Despite initial and widespread pessimism about the development of Bulgaria's real estate market in the middle of the global financial crisis, the sector evolved and adjusted to the new realities having escaped the worse case scenario.Source: SofiaechoOn February 8, Address Real Estate presented a report that examined the market's development in 2008 and what was to be expected in the midst of the economic crisis.Address said that the beginning of 2009 brought new rules to the market. The buyer was now put forward as the sole arbiter of property prices. A home's value had become that which the buyer could afford to pay. Pressed by the credit crunch, investors instead preferred the certainty of cash. The new market rule commanded that a majority of the asking price was offered in cash, with a resulting smaller amount for the buyer to pay in the end.National statistics showed that every fifth home in the country had been put up for sale, which signified that supply greatly outnumbered demand, but sellers have not been ready to stampede for a deal at any cost. During the first month of 2009, about 115,000 homes were listed for sale in Sofia alone. However, Address' analysis indicated that fewer deals were being finalised for two main reasons: either banks were refusing to grant the requested loan at the last minute, or buyers were deciding to look for a better offer.According to the report, the Bulgarian property market was beginning to free itself from the flow of speculative capital. About 20 per cent of the total homes offered for sale came from owners who had invested in real estate, hoping to reap a comfortable profit and then move on. Foreign investors and Bulgarian investments coming from abroad were becoming scarce, the report said, adding that such was part of a worldwide tendency of postponed or carefully weighed investment possibilities.Speculation was often heard over the course of 2008 that a number of investors would go bankrupt, yet there had not yet been a single project in Sofia that had been abandoned, or with it, the people who had made a deposit for a piece of property in the facility.The report said that in 2008, property prices nationwide had jumped by 22 per cent. But buyers at present were reluctant to buy off-plan and finalising a deal could take up to 20 weeks. Address said that, thanks to the stricter loan requirements introduced by Bulgarian banks in the middle of 2008, the local property market had been saved, perhaps, from entering a gruesome stage with an avalanche-like effect of an increasing number of defaulted loans.The report said that, with banks' support, the property market was gradually passing to its next logical state, that of fewer buyers, a real estate frenzy reined in and a correction of prices."This tendency urges many analysts to conclude that the market is dead," the report said. "The truth is that changing one's home as something that is often dictated by personal factors in life. Therefore, people will always buy property. All we are parting with now is the hysteria."