February 13, 2012

Don’t Be a Naive Gringo and Fall Victim to the WAY overpriced Real-estate in Cuenca (Part 1)


Almost every day we see advertisements listing WAY overpriced homes in Cuenca, both for the cost to purchase the home and or to rent the home. These ads are geared to the foreigners. Locals aren’t going to buy or rent these overpriced homes. More and more ads are saying they will rent to foreigners or Norte Americanos only. 

And many of the ads are being advertised in English only online periodicals geared to foreigners. 

So, want to help keep Cuenca’s cost of living down?  Want to be sure that when it’s time to sell, you won’t need to find a greater (foreign) fool to pay the price? Then you should avoid the above like the plague.

Remember: Walk Away!! Don’t act interested!!  Keep Looking!! You Will Find Your Ideal Home!!

“Rent to foreigners only”? This is disgraceful, especially to this beautiful country and its Ecuadorian people! Essentially they are saying; “only rich and/or stupid gringos may apply to this rental ad”.  So, if you want to appear rich and or stupid, the easiest and quickest way to do that is just shop at the English only advertisements.  That way you’ll be guaranteed a (much higher) foreigner price.  Oh, and that includes the rentals too.

Another thing:  be sure to compare to “back home prices”. That way, you can convince yourself of what a good deal you’re getting.  

Seriously though, putting sarcasm aside, we are listing sources of how you can find these listings at real local prices in the DIY Cuenca Landing Guide.  How is that? Because they’re geared to locals, in Spanish…in local periodicals…and you won’t have to take anybody else’s word for it, you can see it for yourself…

Why are we so adamant about this?  Because we actually love Ecuador and its people, and we don’t want to see it ruined.  We’re not here only because “it’s cheap”.  We love the landscape and the culture.

Whether you’re looking to rent or to buy the same due diligence is needed, especially of how the real estate market works in Ecuador and having the knowledge of “gringo targeting”. Letting your emotions and desire lead you to purchase, or allowing your pocket book to help you sign on the dotted line just because you have the money and it seems like a good deal when compared to where you live now is making the problem worse.

A devoted follower of our Discover Cuenca blog sent us this overpriced Cuenca home to show us how ridiculous the prices are getting in Cuenca. It certainly does not surprise us, as we see this more and more often in Cuenca, and now after visiting the coast, some of the cities on the coast!

Here is what she said and we absolutely concur with her reaction and feelings. BTW, this is just one example, there are others just like this and it’s growing…

WAY Over-Priced Home in Cuenca!

“Did you see this posting on GringoTree this morning? They want more than half a million dollars for a 4-bedroom house! We moved here from Boulder Colorado which was one of the more expensive places to buy housing in the US. These are Boulder prices! Unbelievable that they can ask that much, even for Cuenca this is WAY up there!”

Yeah, we think it is WAY up there too! Here is what Frank responded with.

Agreed!! What a silly notion. You can probably have that house built for $60 K.
This is disgusting. The greed is colossal. Is there a picture on the offering? Please send the link? Thanks, we may make a post about this...

Below is the ad in its original form…everything they advertise is WAY up there in price. And of course it’s nicely presented in English!!!  They do advertise many expat social events and such that are helpful for newcomers, but the real estate they advertise is out of this world for Ecuadorian prices!   

But we’re not picking on GringoTree.  From our perspective we would not recommend subscribing to any of the English only online periodicals if you are looking for a rental or home to purchase, but if you want to know about the expat social scene then you may want to subscribe.  

We do not want to have any part of “raising real estate prices to foreigners” and this is a big reason why we turned down the HHI offer.

House for Sale or Rent
For sale or rent: furnished 2,800-square-foot custom stone-and-log home located in the southwest part of Cuenca near Avenida de las Americas. Featuring four bedrooms and four bathrooms, a large custom kitchen, separate dining room, three separate sitting areas (one with a custom fireplace), a large porch with views of the city and the mountains all surrounded by a half-acre landscaped garden. This home needs to be seen to be fully appreciated. Rent for $850 per month or buy for $550,000.

FYI: We rent in the same area as this house, our home is a little over 2000 sq ft featuring three bedrooms, 3 bathrooms, and an office, a custom kitchen (all kitchens in the brand new homes are custom here), separate dining room, sun room, living room, a back and front yard, the front yard with views of the mountains. Hardwood floors in living room and three bedrooms, plus tile in kitchen, dining room and baths, plus granite counter tops and wonderful tiled back splash in kitchen. And we rent for $250!!

The only difference in the two homes is we are not on a half acre and this home does not boast a fireplace or 4th bedroom, but the above house does not have an office or sun room either. Knowing the market like we do, we would venture to say this home we are now renting would sell for 70-80K in today's Cuenca market.

Just today we were walking in the main square, Park Calderon, and there it was a big white sign in large black lettering, about three feet long and two feet wide, COMPLETELY IN ENGLISH, pinned to the outside door of an expat restaurant, a for sale sign, advertising a “luxury” condo.  No price listed but you can be sure it will be a North American price.  Not one word was in Spanish.
  
So, what do you think?  Who is that targeting? And who is going to be the greater fool that buys and then can’t get out of it, like the foreigners in Panama that are now stuck upside down in their real estate that they over paid for? So do you really want to take a chance on being in the greater fool chain?  Of course every foreigner that buys at foreigner prices thinks he’ll be able to get out by selling to the next foreigner.  Where do you fit in?

Read Part two of this commentary .... “Can You Still Find $250 Rents in Cuenca?”  Part 2

4 comments:

  1. Well I think it's bad timing for the people trying to pull of these over-priced deals on Americans.

    The real estate boom in the U.S. is over, and I don't think U.S. Americans will look at real estate prospecting with the same enthusiasm as they once did. (Now that it has been proven once-and-for-all that real estate doesn't always go up.

    I would imagine that there will be some cases of gringos showing up with a lot more money than sense and buying things at very high prices -- but i think that this is much less likely than it would have been a few years ago.

    It's a lot of the economic-depression conditions in the U.S. that are forcing so many to look outside of their own country after all.

    What do you think? I'm not there in Cuenca. Do you think a lot of people from the U.S. are falling for these types of deals?

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  2. Good observations! The key ingredient here is gringos not being able to speak spanish AND comparing prices to the US market. If folks would simply take the time to develop a relationship with local Cuencanos and offer them a finders fee to help them locate their homes, I think you would find a totally different situation.

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  3. Excellent point Enrique. We have found that "if folks would simply take the time". Usually, they don't take the time. That's the key. Thanks for posting...

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  4. I have been following your Blog for the last 5 months and it has been very informative and entertaining so thank you. I am eagerly waiting for your DIY Cuenca Landing Guide publishing so that my wife and I can use it when we arrive in Cuenca God willing in May. Being an Ecuadorian myself I can only appreciate what you guys are doing, it is encouraging.

    Lino Ramirez

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