BLOG

I got an interesting series of emails just recently that illustrated differing points of view and gross, rampant capitalist greed so well, that I had to share.       A couple from a large city in America came to Croatia with what I gathered to be the sole intention of real estate development on speculation. They set out to buy an old stone house, with a secluded chunk of land in Hvar (one of the larger and lovely islands in Croatia) so that they could renovate the home. I would be completely remiss if I didn't state that this is one of my dreams as well, albeit on the mainland and not an island. The key difference is that at no point did I ever see owning such a home as an investment. It would be somewhere that I´d live and probably see out the end of my days in the hope my kids would keep it. This couple thought they were being incredibly cagey and buy in an area where the property values could potentially grow 500% whenever Croatia joins the EU, which is currently set to be around 2009, but that has been shown to be a bit shaky over the years.       Let me not mince words in saying that I simply hate this kind of thinking. This kind of thinking brings in development that is out of control and doesn't give a damn about the people who live there. This kind of thinking doesn't do anything for the country where it happens because people like this buy, build, then sell to another foreigner once the price is right, thus not giving anything to the country that they're in except maybe some tax revenue and sometimes even that is cleverly avoided. This kind of thinking is greedy and is so often done with the guise from the people doing it that they´re helping the local peoples´ economy or having an exotic adventure in another land and "trying" things.       It appears that the Croatian government agrees with my opinions to some degree. This couple hit no end of dead ends and red tape when trying to create their, "dream". They found that locals were given preference over them, even though they had filed everything correctly. They thought there were bribes going on that had blocked them out of doing what it is that they had wanted to do now, now, now in a typical petulant American fashion. Their impatience was screeching and they were simply astounded that their wanting to develop should have been welcomed by the local and federal governments alike, but these stupid people couldn't see that and only once they join the EU, then they´ll see their mistake.       I only hope that given some time to think about it, these people will learn their mistake. I mean, let's think about it. You move in to a country out of the blue. Okay, that's fine, this happens all the time. But, if you just hang out with fellow expats who are also attempting development, make next to no attempt to learn the local language or customs, and are really just seeing the place you've moved to as a stepping stone to some great wad of cash that you feel is yours just because you´re from a "developed" nation, then why on earth would it come as a surprise that no one would want to help you? Tie in to that fact you bitch and moan about everything that's not like your country because you're unwilling to change and you will always be an outsider. These types of people who come to the US always ultimately find themselves incredibly bitter and ostracized.       The moral of the story is to really only go where you want to live and be part of the people and the place where you're moving. There is always good and bad in any place you can live. You just have to see if it's the good you like and the bad you can tolerate. If you think you can never find a place that meets these two requirements, then it's time to grow up and realize that you are… well, actively stupid.

For those living in the US and specifically in coastal states, we all know how the real estate market has gotten so out of control lately. As you can see in this bit from San Francisco magazine which was written at the end of 2003, the market has been hot for quite some time. But as you can also see in this bit from the SF Chronicle, the market has cooled a great deal in recent months. Notice that it hasn't died, just cooled. Somehow prices continue to increase.       Just today though, I came across a BBC article about the possibility of a Spanish property crash looming on the horizon. They've had a good run for some time there, but the parallels between it and the American (specifically, Californian) market are rather scary. It definitely seems poised to go and I think that the fact that most of the economic growth seems to be centered around the growth in property, it's going to be bad. Unfortunately for the US, we're in nearly the exact same boat with what I've heard to be around 3/5 of the recent growth in the economy based on real estate. But of course, no one wants to talk about that.       While it's easy to draw theoretical conclusions from this and shrug it off as out of our hands, I can't quite shake it. I suppose it's because I had family visiting from Bend, Oregon last week who said that the situation there was a lot like San Francisco with all these people who seemed to suddenly have money out of thin air. In reality they all have money from selling their places in California and moving up to Oregon where the market is slightly cheaper. Sure, there is something of a cushion, but people forget that money runs out and things change. So many folks have bought with these damnable adjustable rate mortgages and are about to get spanked badly with any slight downturn in the economy.       But, back to the BBC article and the fact that they make one very good point in that people only need so many houses. This is a finite market with a saturation point that it seems we are quickly approaching, or maybe we've hit it already and no one really wants to talk about it, because honestly, it's a serious bummer. I guess for myself personally, it's good that I didn't buy property and more importantly didn't buy speculation property to flip as so many have here. Obviously, time will only tell with this, but maybe while in Europe, will be a good time to buy there? I can't tell you how badly I'd love to say an emphatic yes, but know better.