / areas. The first figure shows the average value per m2 as at September 2010, the 2nd figure the change over the last quarter and the last the annualised change (where available). Please note these statistics are based on an average of offer prices in each region and / or town and are not therefore the values at which a willing seller and willing buyer might necessarily agree a sale between them:

Calvia                        3,052€ m2; +11%; +12.5%

Palma de Mallorca      2,446€ m2; +4.8%; +10.7%

Marratxi                     2,080€ m2; +2.4%; n/a

Inca                           1,580€ m2; +2%; -0.5%

Santa Ponsa               2,568€ m2; -3.7%; n/a

Llucmajor                   2,140€m2; +9.9%; +8.2%

Looking at these figures you might well assume that things are really beginning to take off and in many respects with a good sample size in each area one can not be fully dismissive of the findings. By way of comparison, although admittedly with a much smaller sample size, the web portal Facilisimo contrasts and quotes a fall in prices within the Baleraic Islands / Mallorca of 5.3% for the year to date.

Bankinter interestingly reported in September 2010 that what they expected was the market to bottom out but also future growth to be very limited, much along the lines of my March 2010 report and my continuing view. The bank feel that, taking the market as a whole, prices could still fall marginally further, circa 6%, over the next 9-12 months, with the market staying at that level until end 2013, beginning 2014, when some modest growth could return i.e. we are going to bump along the bottom, or as they put it be “walking through the desert”, for some time yet!

In line with my own opinion they also question the Ministry of Housing figures that tell us that prices have only fallen by 12% since the peak, while in reality the Bank feels this should be 20%+ (as you know I would go further than that in many circumstances!).

It is important to put this report in context as it covers the whole of Spain and thus is clearly dominated by the dynamics of the locally driven market, not by a mixture of local and international, like in Mallorca or many parts of the Mediterranean coast. Clearly in Mallorca if there is, for example, a return of consumer confidence in countries like Germany, the UK, Scandinavia etc this may encourage buyers from those destinations to bring forward buying decisions even if in Mallorca itself the local consumer remains weighed down by the fear of unemployment, the impending loss of mortgage tax breaks and the simple lack of household income / savings to meet the demands for larger deposits as banks reduce their loan to value ratios. Generally if buyers from outside Mallorca see the property markets improving in their own countries they are more likely to consider that the time is right to purchase here or at least that the Mallorca market will quickly follow suit. In many respects they are right. We live in a globalised economy and just like I always maintained in the boom years that Mallorca is “on planet earth” when told repeatedly that “prices don’t drop in Mallorca things are different here”, the flip side now is that when the global economic climate improves so will the situation in Spain and Mallorca even though most of us expect it to lag other parts of Europe. What this means in practice is that buyers, in my opinion, have a little more time to look at the options, do market research, identify good buying opportunities etc before there is any risk of the market running away ahead of them! There is always the risk that a buyer may loose out on that one “perfect” property that they fell in love with, because another buyer has come in before hand, but in general buyers can afford to be patient.

If you want to read an article full of caution regarding the Spanish property market as a whole then read this article. Like I was pointing out above, this article emphasis the real underlying weakness of the domestic property market dragged down by huge unemployment number (over 20% and with even the most optimistic predictions setting it at no less than 18% for 2 further years); a financial sector either unwilling or unable to release liquidity into the market and at risk to reductions / removal of the ECB existing liquidity support measures; a mammoth supply over hang (unlike for example the markets in the United States or UK); and a financial sector holding a very large portfolio of repossessed properties which although not currently being flooded on to the market, could be if some smaller entities run into liquidity problems when the ECB cuts the current support measures. All in all the article concludes that not only do they foresee prices continuing to fall they concur that the future upside is a long way off. Patience and market research is their recommendation!

Although regular readers will know I am not a born optimist when it comes to my views on the Mallorca property market I have equally always maintained that it does have some important defensive qualities that should see it suffer less on the downside and recover a little better /quicker when the overall economic environment improves. The supply side is some what better than many other areas of the mainland, having suffered less of a speculative development boom; planning regulations and land zoning are stricter, further restricting the supply side; demand is more widely based (it includes a large number of international buyers in addition to the main local market); and economic improvements in Northern Europe should bolster tourism in the Island and thus put a floor under the unemployment figures. The Mallorca “brand” is also strong amongst the wealthy and there are always new buyers wanting to taste!

