My Crystal Ball
Volume XIX, Issue 49
Jokingly, I often remark that my crystal ball is very clear and that I can see into someone’s future. This is not because I’m a soothsayer or a medium, but because I’ve seen certain situations so many times that it’s relatively easy to predict someone’s future path, especially someone headed to France to live, part or full-time.
Just like I did 27 years ago—come for one year and never want to leave and never did—I see this happen over and over again. So, I warn you now, that if you spend one full year in France, you’re likely never going to want to leave!
With 2022 on the horizon, the various experts in the French property market have their own predictions, many of whom have been asked by a variety of publications and websites. Of course, it’s all guesswork, as whatever we believe will happen in the future is only in one place: our heads. This is very important to understand—that the future and our excitement or fear of it is not reality in any sense of that word as the “future” never actually comes. We live only in the present and the future is simply what we imagine, good or bad or indifferent.
We know that right this moment we are not out of the woods with Covid-19 and its variants. As I write this, governments are trying to decide how to handle the outbreak of the variants, Omicron and Delta creating most of the havoc. According to some experts, the French property market will continue to follow the trends of buyers who are seeking more space and more outdoor life as a result. That’s true for now as long as the variants continue to render us relatively helpless, but will it be the case once we start to live a more normal life? And when will that be? Tough to answer…the future is in our heads, remember? And just about anything is still possible.
It’s interesting that people are seriously seeking income-producing properties. I am not surprised. At one time, the French thought it “gauche” to generate an income from one’s own home, but not anymore. The bottom line is that they need the money and appreciate getting a return on investment, but this is a relatively new concept in France. Prior to the pandemic, buyers looking for revenue-generating properties didn’t have a ton to spend—about €150,000 to €250,000, but now things have changed and the budget has increased from €400,000 to €800,000…almost triple. Châteaux buyers are on the rise in order to create event venues as a result, but generating a revenue from these properties is very tough, especially when the maintenance costs can be astronomical. (I do not recommend ownership of a château!)
Inventory is low and it’s a seller’s market. Negotiations on price are therefore limited, a new idea for rural properties that two years ago rarely sold at asking price. Fortunately, sellers are morally obligated to accept asking price, and that means bidding wars are rare. This keeps the market less volatile.
The limitations of travel to France seems to be hindering buyers, but this hasn’t been true for our North American buyers who trust us to find them fabulous properties they purchase sight-unseen. So far, we have no unhappy clients who have gone this route. It makes sense, too, because prices are definitely on the rise. It’s the basic economic concept of supply and demand driving the price increases. This is happening even more outside of the cities, but the cities are experiencing appreciation, too. The south of France is seeing a huge boost, particularly along the coast. Everyone wants to be near the water it seems. Expect prices to go up, so you might want to act sooner rather than later.
Meanwhile, lenders will continue to be risk-averse and only seek out qualified buyers who meet their criteria. Eligibility is becoming more and more difficult. Americans have the hardest time getting financing, all thanks to FATCA. Very few lenders will even talk to us, and it’s getting worse by the minute. This doesn’t make it impossible…only more challenging.
So, what do I see in my crystal ball? I see more frustration over the inability to travel freely; more desire to make a move to France and more happy clients allowing us to find them their perfect “pied-à-terre” in France.
Contact us if this sounds like you!
Have a wonderful Christmas with family and friends. You’ll hear from me next week for the last French Property Insider of the year, after a few days of experiencing the holiday season in neighboring Italy!
The Adrian Leeds Group®
P.S. We have developed relationships with a number of financial and tax experts to assist our clients. For more information, please visit our Global Money Services page today.