Real Estate

[jjrbus]

I've been looking at real estate in the CM area, just the beggining of the process not sure what I want yet.

I don't know the Asiain/Thailand/CM market, but propety prices seem high, absurdly so in some places.

I had a brief chat with a long term CM resident (20 yrs). It was his opinion that prices seemed to be droping lately.

Any thoughts or opinions on this?

[ovenman]

I'm not sure whether prices are dropping but I cannot imagine how Chiang Mai can sustain the number of housing projects that are springing up in the area. It seems like every time one drives on one of the new ring roads, land is being cleared to start yet another housing project.

[Erwin1011]

The whole of Thailand, with very few exceptions is riding on a crest. It is bound to come down either this year (2005) or the year after.

Bkk is largely overpriced and overbuild. CM is close to crazy...everything is riding on the ideas of K. Toxin to force his home town into development.

I stay out of the market for about six months to see how far its sinking.

[Harmonica]

Historical turn for not just CM or KS;Phuket is even more outrageous. Buy @ 10-20 satang on the Baht in 2-4 yrears.

[GregCV]

I've been looking at real estate in the CM area, just the beggining of the process not sure what I want yet.

  I don't know the Asiain/Thailand/CM market, but propety prices seem high, absurdly so in some places.

  I had a brief chat with a long term CM resident (20 yrs). It was his opinion that prices seemed to be droping lately.

  Any thoughts or opinions on this?

<{POST_SNAPBACK}>

Wow --- you do not know what high prices are apparently. CM is extremely cheap for many people in the world, and when they discover how much you can get for your money in this area, there will be many more coming.

Many years ago --- over 30 years ago, in my home around the San Francisco Bay Area, everyone said prices are too high and the bubble will burst bringing down prices. At that time, an average old house in the SF Area cost perhaps US $150K. It never has burst, almost never going down. Average older home price is now around US $550 in the Bay Area. Many people here nearing retirement age now and are looking around the world for a good place to live, and CM is an excellent target in which I am planning to move to permanently in two years. A decent house in CM at US $50K is very cheap for us. I will sell my house for around US $700K that I purchased 10 years ago for US $250K, and have plenty to live on for the duration.

For savvy CM expats, I would strongly suggest that you prepare for the arrival of many more Westerners by getting involved in the Real Estate Biz and/or building or buying property in the area. Pricing will grow.

Edited December 27, 2004 by GregCV

[PeaceBlondie]

Law of gravity can even apply to real estate. Not everywhere and only seldom, but prices can fall. I've seen them fall 50% and take my life's savings with it.

[jjrbus]

Hey Greg;

Thanks for the response, unfortunately I am aware of expensive houseing. California and Florida are exceptions. People are moving there faaster than they are dying. In my home town in the 70's there was a bubble, it broke. In Toronto Canada in the 80's you did not sell a house, you just signed it over to the bank.

I looked at a piece of property in CM for Baht 18,000,000 it rented for 25,000 baht a month. A rare oppertunity for a shrewd investor? I think not.

If you look at condo's in CM a lot of them are empty. Not for rent, not for sale, not owned by seasonal residents, just empty, being held by investors.

Drive around the ring road and look at all the developments. Then go to the bank's and be amazed at how many of them (the whole development) are up for sale due to forclosure.

Take a walk around and ask people how much they make. I don't know how much she makes but My Thai teacher, who has 2 degrees, 1 in teaching and 1 in accounting. The school charges me US$5 an hour for her services. She is the market you are going to have when you want to sell your house.

But to be frank with you if I would have made several hundred thousand dollars on a house in California, I would not worry the least bit about buying a house in Chaing Mai for 50 or 100k $US.

[GregCV]

Hey Greg;

If you look at condo's in CM a lot of them are empty. Not for rent, not for sale, not owned by seasonal residents, just empty, being held by investors.

Drive around the ring road and look at all the developments. Then go to the bank's and be amazed at how many of them (the whole development) are up for sale due to forclosure.

And here's my thoughts on this....

Empty housing is further evidence that there ain't gonna be a bursting of any bubble in the future in CM. The bottom is already there, prices have already adjusted (perhaps a little over-adjustment already) to the buyer market. Empty housing units are pieces of opportunities that can be purchased at good pricing by a savvy biz guy and be profitably sold to those that are shown the low-cost living that is available in CM. The right entreprenure will recognize that and communicate (promote) this to the over-burdened, high equity homeowners in the States, UK, Canada and elsewhere. Right now, it is the best time to buy in CM, but it won't last long. Communication, i.e. the internet, is making this info available easier & easier each day.

