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Munoz Rivera avenue in the Hato Rey Financial District in San Juan, Puerto Rico. The economic picture remains bleak, thereby hurting real-estate prices. But this presents opportunities, especially for the wealthy and for retirees.

ANA MARTINEZ/Reuters

This story is part of an ongoing series on global property that examines the shifts and trends in the housing market on the international stage.

She's a realtor, but she prefers "the Queen of Real Estate in San Juan!" says Leticia Brunet Gonzalez with a laugh, and a flourish of Spanish-accented English over the phone.

Ms. Gonzalez has been selling homes in the capital city and around Puerto Rico for the past 42 years, she said. And as the world focuses on the island's debt and economic woes, Ms. Gonzalez still has her sales pitch down pat.

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"They need to sell," she said of some wealthy clients she deals with. Bargains are abundant for lavish property. "So what cost $5-million, now it's selling for $1-million and a half or $2-million."

As a territory of the United States, with much the same federal financial and banking regulations, and the same greenback currency, Puerto Rico's residential properties should be a relatively attractive investment – if it weren't for the island's economy.

"We're part of the United States, which means that their investment is protected," Ms. Gonzalez said. Yet, the larger economic picture remains bleak, particularly for islanders of working age, thereby hurting real-estate prices for areas beyond the resorts, the beaches and central San Juan.

Economic output in Puerto Rico has been contracting for about a decade. Crucial sectors such as pharmaceuticals have been leaving the island for cheaper labour elsewhere.

Also, there continues to be a continual outflow of workers leaving the island, about 1 per cent of the population a year, while the government's cash-flow position "is fast deteriorating," according to a report co-authored by Anne Krueger, former chief economist for the World Bank.

"The economy is in a vicious circle where unsustainable public finances are feeding into uncertainty and low growth, which in turn is raising the fiscal deficit and the debt ratio," the report warned.

Ms. Gonzalez sees it a little differently: "People say it's obstacles. Some others say it's opportunities. So we have both things." She particularly noted corporate and investment tax incentives on the island aimed at attracting buyers.

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Yet, she knows well what Puerto Rico's real-estate market looks like in a continuing slump. She affiliated her latest company, Trillion Realty Group, with Christie's International Real Estate five years ago as the scenario seemed dire. "When the market was really, really down in Puerto Rico, five years ago, even my daughter who is my [business] partner thought I was crazy," she said. Her company survived.

But many view current conditions as equally dire, despite new developments such as the Ciudadela mixed-used condo community in the gentrified Santurce section of San Juan, a five-minute walk from the beach and catering primarily to relatively wealthy local buyers.

"The island is like a supermarket. You have all kinds of things going on," Ms. Gonzalez said, indicating pockets of new activity such as the Ciudadela development and the perpetual focus on beach properties. "Those are hotcakes, always in demand."

The island doesn't have a tradition of gated communities with the best beaches cordoned off. Instead, public access to the island's beaches is a strong selling point, say realtors.

The point she and other brokers argue is that even in a depressed market, there are still prime properties that should appeal to some buyers, in particular retirees and second-home buyers. A key element in this are Puerto Ricans returning from the mainland United States to retire, therefore maintaining continual demand in that niche, as well as buyers speculating on earning good rental income and betting that some depressed property prices might rise.

"What we are seeing is a lot of people speculating," said Guy Sanchez, operations manager at Coldwell Banker KF Real Estate in San Juan. "We have a lot of people who are interested because, for one thing, our property taxes are very low."

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The bulk of buyers are predictably from mainland United States, although Mr. Sanchez said he has some Canadian clients who tend to be holding back, given the bad economic news. The real-estate market more for locals, especially homes in the centre of the island, is in "crisis" though, Mr. Sanchez said.

"There are a lot of foreclosures, and we are losing a lot of the professionals," he said. "So what we have here are a lot of second-home buyers and a lot of the retirees' buying on the island. That's what we're looking at."

He added that "clients, when they come in to buy, they're looking at the other islands, and they're seeing that our closing costs are less because of the taxes," which are comparatively low. In other words, property tax is less of an issue than it has been in Greece, where tax increases have been wielded as part of the attempt to improve that country's debt burden.

Still, the picture Mr. Sanchez paints of Puerto Rico's residential property market is common among many resort destinations with struggling economic conditions. It requires getting to know the ins and outs beyond the macro-economic level, but down to the local, ground level, he said. For instance, he argues that whereas conditions may be bad for workers and families, they are much better for retirees and the rich.

"It's not for the middle class any more, as it used to be. I don't recommend it," he said. "There is nothing for the young people out here. But anybody coming out here for a second home or retiring, it's excellent, it's great. And because of the economic issues, they find very good deals."

The hope is that those deals will continue to bring funds into the market, to support local businesses and trendier bars and restaurants in Santurce, that is giving Puerto Rico a new urban flavour. Realtors emphasize that the bargain prices are the big draw.

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As Ms. Gonzalez said, "Many people that are hurt with the market, well, they're selling."

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