The Bottom is About to Fall Out

As the Jamaica Labour Party took power in 1980 housing prices began to rise.

The market had been ridiculously depressed due to fears that 'communism' was about to arrive and if one had two houses the government would take one and give it to the poor.

People sold mansions in Beverly Hills for the same price asked for a house in Rockfort.

As the JLP took power, prices increased by 100%; and people were buying everything they saw with a 10% down, expecting a rapid turnover.

The house that had been purchased for 45k in 1981 changed hands as soon as the transfer was stamped. Some lawyers slowed the process by fixing money on 90 day calls which were paying 30%.
By the time the purchaser got the house he paid 90k for he could sell it for 240k.

Eventually there was the crash.

The over extended mortgagee could not meet payments because he couldn't get rid of the houses he owned. Others borrowed and left the country; after all, if one had paid 17k for this house which is now worth 4M, get a mortgage and leave.

Banks became the major land holder in Jamaica.
Billions of dollars of property, thousands of dollars of liquidity, and having to pay it out as interest on debentures and other investments.

In the early 90s, banks failed, properties were foreclosed and soon inhabited by squatters. The PNP government created a scheme, which, if intelligently run would have solved the problem.

Of course, being a Kakiscracy, nothing is ever intelligently run in Jamaica.

Squatting was the only way to get land for many people, and so many places turned from Middle Class areas into slums.

In some areas, one house might be captured, the owners of the others would fight to gain a mortgage so as to rent out the premises and live elsewhere or sell, below 'list value' and escape.

In some areas the prices kept going up but there was still buyers. In others it became a joke.

A Valuator, ignoring negative dirt, that is the location of the building and going for how many square foot at how many dollars per foot, insured that vacancy until dismantled by squatters was the result.

Premises in Kingston have stood vacant for thirty years. No one will ever pay more than 10% of the asking cost.

By the 2000s there was a short period of true value.
A house going for 10M was actually worth it.

By 2010 the cost of rental, of purchase became so ridiculous that there is a revolving door of tenents for property which will never be sold.

Persons who assumed they would make the bag on rentals are often out of pocket, because the in and out of renters and the wear and tear leaves many owners with unpaid electricity and water bills, damage and the need to quickly find others to bear the burdens.

With so many houses foreclosed and auctions fetching only a fraction of the so-called value, the time to act is almost over.

Where a land owner of a lot in ghetto which is used as a toilet by the neighbors is 'valued' at 1.8M, (and the only purchase offer received in the past fifteen years has been for 150k) it is clear that the Fantasy which caused the collapse in the late 80s/early 90s is coming over the horizon.

The owner of that lot could probably borrow One Million Dollars. Handing the bank his title, he can happily incur a foreclosure. The Bank, seised of a toilet will never be able to sell it for even half that price.

With money tight, with property overvalued, a defaulting on a mortgage is the wisest investment an owner can make.

The dangers of course, as seen in America, is that when the bottom falls out of housing, when money is difficult to come by, honest mortgagees who lose their job will join the ranks of squatters.

And another financial crisis will engulf Jamaica.