Purchasing property in France?

[Steve K.]

Does anyone have experience owning property in France? My sister in law is looking into it and asked me for advice, but I know very little about the process of buying and selling in France as an American. She’s been living in Paris for a year now (Montmartre), and she’s just sick of renting and is talking about buying. She’d be looking in that market (Paris). She has a year left on her student visa, and is uncertain on how she’d be able to continue living in France after that. Any general info on owning RE in France as an American appreciated! Thanks in advance.

[Javier De la Rosa]

@Joaquin Camarasa, asking prices in Spanish main cities have been overvalued for a long time already... I think the recent adjustments we are experiencing on Idealista and other portals do not reflect yet the market reality, but people are just trying to revert prices back to what the "fair value" should have been a few months ago.

The market is frozen so far and sellers are holding their breath for a while, waiting for more clarity to come soon. Desperate sellers may have been adjusting prices more aggressively, but I don't think this is happening widely yet.

By the way, the Bank of Spain (BoS) has officially requested surveyors to adjust their valuations down on a preventive 10%. If current buyers ask for an additional 10% reduction due to "covid" or any bargaining reason they may have, prices could effectively go down ca.20%.

That being said, my gut feeling tells me that as soon as the covid situation eases, prices will increase again, at least for a while. Think of it: interest rates are on historical lows and many investors are afraid of stocks, so they have to allocate their excess cash. Plus, man is the only creature to trip over stone twice...

In my view, the real "blood on the streets" will be seen in 12-18 months when people currently furloughed will be officially unemployed and unable to service their debts. Then the "short-term demand shock" in the economy will again be a risk for financial institutions, and I think the story should sound familiar to some of us...

But I might be completely wrong, of course. The truth is nobody knows, but I just spoke yesterday with a colleague from the Bank of Spain and they pretty much are expecting a foreclosure fest in 2021-2022.