Dec. 3, 2009
Paris, France
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Dear Live and Invest Overseas Reader,
"The Poles are leaving," remarked a friend over lunch one afternoon in Paris earlier this week. He was speaking of Ireland.
"You know the market is dead now that the Poles are moving on."
The Poles began moving in just about the time Lief and I took up residence on the Emerald Isle ourselves. This was more than a dozen years ago, when, for the first time since the Famine, this country was a net-importer of population. Not only did this generation of Irish, upon finishing their education, opt to remain at home to launch their job searches, but the Poles and others from throughout Eastern Europe began seeking out the land of the Celtic Tiger in search of opportunity.
Fast forward 12 years, and the jobs are gone, along with the economy that supported them. Gone are the construction gigs...gone are the international call centers...gone is Waterford Crystal...and down, down is the pub trade. There aren't enough jobs these days for the Irish themselves, much less any immigrant labor force. So the Poles, et al., are pulling out.
From the day we arrived in Ireland, I began predicting the collapse of both the Irish real estate market and the country's economy in general. We invested in a house certain that we were buying at the top, sure that we'd never see our money out of the place. We bought because we needed a place to live with our children, not because we expected to reap any profit.
Forecast anything long enough, and you're likely to be proven right. In this case, nearly a decade of further growth preceded the validation of my soothsaying. The market began to tumble about a year after we sold our Waterford home and moved to Paris. In retrospect, we timed this market brilliantly--executing our exit strategy as if on cue. In truth, it wasn't nearly so much genius as good fortune. Still, we walked away with more than three times our money.
And, meantime, we enjoyed a half-dozen years of Irish country living.
When we planned our move from Waterford to Paris, again we faced the question: Should we invest in an apartment of our own at this point in this market...or rent one? Friends whose opinions we respected advised against it. Paris is over-priced, they assured us. This is not the time to buy.
We reviewed historic pricing figures for the areas where we were interested in living...compared these with current values...and agreed that, yes, center-city Paris had enjoyed a long run-up, and per-square-meter prices in this sought-after district were at all-time highs.
Still, we decided to buy. We found the best deal we could for the size and type of apartment we wanted to own, and we took the leap. Maybe the place will never be worth more than we're paying for it today, we told ourselves, but, again, we weren't buying for profit. We were investing in a place to live with our children in Paris and a
pied-a-terre that would be an important part of our eventual retirement plan.
This week in Paris, everyone I've met has spoken of "
la crise!"...and, certainly, the real estate market in this city has softened dramatically over the past year. Still, right now, our little apartment in the 7th
arrondissement is worth at least double what we paid for it in euro terms...and the euro is worth 50% more than it was the day we closed on the purchase. If we were to sell now (if we were able to find a buyer in this current down market!), again, we'd look pretty smart. But, again, I have to tell you the truth. It's more
chance, as the French would say, than clairvoyance.
Here we are today in Panama City, deliberating once more. Should we invest in the house we're currently renting in Casco Viejo? The market is this part of Panama's capital, in particular, is over-priced; sellers are generally unrealistic in their asking prices.
On the other hand, it's a great house in our favorite Panama City neighborhood. And Panama, like Paris, is a market we're committed to, a place that fits into our long-term plans.
We're inclined to leap. Maybe this 150-year-old renovated Spanish colonial will never be worth more than we might pay for it. But we won't let that worry us. We'll buy for the long haul, and we'll enjoy every year of New World old-town Panama City living along the way.
Kathleen Peddicord
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"Kathleen, I like your publications. Your coverage is amazing. I just read your article about
Prague (Praha), which put a smile on my face. I got the feeling that your correspondent got ripped of by tourist traps, probably because he didn't speak the Czech language.
"He has some good points, but Praha and Karlovy Vary (Karlsbad) are the two most expensive cities in the Czech Republic. The Czech Republic has many beautiful cities without tourist pitfalls and where the cost of living is about half that referenced in your article.
"I speak fluent Czech and Slovak, and I lived in the Czech Republic for 20 years before moving to Valencia, Spain, to finish my education. If, in the future, you need any Czech translation, I am at your service."
-- Karl K., Czech Republic
"Kathleen, I hope you don't mind, but I have to point out that '20 Jahren Wallfall,' as referenced in your recent
Berlin article, is not correct. The correct reference would be "20 Jahre Mauerfall.'"
-- Marion De Mena, Panama Circle Member Liaison, Panama City (a native of Soest, Germany)
Danke sehr, Marion.
.
