PANAMA - Real Estate & Construction
President, Panamericana de Avalúos
William Herron holds a degree in mechanical engineering from Villanova University in Pennsylvania. He is an expert appraiser both in real estate and in machinery and equipment with over 35 years of experience. He is a member of institutions such as the International Real Estate Institute, the National Association of Real Estate Appraiser, the Panama Institute of Valuations and Expertise (IVAPPAN), the Panama Chamber of Construction (CAPAC), the International Who’s Who of Professionals, the Panamanian Association of Real Estate Brokers and Developers (ACOBIR), and the National Cargo Security Council (NCSC).
There are many factors, but I would like to think that it is based on character and moral principles. We like to say our work is our best presentation card, and this has been carried over to all levels of our organization. Today, I have a team of 48 dedicated and totally committed professionals, 18 of which are engineers and/or architects, including myself. We have an important role in the market as the only company whose appraisal reports are accepted by all banks as well as insurance and reassurance companies established in Panama.
Banks and insurance companies account for 50-60% of our work, with the remaining balance coming from local and multinational corporations as well as real estate promoters and individual customers. I entered this business because I felt at the time there was a lot of room for improvement in the sector. Real estate accounts for about 80% of our portfolio, while the remaining 20% comes from industrial concerns and construction equipment companies.
This is the day-to-day situation, and we never let our guard down. We are in constant development, always seeking ways to improve the service we offer, as we were the first company that enabled clients to download their appraisals. Because of the rigorous analysis of values and tendencies in the market that we maintain, our clients have the assurance that the value and results obtained reflect actual market conditions. We always try to follow up with clients once they have sold their property to learn the final sale price in order to review the accuracy of our work. Our experience shows that the resulting sale price is on average closer to our appraisal and not the client’s initial perceived figure, and banks understand this.
The behavior of the real estate market tends to be cyclical by nature about every 10 years, with reasonably steady growth. However, by the end of the last century until the first years of the current one, the market experienced a slowdown to the point that it was stagnated. We were obtaining lower appraisals in 2001 for properties purchased in 1995 and 1996, much to the dismay of the owners. Until 2004 the market was slow; however, almost overnight in 2006 the market experienced unprecedented growth. A big percentage of that was due to the migration of potential buyers that considered Panama a good place to retire, while others from our neighboring countries that were experiencing political and economic turmoil moved to Panama, creating an impressive and more optimistic market demand with the speculation factor becoming an issue to be considered.
We are here for the long term, and the construction industry is going to continue to grow strong, making the necessary shift to address the huge housing deficit in the middle and low-income segments. Speculation in land and materials is taking its toll, and it is unclear whether or not people will be able to afford properties. Another important point is that interest rates are low right now, but they will at some point in time have to go up. It should be noted that with all of the speculation and price hikes taking place today, banks have been extremely cautious with regard to financing mortgages, requiring buyers to put up higher equity for their properties.