Celebrating 40 years

Letter To our Esteemed Property Vendors

Filed under: Panorama News

You are all no doubt aware that we are in a very difficult market situation, now even in quality and more expensive properties. The negative press, unfortunately, does nothing but worsen the situation, with its tendency to lump all properties of all types in all areas of Spain in the same basket and magnify doom and gloom. The credit crunch makes a bad scenario worse for those who wish to buy with mortgages: even when they fully qualify for the mortgages, most banks have simply stopped lending money.

Notwithstanding the above, there have been a lot of highly qualified, user-oriented potential buyers looking at properties over the last months, almost as many as prior years, but the inevitable conclusion for the vast majority of them, even when they find properties they are keenly interested in, is to go home without making a commitment, with the intention to return in a few months when they believe the prices will be lower.

In the price bracket under €1,000,000 asking prices are down 25% to 30% or even more from their peaks in 2006. Up to €2,000,000, in the area of 20%. The higher end of the market over €3,000,000 was holding up reasonably well until the shock of the bank and liquidity collapses in September and the amazingly rapid globalization of economic recession since then. Properties most affected are in the less consolidated areas. There have been sales, but generally at severely reduced prices, with the notable exception of truly unique properties which cannot be reproduced, and which a buyer has not wanted to risk losing by waiting.

This is a scenario which is, unfortunately, deflationary. This is no ordinary, normal cycle downturn. With exceptions few and far between, the only properties that are selling are viewed as “bargains” or “distress sales”.

As a professional in this Marbella market for almost 40 years, what advice can I give to Panorama’s vendor clients in today’s market? Here are a few ideas:

  1. The other day, I was discussing the above with one of my closest friends, Lorenzo Soriano from Tenerife, who is an economist, a well-known author of economic, political and human interest articles, an award-winning professor in tourism and in history, and a highly successful businessman, who said to me:”Chris, vendors of properties should take a different perspective in today’s very different market. They should forget what they thought their property was worth, it is no longer a speculative market with speculative prices, and this is a different ball game that we haven’t lived through before. But the cup is still half full, not half empty: sincere sellers in this market, should perhaps analyze their property’s value from the standpoint of ‘What did I pay for the property originally? And what would be a good return, strictly from the standpoint of if I had made an alternative investment when I bought my home – 6% or 7% per year?’ ”

    Calculation of the value of your home in this manner will most likely lead to a much more realistic asking price for the property. Even if you are not in agreement with this approach, it is an interesting manner of analyzing the potential today value of your home. However, for those vendors who bought properties in the last two or three years, or those who may have overpaid in buying their property in the first instance, this analysis will probably be of no use.

  2. Have you considered an exchange? When you sell your home, will you be looking to buy something smaller or larger? If so, you should immediately let us know that you might consider an exchange of your property for another, with either additional money to be paid to you if, for example, you might take a smaller property in exchange, or by you in the case you need a larger property. We have now adjusted our database to locate immediately candidate properties for those who would consider an exchange.
  3. Another manner of reaching the market would be to support your agent or agents with a very well thought-out advertising program. Adriana of our Marketing Department would be pleased to prepare such a plan with budget, under my personal guidance, should you so choose, as many of our clients have in the past year.
  4. And, if you haven’t considered it already, think about allowing your agent to place a “For Sale” sign on the property. Prospective purchasers often drive around looking at different residential areas before going to an agent, and placing a sign is just one more means of reaching the market. Signs produced three sales for Panorama in the last four months.
  5. Also, remember to keep your property tidy and in top condition. A clean property in a good state of repair always shows and sells better than the contrary.

From Panorama’s side, we are very busy showing properties as indicated at the beginning of this letter. We have maintained our full staffing levels, we are making sales, although less volume than in the past, and we have made vast improvements which have just gone “on line” in our already great web site – www.panorama.es – the only Marbella property web site in five languages). We continue investing in our company and have great faith in Marbella real estate, and Marbella itself.

Finally, a word of optimism: a positive direction will establish itself in this market within maybe 6 months, maybe less, or maybe a little longer. At that time, the market will most likely slowly begin to pick up. Quality-area real estate markets always recover first. As indicated above, the general interest of user-oriented buyers in the quality areas such as the Greater Marbella area is still unquestionably present, although in lesser volume than in the past. But one should not expect recovery to 2006 price levels for several years to come. Nor at a sales volume level of two or three years ago, which again, will probably take several years to re-establish itself.

There is very clearly a continuing demand which is building up, and will release itself gradually, for there are many thousands of people– individuals, couples, families– who have their money secure, and who want to live in Marbella. There is little trust now in leaving money with the banking system, and most people no longer trust the stock markets. The inevitable conclusion for many will be that well-located “bricks and mortar” will be among the most effective medium for future long-term investment, coupled principally with usage and the well-known life style factors which make Marbella unique in Europe.

In the meantime sales will be made but, generally, of properties which are very well-priced, or of properties which are viewed by buyers (for their location, price, and condition,) as bargains or distress sales, or properties so special that they cannot risk losing them to another buyer.

Please do not hesitate to contact my daughter, Katinka, who is our Listings Director, or our team member who listed your house originally, or Mary Dunne, our sales Director, or myself, should you wish to discuss the pricing and other aspects of selling your property in more detail.

And thank you once again for giving Panorama the opportunity to work with you.

With our very best wishes for a Happy Holiday Season (and a better 2009!)

Christopher Clover
Managing Director
Panorama Properties
[email protected]



Christopher Clover

Managing Director
Board Chairman

Blog Categories

Blog Authors

Alex Clover - Executive Director & Member of the Board pof Directors

Alex Clover

Assistant Managing Director &
Investments Consultant
Carolina Alaniz - PA to the Managing Director & Support Team Director

Carolina Alaniz

PA to Managing Director
Support Team Manager

Christopher Clover

Managing Director
Board Chairman