In the press there have been a steady trickle of agents, developers and industry representatives that are all supporting (understandably!) the thesis that prices have stopped falling and buyer interest is up within the second home market in particular. Interestingly most concur that prices have fallen by 15-35% depending on the area and the type of property, while others talk of prices going back to the levels of 6-7 years ago, in other words back to the levels before the very largest year on year price increases were delivered. If I had to comment I would argue that while they may be correct in relation to asking prices when they quote 15-35% I think they are much nearer the truth when they talk of values returning to 2003-2004 levels which in most cases would need to see falls of 25%- 40%.

I also caution against taking too seriously comments about asking prices and the need to buy now before prices rise. Many “warn” clients not to sit out waiting for more price falls and owners now prepared to sit out for the right buyer to come along rather than reduce prices further. While I would not disagree that underlying values are at or near the bottom, as I maintained in March, my experience is that few if any buyers are purchasing at asking prices and that many deals are being done well below asking prices. Only recently I asked a reputable agent what he thought various properties would sell for (all had been on the market for some time) and I was given figures between 20% and 35% less than the prices that were being quoted. I am not suggesting this is “proof” of anything in particular but I would say it supports my belief that “buyer beware” is the name of the day and not because you need to buy quickly before the market takes off but because asking prices can be very misleading!

What I am saying is that values are at or near the bottom of the cycle, that pressures for prices to grow are still some way off, with time is on the buyer’s side, but that if you are interested in buying I would definitely be in the market now looking and negotiating. Much better to negotiate now while there are still gloomy economic clouds offering uncertainty yet, sentiment is stabilising, than when everything is looking much rosier in say 12 or 24 months time. It is not that prices will rise during that time but simply that vendors may hold out a little more at or near there asking prices while today most if not all will want to do a deal rather than wait for another buyer that might not come around for many months or more!

At a regional and individual town level in Mallorca here are the views of what one major agent is saying has happened to prices, since the top of the market, along with my own comments:

: prime prices down by around -25% (Note: Supply is by nature limited and long term there must therefore be a firm floor under this market. Proposed improvements to the Playa de Palma area, tram infrastructure etc should all help but be patient for anything requiring public investment!)

: Apartments down by -25-30% although villas with sea views in Genova, Bonanova etc have seen values fall some what less.

: it is claimed that prices have held up and fallen only by 10-15% although they then “admit” deals have been done at levels that are up to 35% down (Note: what does that tell you? Asking prices are unrealistic and out of line with underlying values. The real market is about the value of done deals not asking prices! That said Son Vida will remain a prime address so again there is a floor under the market)

etc: prices down circa -25%

: Prices down by around -15% (Note: With a lot of supply deals are being done some what lower than this figure suggests and with the Port Adriano super Yacht marina development taking shape it is not a bad time to be looking at this area and taking advantage of the weak market to get in to what long term looks an interesting area – luxury marina, 4 golf courses etc)

: Prices down by -20%. (Note: This remains a sought after area despite much of the over development allowed by the previous, corrupt, Town Hall administration. Despite the poor quality of some infrastructure and public spaces in the Ports urbanisations demand is likely to remain long term and should be supported by promises, and hopefully the reality, of improvements agreed by the new Administration).

: It is claimed that prices have held up here simply because owners have been less willing to negotiate ie there have been few transactions / an illiquid market. (Note: Another area with supply very restricted, a quite spectacular natural environment and a “brand name” with an international reputation all of which support the market and make it a good long term investment. The Jumeirah 7* hotel opening in Puerto Soller next year is the sort of investment to further add to the areas “cache”)

Prices are said to be down circa 10-15%. (Note: this is a large area and thus it is difficult to generalise but even in the historically stronger areas, on the Tramontana mountain fringe, eg Alaro, Santa Maria, Binissalem, Campanet, Buger etc deals can be done at up to 25% below asking prices)

: Prices down by up to 30%. (Note: Anecdotally this area was hit as hard as any in terms of the demand tap simply drying up at the height of the crisis while in reality this has always been one of Mallorca’s strongest niche markets. The draw amongst “Pollensa devotees” remains and when demand returns, as it is starting to do, it should return in the long term as a top destination. With this in mind it could well be a place to start looking while prices remain under pressure and “deals” can be done.)

