Bulle immobiliere?

The Paris Dream nails the current obstacles potential buyers are facing:

Paris real estate prices are soaring, wiping out completely any declines in the last two years with a value increase of  up to 15% overall,  year to date*. While prices are soaring, the highest level ever, volume is down 30% from that of the periods between 2002 and 2006 according to Baromètre MeilleursAgents.com.

A lack of inventory has meant those selling can increase their prices. The historically low interest rates are another factor inflating prices. Large flats / apartments (3 pieces or larger) have also been increasing in the last month or two as families rush to settle in before the school term starts in September.

Ugh.  On the one hand, this explains the recent insane prices and makes me regret that Gobelins apartment from the very beginning like you wouldn’t believe.  On the other hand, I’d rather forgo the Pret a Taux Zero and wait –months or more*– than buy something at prices that are not entirely justified.

Speaking with friends and family back home, who have dealt with entirely different markets — NYC and South Florida — has reinforced this feeling.  When I told a NYC friend how insanely fast properties move here, he got very concerned and described his own search a few years ago, including the time he missed out an apartment because he waited to finish his meal before visiting.  “Yikes!  That reminds me of the NY bubble a few years ago!  Doesn’t that make you worried?”  Due to personal reasons he ended up delaying his search until this year.  Although he hasn’t found a place yet he feels much more comfortable looking now, because of the prices and the better position that NYC buyers are in compared to a few years ago.

And then the property belonging to my South Florida relative was on the market for two years with multiple price reductions before it sold.

I know, it’s silly to compare apples and oranges.  When considering the sky-high prices, the short hours properties stay on the market, the upside down agent-buyer dynamic, “but it’s Paris!” is always in the back of my mind.  But is Paris really so special as to be insulated against a housing bubble, is it really the exception?  I can only hope that la rentrée in September will be bountiful, and fear that I will be writing blog entries here for far longer than I ever imagined.

*Our current apartment is a hole.  But it’s a great location with a lovely concierge and cheap rent.  We can deal.

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2 Responses to “Bulle immobiliere?”

  1. Sam Says:

    I love your blog. I can’t think of any city as beautiful, as magical, as Paris. The Paris real estate market seems to be going crazy. Recent news report confirm that Paris flats are now selling at record prices. I’ve attached one news article. It says the average Paris flat sold for E6600/squ.met in Q2. A news summary on France 2 said that only 20 percent of purchasers actually live in the flats; the rest use them as second homes, or rent them out. I hope the hoteliers start having some success in limiting the huge number of flats being converted into rental properties.

    Having said all that, I think you will find the property of your dreams. It might take some flexibility, such as looking for special areas in arrondissements you may have not previously considered. I wish you the best of luck. For those of us who can only visit Paris maybe once a year, your dream is a true inspiration.

  2. Patricia Says:

    Thanks for spreading the word on The Paris Dream blog. How is your search going. Seems this was posted a while ago. On our end we are in hold mode even though I really would love to be in Paris now!

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