I wrote to you in June on the eve of Greece’s second election in six weeks. Greeks faced a choice between the bad and the ugly. Continue with the agreed bailout plan—more austerity, more unemployment, more emigration, more downward pressure on already-dropping real estate prices.

Or—exit their program, leading to a messy and chaotic exit from the euro; print a new currency that immediately devalues; impose capital controls. Mayhem, in other words. 

By the slimmest of margins, Greece cobbled together a coalition that has agreed that, while they will try and renegotiate, they will play ball with the troika of the European Commission, European Central Bank and International Monetary Fund.

Don’t think this means that Greece’s crisis is over. All it means is that one possible tipping event has passed. There will be many more as Greece’s economy and politics continue to unravel. I expect Greece will ultimately leave the euro. That could be the buying opportunity of a lifetime.

If I’m wrong and Greece muddles through,the pressure on pricing is still all down. (See their first choice, above.) As I’ve written in the August issue of International Living magazine (out next week), the big buying opportunity is still ahead of us.

Money and people continued to flood out of Greece. I saw this first-hand on the streets of Paris on a warm, sunny morning recently. Greeks are coming and buying high-end apartments. A Greek couple I met in a real estate agent’s office spoke sadly of how hopeless the situation is. In fact, I hear from real estate contacts across the globe about how much Greek money has been sloshing around looking for a home. I treat the official stats on capital outflows as a massive understatement of what’s been happening. Much of the cash that has left was “under the mattress” money. Cash that was generated in Greece’s burgeoning shadow economy.

Greece’s islands are having a horrible tourist season. Tourism is the primary export and economic activity. Bars, restaurants, guest houses and vacation rentals are barely keeping the lights on. That’s now—in their busiest time of year. Many will just pack up and go at the end of this season. That’s when we will see the first true wave of fire sales.

I’m on the case of this opportunity on your behalf, picking the brains of old contacts, making new ones, figuring out the best way to buy, and planning the itinerary for my scouting trip in August.

I’m excited. Not just because of the way the deals are shaping up, but because I’m getting to go back to these islands—one of the world’s most magical and mythical places.

Wishing you good real estate investing,

Ronan McMahon

P.S. Funny how things can play out. In Paris, I found a real estate market at the mid- to high-end that has pretty much held up. Expect to pay about 1 million euro ($1.23 million) for a 1,000-square-foot apartment in a good area. There appears to have been reasonably strong activity at this level over the past couple of years. First came the Arab Spring. Buyers came from North Africa and the Middle East looking for some bricks and mortar, and a home for their money. Then more Greek money came to town. Now, the new French government plans to tax high rollers at a rate of 75% on any income over 1 million euro. The rich are talking of an exodus, mostly to London. Will they start unloading their Paris apartments? Probably not. But, we’ll see…