Year in Review
Happy New Year from Panama Sovereign Realty! As we do every year, we’d like to take a moment to review the past year’s real estate market performance for the Pedasí area, and at the same time offer our outlook for 2024. Remember to sign up for our newsletter on the right (or below on mobile devices) to stay in the loop about new listings and Pedasi market trends.
2023 was another great year for the Pedasi real estate market. The strong demand for residential units that largely defined 2021 and 2022 carried over into Q1-Q3 of 2023. This demand was balanced by existing homes hitting the market and also new builds by “speculative” builders who are building homes to sell. The net result was an upward trend in local housing prices in 2023.
Housing starts in 2023 also hit record numbers. This was fueled primarily by investors who purchased land and are having custom homes built for themselves. We love this trend as it means communities like Costa Pedasi and Haciendas del Toro, among others, are filling in with residents.
Developers are taking notice of the buyers looking for homes in our area. By our estimation, there are 15 new residential communities already breaking ground or planning to hit the Pedasi-area market in 2024. We are excited for these new communities to bring more options for our buyers. On balance, we feel that Pedasi is on a great track to continue to grow and be an even better place to live. With that said, broader global dynamics could pose challenges for the real estate sector in 2024. More on that in our outlook section.
Pedasí benefitted from strong demand for residential units and home lots in 2023. The flow of buyers was led by retirees coming from North America and Europe. Taking inventory of known closed transactions over the past two years, home sales were up over 100% from 2022 and residential home lot sales increased by 60% year-on-year. Several new homes were built in Pedasi’s main residential subdivisions: Costa Pedasi, Roy’s Project, and Haciendas del Toro. A handful of independent builders and developers also kept busy bringing new single-family inventory to market throughout the Pedasi area.
We expect the demand for single-family homes to remain high into the first half of 2024, though we wouldn’t be surprised to see median sale prices decline a bit from the last two years. The cooling off of US and European housing markets will likely cause some chilly winds to blow in the Pedasi market; to what extent remains to be seen.
Los Destiladeros had a banner year for closed home sales in 2022 but unfortunately was unable to repeat the performance in 2023. This was partly due to a lack of inventory after many homes were sold in Los Destiladeros in 2022. Another factor is our local market in general, where homes priced in the seven figures tend to remain on the market longer. On a positive note, the demand for ocean-view lots remained strong, leading to the construction of several new ocean-view homes. The continued popularity of ocean-view properties confirms that buyers are still drawn to the scenic and desirable opportunities in Los Destiladeros.
Clients who have a higher budget will want to explore why some of the wealthiest families in the world own homes in Los Destiladeros. Some of the most amazing luxury homes in the country are built here and occasionally come on the market. These homes are well worth a look, and some of the opportunities aren’t advertised for sale due to the owner’s desire for privacy. Panama Sovereign Realty has you covered of course, so contact us for more details.
Finally, as we already noted, there are incredible ocean-view lots available starting in the $200k-range. We’ve had several clients build fantastic custom homes in this area and move in with an overall investment of $500k or even less. If that is more your speed, let us know. We’ve got some amazing land parcels available with sweeping ocean views and we can introduce you to great custom home builders.
Once again Playa Venao led the charge for area sales, with strong sales performance for both existing and pre-construction home inventory. The demand for properties in Playa Venao which ramped up in 2020, and continued to grow in 2021 and 2022, showed no signs of slowing down in 2023. The main challenge continues to be that investment options on the residential side in Playa Venao are limited to a very small number of existing homes and condominiums. Demand continues to outpace supply, which has prompted several developers to buy larger land parcels in 2023 to bring new projects and homes to market.
The neighboring communities of Cañas and El Ciruelo are also benefitting from the pace of development at Playa Venao. These nearby areas offer a combination of lower prices and a more relaxed, natural vibe that attracts buyers who don’t mind driving 5 or 10 minutes to get to Playa Venao’s bustling beachfront. While finished home inventory is still low, there are some great opportunities to pick up land and build. For example, these build sites in Cañas, or this tremendous ocean view property in El Ciruelo.
Looking ahead to 2024, the Pedasi real estate market is poised for continued growth. We expect the town’s appeal as a destination for both residential and commercial purposes to strengthen, especially as global trends in remote work persist. The ongoing commitment of developers to sustainable development and eco-friendly practices will likely attract a discerning buyer demographic seeking a responsible and conscientious lifestyle.
Infrastructure projects like a new water treatment facility in Playa Venao, if executed efficiently, will further enhance Pedasi’s livability, contributing to the region’s overall economic development.
We must point out that our strong market over the last few years has occurred against a backdrop of massive, post-pandemic economic stimulation measures. As recently as Q1 of 2022, the Federal Reserve was holding the federal funds rate at around zero while also buying billions of dollars of bonds every month. On top of this, historically low mortgage rates in North America and Europe led to higher home prices and a very active real estate market. Many of these sellers cashed in and invested the gains into land and homes abroad. For better or for worse, that party is now over for the foreseeable future.
During the last 16 months, the Fed has raised fund rates by more than five percentage points, and in late October rates on 30-year mortgages punched through to 8.09%! The economic fallout from the post-pandemic stimulation measures is now being felt globally across markets. And while the housing market isn’t crashing (it’s very far from it, in fact), higher interest rates and home prices have caused mortgage demand in the US, Canada, and Europe to significantly diminish from where it stood at the beginning of 2022. We cannot ignore the very real potential that this all has to filter into the Pedasi real estate sector in 2024 and beyond.
The year 2023 was marked by positive growth and increasing interest in the Pedasi real estate market. With its natural beauty, growing economy, and commitment to sustainability, Pedasi continues to capture the imagination of investors and homebuyers alike. As we enter 2024, careful consideration of challenges and proactive planning will be essential to sustain this positive momentum and ensure a thriving and harmonious real estate landscape in Pedasi.
2024 will be another growth year and we are ready to help buyers understand our market and make smart investments, safely.
We appreciate you taking the time to read this 2023 Pedasi Real Estate Year in Review. To stay in the loop on market trends and new Pedasi area listings be sure to sign up for our newsletter using the sign-up form up top (desktop users) / below (mobile users). We’ll make sure to keep everything short and sweet with only the most important updates.
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