Cuenca Housing Market: Renting and Buying

cherylpomeroy | November 20, 2016 | 0 Comments

Cuenca Housing Market: Renting and Buying

Edificio “Bajos del Rio” — our rental apt on “segundo piso” has a view of Yanuncay River Park but no balcony

There are a number of Cuenca expat blogs that have discussed the local housing market over the past 8 years — see blogroll. However, a lot has changed since 2009, when International Living listed Cuenca as the #1 retirement destination in the world. As recently as five years ago there were few online realtor sites; “for sale” and “for rent” signs on buildings and in newspaper ads were the primary means of finding property, and a few services such as this one catered to North Americans needing inexpensive rentals ($250 to $450/month). That same site reports that rental prices in Cuenca have doubled since 2011.

As of 2016, there are oodles of online real estate websites serving Cuenca. Gringo Post and Craigslist-Cuenca are English language sites listing property, but whose main focus is not real estate. Virtually all realtor websites are of local Cuencanos and in Spanish; however, most offices seem to have an English speaker. My guess is it’s possible for expats without a command of Spanish to work with local realtors. They include: Bienes Raices Catedral, AustroVentas, Mandato Paredes, Bienes Plus, Casas Cuenca Inmobiliaria, AustroPropiedades and PlusValia. The OLX Classifieds is used by any and all selling or renting property.

Although other bloggers have shared their experiences renting, I haven’t noticed many people blogging about real estate lately. I hope my experiences since June 2016 will help Cuenca newbies and wannabes.

If you’ve not been reading Cuenca High Life for years, here’s some background:

Land prices in Cuenca are the most expensive in Ecuador. Here are a few reasons why: 1) Cuenca is the most popular destination for Ecuadorians working abroad to invest in and return to; and it continues to attract foreign residents. 2) It’s considered safer to live here than in Guayaquil or Quito. 3) The city is “not too big and not too little” — people can live a more relaxed life (vida tranqila) here than in the other major urban centers. 4) The regional economy has its origins in lucrative mining — silver, mercury, copper, gold — and mining operations continue today. Cuenca is — and has been — a relatively wealthy city. 5) It is in a lower risk earthquake zone than the coast and the northern highlands of Ecuador. 6) The housing quality and architecture here are superior to that of Quito or Guayaquil.

North Americans are sometimes blamed for high prices in Cuenca real estate — I was angrily lectured about this by a downtown tienda owner (whose store I ceased to patronize) — but studies show that North Americans are a small percentage of total housing transactions, most rent rather than buy, and have less influence than is generally presumed.

Our Experience:

Although we’ve had a bumpy landing in Cuenca since June 3, one of the things that has gone smoothly has been finding places to live. Good planning helped.

My Three Point Plan:

1. Reserve a 1 bedroom furnished rental apartment on airbnb for 2 months or more. Upon arrival, unpack enough to get comfortable and make a few friends. (Ecuadorian acquaintances will help in opening a bank account — you need 2 references — and many other things.)

2. Once comfortable in the airbnb rental, begin looking for desirable one-year rentals on Cuenca realtor sites — see list above. Call and/or email about the rentals of interest. Hook up with several realtor services and find a well-priced, well-located apartment or house for a year. (Within a week we found an unfurnished 2B/2B apartment in a brand new elevator building in a good location, Tres Puentes, with a view of Yanuncay Linear Park.)

3. Six months or so before the one-year rental ends, decide to rent for another year OR to buy. If buying, begin the search again for desirable housing at online Cuenca websites, have realtors show you properties and wait for a property that “wows” you.

“Se Vende Esta Propiedad” This Property For Sale

It’s still possible to find a property by calling the owner who has posted a sign on the property: Se Vende or Se Arrienda. I walked down different streets for months thinking I would find a gem this way but I didn’t see properties of interest.

The one issue I’ve had is with the real estate agent who showed us the one-year rental property. He told me, while I took notes, that the rent was $400, the aliquota (condo fee) was $30, the water would be about $5 and the electric would be about $25. Because this was a good price I didn’t negotiate. I didn’t think to verify this with the owner or condo manager. If I had known the condo fee was $50 higher I would have been sure to scowl and balk at the price. I regularly do this when a price seems high and it usually has the desired effect of reducing a price. Further, the papers John and I signed said nothing about the condo fee — only the rent. The bottom line: beware of low quotes for condo fees! Most fees in elevator buildings are $80 or more. You may want to verify the amount before you agree to the rental price.

