Real Estate Perspective: You Could be Living in Cuba!
Here’s a nice piece of perspective for you: when you start hemming and hawing about the real estate and mortgage industries in the United States, think about Cuba.
Housing In Cuba
According to an article published today by Reuters, Cubans are lining up to do housing deals yesterday. Yesterday was the first day Cubans could legally buy and sell houses in more than fifty years. Before now, Cubans could only trade their homes – many times under the table.
The change was the result of a government reform announced last week, which is essentially loosening the belt of Cuba’s Soviet-style economy in an effort to keep one of the world’s last communist states alive.
Cuban bank workers said their offices were filled with people getting their finances in order and seeking information in a first step toward buying or selling property.
Some reports say many people cannot sell their homes because they would have no place to live. Others are selling because they have large homes but not enough money to eat.
Eighty percent of Cubans own their own homes.
Cuba Housing vs United States’ Housing Market
- Home Ownership: To Cuba’s 80 percent, approximately 65 percent of American citizens own homes (numbers vary by study.)
- Choice of Lenders: Cubans have to use the government bank to buy and sell homes. Americans have innumerable lenders and banks to chose from.
- Financial Support: Cubans have government “bank workers.” In the United States, we have Realtors, mortgage brokers and entire divisions of banks to facilitate the home purchasing and selling processes.
- Proof of Income: Cubans have to prove that the income they present to the bank during the home buying process has been legally obtained. While it is not clear what this means and how it’s done, it sounds like two tax returns and a FICO score might be far easier hurdles to take on.
There are many other differences to consider, as well. Another example is the condition of the real estate available for sale. While there is a housing shortage in Cuba anyway, many of the properties that are established are not inhabitable because the Cuban government also controlled building materials – those that the black market didn’t distributed. NPR interviewed a Cuban black market cement dealer yesterday who stated that much of Cuba is literally falling down. Improvements haven’t been made in years, and only now are Cubans really caring about what their real estate looks like – because now it can be sold. American homes, while there are many being foreclosed on, are generally in far better condition simply because there is the freedom to access materials needed for improvements, if not the means by which to pay for them.
What do you think about what is happening with the housing market in Cuba? Does it change your perspective on what is happening in the United States?
