Cuba's New Real Estate Market, Betting on the Future, Wary of the Past

Yoani Sanchez - Award-winning Cuban blogger

Cuba's New Real Estate Market, Betting on the Future, Wary of the Past
Posted: 05/18/2013 5:19 pm

Placing zeros to the right seems to be the preferred sport of those who
put a price on the homes they sell in Cuba today. A captive market at
the end of the day, the buyer could find a lot of surprises in the wide
range of classified ads. From owners who ask astronomical sums for their
houses, sums that have nothing to do with the reality of demand, to real
bargains that make you feel sorry for the naiveté of the negotiator.
Many are pressured to sell, some by those with the smarts to realize
that this is the time to buy a house on the Island. It is a bet on the
future, if it goes wrong they lose almost everything, but if it goes
well they position themselves -- in advance -- for tomorrow. The slow
hurry up and the fast run at the speed of light. These are times to make
haste, the end of an era could be close... say the smartest.

It's surprising to see, with barely any notion of real estate, how
Cubans launch themselves into the marketing of square meters. They talk
about their space, usually with an over abundance of adjectives that
make you laugh or scare you. So when you read "one bedroom apartment in
central Havana with mezzanine bedroom," you should understand "room in a
Central Havana apartment with wooden platform." If they talk about a
garden, it's best to imagine a bed with soil and plants at the entrance;
and even five-bedroom residences, after a visit, are reduced to two
bedrooms partitioned with cardboard. The same mistrust with which people
view the photos on the social networks where young people look for
partners, should be applied to housing ads here. However, you can also
find real pearls in the midst of the exaggeration.

Right now there are at least three parameters that determine the final
cost of a home: location, physical state of construction, and pedigree.
The neighborhood has a great influence on the final value of the
property. In Havana, the most prized areas are Vedado, Miramar, Central
Havana, Víbora and Cerro, for their central character. The least wanted
are Alamar, Reparto Eléctrico, San Miguel del Padrón and La Lisa. The
poor state of public transport significantly influences people's
preference for houses that are near major commercial centers with
abundant spaces for entertainment. If there is a farmers market in the
vicinity, the asking price goes up; if it is near the Malecon it also
goes up. People shy away from the periphery, although among the "new
rich," those who have accumulated a little more capital whether by legal
or illegal means, the trend of looking for homes in the outskirts has
begun. It is still too early, however, to speak about a trend to locate
in greener and less polluted areas. For now, the main premise can be
summarized as the more central the better.

The physical state is one of the other elements that defines what a home
will cost. If the ceiling is beam and slab, the numbers fall; meanwhile
constructions from the 1940s and '50s enjoy a very good reputation and
appeal. The lowest values are for the so-called "microbrigade works"
with their ugly concrete buildings and their little Eastern European
style apartments. If the roofing is light -- tiles, zinc, wood, ceiling
paper -- the seller will get less. The state of the bathroom and kitchen
are another point that directly influences the marketability of the
property. The quality of the floors, if the windows are barred and the
door is new -- of glass and metal -- these are points in its favor. If
there are no neighbors overhead, then the seller can rest easy. Also
very valuable are houses with two entrances, designed for a large family
seeking to split up and live independently. Everything counts, anything
goes.

So far it resembles a real estate market like any other anywhere in the
world. However, there is a situation that defines, in a very particular
way, the value of homes for sale. This is their pedigree. This refers to
whether the house has belonged to the family for forever, or if it was
confiscated in one of the waves of expropriations in Cuba. If the
previous owner left during the Rafter Crisis of 1994 and the State
handed the property over to someone new, the price is lower. The same
thing happens if it was taken during the Mariel Boatlift in 1980, a time
when property was awarded to others after the emigration of those who
had lived there up until that time. But where the prices hit rock bottom
is with those homes confiscated between 1959 and 1963, when great
numbers left for exile. Few want to take on the problem of acquiring a
site that later may go into litigation. Although there are some who are
taking advantage of this situation to buy real mansions in the most
central neighborhoods at bargain prices.

In order to check the location, the state of construction, as well as
the legal past of the house, potential buyers are aided by their own
experience, a good architect and even a lawyer to dig through the
details of the property. Each element adds or removes a cipher, one zero
or one hundred to the total price people are willing to pay. In a
captive market anything is possible; it's as if knowledge of real estate
has only been sleeping, lethargic, and now returns with amazing force.

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