At age 57, I am the first of the huge baby-boomer population in the U.S. that will be retiring over the next 10 years. I have simply shown the pictures, info & pricing of some of the homes available in CM to others in my age group in California, and all of them want to find out more, with a good percentage of them ready to take action. I really want to get hooked up with a good investor in CM to start offering real estate in the area to U.S. buyers, and am confident it can be done (so if you know of the right person that wants to do this, steer them my way).

Living on government Social Security (our retirement money in the U.S.) anywhere in the U.S. is very hard, and Impossible where I live in the San Francisco Bay Area. Living in CM on a Social Security check of $1200 to $1800 a month is comfortably do-able, especially after paying for a condo or house in full or paying very low lease payments. The problem with U.S. people doing this is that Americans (1) don't know about the low pricing in CM, (2) don't know how terrific CM is, and (3) don't understand the legal requirements in coming to CM to live. All this can be cut thru by the right business group with good communication in the U.S. and the right operations in CM.

LOS is not the only target being looked at by those wanting to find an affordable place to live --- other places starting to feel the influx from California are the lower areas of Baja California in Mexico, Costa Rica, and Panama (all of these areas have had big real estate price increases recently that have made them now much, much higher than CM). In Europe, the warmer areas (like Spain) are already in the middle of a real estate boom because of the aging of the UK Baby Boomers. Many years ago, Florida filled up with retiring people from the NE U.S. Florida was cheaper with a better climate (like LOS), but not any more.

This influx of retired Americans is a very good thing for all of Thailand, bringing their money to LOS that will reach most in the country.

So, to return to the beginning question: are prices in CM going to fall in a bursting bubble? My answer is absolutely not --- the area is on the cusp of huge potential that will raise home pricing in CM very much higher.

[jjrbus]

Thanks for responding. This is interesting, the optomist and the pessimist.

Several years ago, when I retired at 50, I spent some time in Mexico. in a place called Lake Chappala (not sure of spelling) Houseing, food, everything very cheap.

They had a year round Population of about 10k and a winter population of about 35k, This is Canadian and American. Many people wanted info on this, but very few would go and even less stayed. Now this is only a 4 hour plane ride from home. Now you try and get Grandma a 20 hour planeride from the grandkids, in many instances it is not going to work.

As far as the empty property goes, what I think I am seeing is investors selling to investor's.

5 years ago my girlfriend and her brother built a large very nice 2 story concrete house for thier parents. This house lacks the american kitchen and airconditiong that we would want. This house cost about US10K to build and sits on US$1500 dollars worth of land. A house like this in a development in CM would bring about US$60K with air and kitchen. seem's like a large markup!

Also remember, this country and goverment does not like westerners, They are looking for quality tourists (rich). Not people who will burden there subsidized health care system.

I am not trying to disuade you from this, I am just trying to look at this from both sides. One of us has to be right and one wrong, or is there a middle ground? I am a senior citizen on a fixed income.

[GregCV]

Thanks for responding. This is interesting, the optomist and the pessimist.

Several years ago, when I retired at 50, I spent some time in Mexico. in a place called Lake Chappala (not sure of spelling) Houseing, food, everything very cheap.

They had a year round Population of about 10k and a winter population of about 35k, This is Canadian and American. Many people wanted info on this, but very few would go and even less stayed. Now this is only a 4 hour plane ride from home. Now you try and get Grandma a 20 hour planeride from the grandkids, in many instances it is not going to work.

As far as the empty property goes, what I think I am seeing is investors selling to investor's.

5 years ago my girlfriend and her brother built a large very nice 2 story concrete  house for thier parents. This house lacks the american kitchen and airconditiong that we would want. This house cost about US10K to build and sits on US$1500 dollars worth of land. A house like this in a development in CM would bring about US$60K with air and kitchen. seem's like a large markup!

Also remember, this country and goverment does not like westerners, They are looking for quality tourists (rich). Not people who will burden there subsidized health care system.

I am not trying to disuade you from this, I am just trying to look at this from both sides. One of us has to be right and one wrong, or is there a middle ground?  I am a senior citizen on a fixed income.

<{POST_SNAPBACK}>

You make good points from a very realistic perspective, and I appreciate it. I have been to Lake Chappala not too far from Guadalajara (up a pretty high hill from the City). Seems like a small retirement community of people mostly from Texas. Nice low-cost housing, but few amenities. No entertainment, only a couple of restaurants, no good stores and you can get bored pretty quickly. I think people need more things to do in retirement (I do, for sure). It does have a nice lake.

A good new house with AC & Western kitchen in CM at $60K may have a big markup and be difficult for most of the current LOS population, but this is very little money for new retired people coming out of Southern California & the SF Bay Area --- the areas I am most familiar with. After many Californians retire having earned US$80K to US$150K per year in their high earning years of their forties & fifties, and getting a retirement payment of around US$2K to US$3K per month, with a savings from their home equity (US$500K is not unusual) and 401K (retirement account, and US$150K-$200K is not unusual), life in CM can be considered very cheap. And I love life in LOS and Thai people, especially in the CM area (but granted I have not spent enough time there). I love all of SE Asia, and would like to spend much of my retirement visiting everywhere in that part of the World with CM as my home.

