A familiar phenomenon is gripping the Panama property market — FOMO, the fear of missing out. Buyers can see that the worst global crisis in a generation is starting to subside and when that happens prices are going to start going up. Nobody wants to miss the bottom.
This is a phenomenon we’ve seen before. Savvy investors are always looking for the cycles in the market. They’re trying to time the bottom, which was a tough task. As soon as the market starts to go back up, there is a rush of activity as buyers look to swoop in before the market returns to normal.
We’ve already seen the FOMO Factor in effect during the pandemic. Last fall, as governments around the world started to organize a response to COVID-19, we saw a surge in buying, and interest levels soared.
In the first part of 2021, we started to see the beginnings of FOMO bubbling in the market again, as word spread that the vaccines were for real. It was one reason PPR posted a record-setting quarter, with buyers snatching up deals with prices, in some cases, that hadn’t been seen in years.
It’s not just the pandemic causing the phenomenon. Many investors are looking to roll over stock gains before the inevitable pop of the current bubble. The stock market is going to crash, sooner or later — everyone knows it. Shifting profits from stocks into a secure physical asset makes sense, and it is one of the movements we see in every cycle.
But there are pitfalls to the FOMO Factor. It’s easy to get roped into a deal that is too good to be true. Sometimes the price is low for a reason — even in good times, it’s not coming back.
A few tips:
Stick to quality. There is always a limited supply of top-quality apartments
Don’t try to time the market. No move is perfect. If you see the deal you want, which meets your personal goals, you should pull the trigger.
Evaluate the building. There is a big difference in the maintenance and financial health of Panama City buildings. There is security in the best buildings, which hold their value and attract renters.
Pay attention to the rental market. Even if you’re not thinking of renting an apartment, consider its value in the rental market. As Panama City’s largest property management firm, we often see how the rental characteristics can affect the long-term value of an apartment.
Don’t get swayed by emotion. If a deal looks good to be true, it often is. Stick to the facts, analysis, and realities of the market.
FOMO is a powerful force, but it shouldn’t be the primary reason to buy. We believe market fundamentals and the prospects for growth should always be key parts of any analysis.
Want to learn more about the current state of the market? Contact us now:
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