Saturday, November 21, 2009

344 Days

The average number of days that a flat or house is on the Spanish real-estate market before being sold is now 344 days. This number is up from last year and steadily climbing. In Barcelona this number is up 40% in just 1 year. In Madrid this number is up 32% in just one year. In the last 5 years this number has grown 400% (in the example of Barcelona), meaning that flats or houses or 4 times as long on the market before being sold.

What do we learn? The housing market is bad, few buyers and many sellers. What else? The sellers are not willing to reduce the prices significantly. They still want to hold on to the "old" prices, the prices they paid in the past to buy their home or their investment property and they are mentally not willing to accept that the prices can go south. It will take more time before Spanish people will open up their mind to the fact that real estate is not the perfect investment vehicle that can never fail. People in Spain have been spoiled in the past, having gone through many decades with steady increases that has lead them to believe that real-estate prices are impossible to go down. Now we see how difficult it is to change ones mind on an issue that is detrimental to oneself.


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