You make a very good point about how Thailand people & government feel about retirees coming. It is truly in their best interest to welcome new retired Westerners with income & money. That money goes directly into the Thai economy benefiting all that live there. But this point of not being so welcomed is one of the major problems about living there that I ponder. Perhaps as more Westerners move in, it will be realized about the benefits they can offer to the area. I hope so.

I have always seen the glass half full (as opposed to half empty) and in business have always tried to build on the available opportunities. Personally, this has been financially successful for me most of time. So I first look at CM as a nice place to retire, and then I look to see what the opportunities are to build some successful enterprise. That's my nature.

Oh, and the other good point you make is about the travel time (20 hours or so). I quite agree that this is a problem for many. But not all. Anyway, once in CM, why go back (cold weather, heavy traffic, pushy people, noise, frustration, egad!)? Send for the kids to come to CM (they are younger & can handle the travel better).

[jjrbus]

I have never seen the glass as half full, it's always half empty, cause someone has stole half my water. The Dr's. say I'm paranoid. You would be paranoid also if you had all these people following you around.

You hit the nail right on the head about Lake Chappala. The most exciting thing to do was go downtown and watch the traffic light change. The lady that led the arobics class was 73 years old. Nice group of people. I did meet a fellow in Khon Kean that had spent 7 years in Lake Chappala. likes Thailand better.

I am looking for something to do in the Chaing Mai area, I'm not the type that can sit and watch sports all the time,or drink beer all day. I've been looking at businesses, The asking prices are outrageous.

I do like your idea of promoting retirement/realestate in Thailand, not the type of thing I would want to do. but seems to have possibilitys.

[PeaceBlondie]

No better example than Lake Chapala. Does anyone remember the paperback book, "How to Retire on $400 per Month in Mexico"? It was mostly about Guadalajara and Lake Chapala. Guadal. is now the second largest metro area in Mexico (therefore, uninhabitable). According to the tour guide books, the big city sucked so much water out of Chapala that the boat dock is on dry land, many meters from the water. Too much of a good thing.

As for getting people in California or Des Moines to move permanently to Chiang Mai - hah! Most retiring Americans never move more than a few miles away from their old home. Way less than 1%, I'll bet, are willing to leave the country. The thought crosses their mind, but few do it.

Last of all - where are we on the point that foreigners can't own land in Thailand? Before you say, "Oh, I know a lawyer who knows how to do it" - again, that happened in Mexico. You can't own land near the coast, but countless foreigners did. They lost the court cases after building their mansions.

Ask the average pre-retiree if they want to move literally to the other side of the world, to an incredibly hot climate where it rains four or more months per year, the language isn't Indo-European, and alphabet isn't Roman or Greek or Cyrillic, the laws are not the same, the customs are different, the population has some strong xenophobic tendencies, homosexuality is widely tolerated, Christianity is very much a minority, English is seldom or barely spoken, etc...

I love Thailand, in spite of its drawbacks. But I'm old, weird, gay, and a bit crazy.

[jjrbus]

Hi PB

I agree with you. But Greg is right, 1% of the retiring population is a very large #. And these people are alot more adventureous than the generation befor them.

It does take a special type of person, to just up and leave thier comfort zone. Myself, my family is all dead, I never had kid's so it does not matter where I am. I enjoy CM but when I think of those hordes of people moving here, it makes me want to go settle in Chiang Rai.

So you are old, wierd, gay and a bit crazy, so what's the real problem?

[PeaceBlondie]

Hi PB

I agree with you. But Greg is right, 1% of the retiring population is a very large #. And these people are alot more adventureous than the generation befor them.

It does take a special type of person, to just up and leave thier comfort zone. Myself, my family is all dead, I never had kid's so it does not matter where I am. I enjoy CM but when I think of those hordes of people moving here, it makes me want to go settle in Chiang Rai.

So you are old, wierd, gay and a bit crazy, so what's the real problem?

<{POST_SNAPBACK}>

Hi, jjrbus - no real problem; I'm happy as a lark in Chiang Mai. My best friend arrived today and he's really impressed, comparing it to Bangkok, Houston, Atlanta, and Shanghai (he's lived in the last three cities). Good point, jjrbus - ther are some more adventurous souls, such as ourselves. My old stick-in-the-mud friend Barb, who's only lived in three places in 55 years, says I'm the most adventurous person she's ever met. I tell her she doesn't get out enough.

[jjrbus]

Interesting, my friends say I'm adventourous.