: Prices down by circa 25%

(): Prices down circa -10% (Note: While historically a lower price area, due to it’s relative remoteness from Palma, the new motorway from Palma transformed the area just before the recession got to grips with the market and thus the “re-rating” that some, including myself expected, never took place. This explains in part why values have not fallen as much. The market remains weak however, there are deals to be done and this may well be a good time to get into the area before prices move more in line with other areas of the Island. Costa de los Pinos and Canyamel offer a lot for the discerning buyer looking for quality property, sea views and a tranquil environment)

: similar to the North East with prices historically lower and thus having less far to fall!

As can be seen we have reports saying prices are falling, reports that they are stable and some that they are rising! That all said, and talking of Mallorca specifically, I remain of the opinion that underlying values have bottomed out and that we are now in the low activity / no price change period prior to growth returning.

In effect my conclusions are fairly similar if not identical to what I said in March! For completeness:

1.. There are downside risks but in Mallorca I see these fairly much under control and unlikely to exceed 10%. Buyers should be aware of this at the time of negotiating the final purchase price and in that way can “manage out” some if not all this risk.
2.. In other words do research and know whether the property you want to buy is realistically priced or not. In that way you will know whether you are talking about negotiating a “bit” or are looking to take off a “wholesale chunk” to arrive at the final agreed purchase price.
3. Future growth in values is likely to be non existent in the short term and very limited and restricted to underlying inflation in the medium term ie no real growth through 2011 and 2012 at least and only modest growth over above general inflation levels in the economy to follow thereafter at levels of 1-3%. If I was to change my view at all it is that perhaps real growth is some 12 months further off than I suggested in March.
4. I  strongly believe there is a floor under this market but equally I do not believe that is the same as saying that the prices of these properties should not have been adjusted downwards, just that the extent of the adjustment may have been less and the downside risk of further falls much less likely . That said all depends on whether they were correctly priced at the outset. Some of these properties were ridiculously priced at the height of the boom so need severe price reductions to account for the initial over pricing and now the falling market. It is all property specific and be aware of over generalizing and then over paying for a property however “prime” and unique it is!
5.. Land values will hold down prices in the medium term as developers take advantage of cheaper land to sell at these new lower levels. Long term shortage of supply, save for those in urban areas and for “mid range” apartments, like Palma, Inca and Manacor, should see values rise. It could well be a good time to get in now buy a well priced plot and build your dream home rather than search endlessly for the finished article which is never “quite right”!

And in terms of where I would be looking to buy, and what I would be doing, again not much has changed over the last 6 months but to reiterate I would refer to the following “tips” and recommendations:

1. particularly if you area a lifestyle purchaser or investor with an income return bias . By “in the market” I mean starting to look, getting a feel of what is available, seeing what you like and starting to understand what is available and at what price. Make sure you either do your own research or use a Property Finder / Buyers Representative that can impartially help advise and guide you (don’t expect an estate agent to!) They want a sale of one of their properties while a Property Finder wants a sale but doesn’t mind which one so are impartial at the time of choosing and advising. As I said 6 months ago …
2 it is all about value and ensuring that you buy at an appropriate level and don’t over pay on unrealistically priced properties. Understand who is selling, why and how motivated they are. Understand what the property is really worth and whether there can be a “meeting of minds” in this regards. If not walk away and find another property. If the owner is unrealistic all the best valuation advice in the world won’t get you the property at a realistic price!
3. (but beware of off plan unless your deposit(s) are backed with a bank guarantee)
4., identified in (4) above, for greater short term security and long term capital growth
5.. Look at it either as a long term investment or to build a home. Particularly rural plots, front line or with very good sea views etc but most good plots are worthy of serious consideration, if of course the price is right!

6. In relation to areas of interest I would look, in particular at Pollensa, Santa Ponsa, Soller and surrounds, and the NE of Mallorca. That said it is all about being “property specific”. There are badly priced properties in these areas in the same way as there are some well priced properties in other areas!

Happy hunting! For personalized help and advice regarding property finding and negotiating an acquisition in Mallorca please contact David at info@novipropertymallorca.com or info@mallorcacharteredsurveyors.com

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