Why haven’t Spanish property prices fallen more?
If you’ve read recent press articles you’ll know there is now an oversupply of houses in the Spanish market.
So given that and the tightening in credit restrictions, why is it that house prices have not fallen ?
This from propertydispatches:
Prices of similar properties in the US have fallen hard and quickly, but not in Spain.
As one person comments in the forum, “I’ve been looking at buying a property in the Canary’s now for over 12 months now and have not witnessed any crash. Developers still want the original price for properties “no room for negotiation”. Private sellers are refusing to drop the price on properties that have been on the market for some time, and estate agents continue to put properties on the market based on the values apportioned to properties that are not selling.” So if the market is so bad, why aren’t prices tumbling?
These are the reasons that I can come up with:
First of all, foreclosures in Spain take a long time. It appears that many mortgage lenders take a year or more to respond to mortgage delinquencies, after which the repossession process can add on another 6 months or more. This delays the time it takes for repossessions to come on to the market, so a slump in the market does not translate quickly into distressed prices.
