Panama is not immune to the Great Economic Slapdown affecting the rest of the world. Many foreign buyers who purchased property in Panama a few years ago now have financial problems back in the U.S. and Europe. Some of them need to sell their properties and are willing to give steep discounts.

There are also bank foreclosures. These are hard to find in Panama because you have to know the right people inside Panamanian banks who control the sale of foreclosed properties. But there are some very good deals. Recently, for example, a very nice, small coffee farm near Volcan was sold for about one third of its normal value -- just enough to pay off the owner's bank loan. That's all the banks care about -- getting enough to pay off what they are owed. And that is not usually a large amount, because banks in Panama have always been very conservative about lending money.

What kinds of properties are foreclosed? Every kind: houses, farms, large development parcels, partially completed condo buildings and developments where the owner has run into trouble and cannot service his bank loans.

There are some especially good deals with distress sales of development properties -- highland, ocean front and beach front -- that were purchased by foreigners in the boom years. Now, the market has slowed and they cannot get bank financing to develop their properties, or they got bank financing and cannot pay the loans. Many of these vendors have financial problems in their home countries and need to sell. There are some spectacular deals out there for buyers who have cash and want to make sound, long-term investments in prime real estate

Can you turn around and flip these properties next week for a fat profit? No. Don't even think about it. That is the kind of attitude that got us into this mess in the first place. Those days are gone. The kind of buyers who should get into this market are those with a 3-5 years investing horizon. We are now in a market that will reward patience and a long-term perspective.

But before you start calling and asking whether there are huge discounts on the properties we have listed at Chiriqui Coastal Real Estate, the answer is no. Property prices are not sinking in Panama, as they are in Florida or Las Vegas. Prices are generally holding firm.

The foreclosures and distressed property deals I am talking about form only a small part of the real estate market in Panama and they are rarely advertised as such. No one wants the public to know that they are desperate for cash and will sell for half the price they are officially asking. These are under-the-counter deals.

I happen to know, for example, of a spectacular 100 hectare beach-front development property that is listed for sale at $20,000,000. That is the official price, but I know the owner and I know he will sell for half that price.

I also know of a beautiful 20 hectare property with over one mile of beach-front that was advertised 8 months ago for $4,000,000. It is now being sold to a client of ours for $1,400,000.

Those are the kind of deals that are available.

Right now, there is blood on the streets (metaphorically), and that is the time when smart money decides to buy.

If this interests you, email me at allen@chiriquicoastal.com or give me a call at 507-6447-3689.

Allen Rosen

Chiriqui Coastal Real Estate

chiriquicoastal.com