SAN JUAN – The value of housing stock in Puerto Rico has dropped by 25 percent since 2007 due to the recession and excess supply.
The director of the economic consulting firm Estudios Tecnicos, Jose Villamil, told Efe Monday that the loss of net worth among Puerto Ricans from the drop in real-estate prices is close to $30 billion.
The economist stressed the gravity of the situation and said that a rebound in the property market on the Caribbean island is unlikely for at least two years.
“The economic situation doesn’t help,” Villamil said, adding that the construction/real-estate sector is one of the chief sources of wealth in Puerto Rico.
Villamil said that the impact on Puerto Ricans is considerable, given that the savings of the island’s inhabitants are largely deposited in home ownership.
He said that the loss of value of their homes runs parallel to the decline of the Puerto Rican economy in general, now in its fifth year of recession.
The president of the Appraisal Institute Puerto Rico – the chief association of appraisers on the island – Juan Carlos de Jesus, told Efe that real-estate properties have obviously lost value in recent years.
De Jesus said that the fall in prices has been particularly significant in properties of more than $250,000, but added that in buildings of lower value the drop in prices has not been as severe.
He added that appraisers have had no influence on the decline in prices, recalling that the work of those professionals is regulated by federal authorities and the banking system, so that, he said, “their evaluation of properties is completely reliable.”
De Jesus said that appraisers base their information on the market and take into consideration a property’s sales history, the current state of the neighborhood and estimates for the future.
Roberto Carrasquillo, president of an association of real-estate agencies in the city of Caguas, said that the economic crisis and the high unemployment rate – nearly 17 percent – that goes with it have forced many Puerto Ricans to sell their properties for less than their real value, which has meant a devaluation across the sector.
Carrasquillo proposed establishing a work group made up of members of the sector and the government to deal with the real-estate crisis in Puerto Rico.
The Association of Homebuilders, or ACH, which acknowledges a more moderate depreciation in home values than that indicated by the Estudios Technicos study, says that more than 11,000 homes remain unsold on the Puerto Rican market.
ACH President Hans Moll said that the crisis and the downturn of the economy resulted in 2009 sales of only 5,000 homes. EFE