Finding a house to buy has been easier and quicker than expected. In less than a month of visiting properties we found the perfect house: built by an owner architect 25 years ago (and not been updated, so we can afford it!), in a quiet close-in neighborhood (near Totems) within walking distance of downtown, yet 1 block from a major intersection and bus lines. The house features include: vaulted, beamed ceilings with skylights in entry and living room, 3 beds, 2.5 baths, formal dining room, study/office, laundry room, interior garden, natural light in every room, 2500 sf of living space, ample front and back yards, large kitchen with windows & skylight, and only a little over our budget of $200,000. In 3 years of looking online I had only seen a handful of houses with similar features in good locations come on the market — all more expensive. We were lucky. As the sellers need to wait a couple of months and we are in no rush, we look forward to finalizing the sale early in 2017. We will spend a few months prepping the house: upgrading electric for 220 electric appliances (washer-dryer & new induction cooktop), finishing brick bedroom walls with drywall of plaster, having an induction cook top and new oven installed, and adding new light fixtures with high efficiency lights.

Mies Van de Rohe Minimalist Specials

I confess. I’ve been looking at properties online for 3 years and feeling guilty about “wasting” time. But, hey, it wasn’t a total waste. I learned the names of Cuenca neighborhoods, got to know the map of Cuenca very well — John joked that I could become a taxi driver when I arrived — and discovered the growing number of realtors who posted their properties online. I knew what the asking prices were, which ones sold quickly and which didn’t, what locations I wanted to live in that were walkable, what size lot I wanted and what house features I wanted. I knew, for example, that we were not interested in over 95% of the housing stock. Most properties for sale were either too far out for us (Totoracocha, Machangara, Chaluabamba, San Joaquin, Banos, Colegio Borja, Misicata, Narancay, Ordonez Lasso, Tejar, Racar, El Cebollar, Ricaurte, and many more), had too small a lot (1,000 sf or less) or were Mies Van de Rohe, Minimalist specials. The latter houses are extremely common, new and full-featured townhomes, but I felt trapped in a box of masonry when I visited them, even when they had a small backyard or a balcony.

( I will locate and describe many of the neighborhoods in a later post. Amazingly, most online sites do not provide a map or description of the location. It was my biggest challenge during 3 years of visiting realtor sites — locating the damned property!)

There is no MLS — Multiple Listing Service — in Ecuador. Instead, each of the many Cuenca realtors has their own list of properties. However, some houses are listed on multiple sites, some houses are sold out from under the agency — we visited such a house with a realtor — and a great many houses are listed in the online classifieds: cuenca.olx.com.ec. I have yet to learn what the commission amount is for the sellers from whom we are buying. I have seen a few sites that advertise 1% commissions.

There is no buyer’s agent — I called each agency myself — and the sale process is quicker and easier here than in US. Although knowing Spanish makes this process easier for me, I find that most agencies have a designated English speaker so English alone may be enough. Our lawyer advised us that $2000 was to give as “earnest money” to hold the house until sale is complete. Once the realtor agency gathers all legal documents proving ownership, clear title, absence of liens, and paid up water and electric bills, he will review them. If the documents are all in order, we complete the financial transaction. It could all be completed in 2 or 3 weeks I’m told.

As far as I’m aware, home inspections are not customary here. This is a buyer beware country and we have heard of instances where problems were found after the fact, such as leaky roofs, leaky plumbing, and windows that don’t close. Of the houses and apartments we visited, we saw issues of concern: vertical and horizontal cracking masonry, amateur plumbing, lack of handrails on stairs and landings, basement garages (filled with cars) open to the central stairwell (fire and CO hazard) and house grade much lower than street (water drainage issue). We did not test the electrical systems but assume such tests would have found safety concerns. Since I was a home inspector in the US and both of us have building backgrounds, a visual inspection and discussions with the owner sufficed. In this housing market it is BUYER BEWARE.

Light & Water Bills and Condo Fee:

Paying the aliquota (condo fee) and the electric ((“la luz”) and water bills each month was challenging the first month, but is now simply a matter of visiting an ETAPA office and the JEP Cooperativa at the right time each month and bringing a little cash. Once we FINALLY get residency visas and are allowed to open a checking account, I hope to set up automatic withdrawal — veremos (we’ll see). One thing I’ve learned not to do is pay monthly bills ahead of time — the condo fee, electric bill, water bill or even my Claro phone bill. It is either not allowed or causes problems the next month. Don’t do it! Pay the small late fee, as is common practice among the locals, if you’re out of town when it’s due. The only things I’ve paid early without a problem is the rent.

Furniture:

More challenging than navigating the housing market has been finding furniture we like! Stay tuned for our strategies on furnishings.

Photos of our 800 sf 2B/2B Unfurnished Apartment near Tres Puentes: