ROBERT SIEGEL, HOST:
The real estate market in Havana is roaring. Colonial-style mansions and art deco apartments in communist Cuba are taking top-dollar, but as NPR's Carrie Kahn reports, this all-cash market is risky business.
CARRIE KAHN, BYLINE: On Havana's famous Malecon, one 12-story apartment building sits in relative isolation on the crowded seaside strip. Residents call it the Blue Unicorn.
YOANDI RIZO FIALLO: (Speaking Spanish).
KAHN: It's all by itself and painted marine blue, says real estate agent Yoandi Riso Fiallo, and it's highly desirable.
(SOUNDBITE OF DOOR UNLOCKING)
KAHN: Rizo walks through the building's crumbling lobby and up the tiny, creaking elevator to the front door.
FIALLO: Welcome (laughter).
KAHN: We step into the white, open, well-lit modern apartment - a sensory shock from the faded colors of the city's decaying buildings in full view through the panoramic windows. Turn around, and the bright blue Caribbean fills another wall of windows.
FIALLO: Two years or three years ago, this apartment was probably half the price that could cost now.
KAHN: Today's price - more than a quarter of a million dollars, plus another $50,000 for renovations. The new owner plans to rent out the three-bedroom, three-bath flat as a high-end bed and breakfast says Rizo.
FIALLO: Really, it's a wild market.
KAHN: Five years ago, Raul Castro began allowing private property ownership, but it's in the last year and a half since relations warmed to the U.S. that the real estate rush has taken off. Laws in both countries bar foreigners from buying homes here, but that hasn't stopped them from finding loopholes and fueling the frenzy.
UNIDENTIFIED PEOPLE: (Speaking Spanish).
KAHN: At least once a week, a foreigner knocks on his door, says 58-year-old Juan Pablo Mugesia, who's hanging outside with neighbors. He lives with his parents and brother in a three-bedroom flat on the eighth floor.
JUAN PABLO MUGESIA: (Speaking Spanish).
KAHN: For a good price, my dad will go, says Mugesia. If not, we say. Real estate agent Eduardo Perez runs one of several websites advertising Havana real estate. He says when foreigners call, he tells them he can only help if they have a relative here or a Cuban friend.
EDUARDO PEREZ: You have the money. I have then the name - the legal name in Cuba - and we can - to make the business.
KAHN: This day, he's going over the final details on this three-bedroom apartment in the coveted Vedado neighborhood. Anaslay Serrano says the only way she could purchase a 1,000-square-foot apartment was with help from her husband, who lives in Belgium.
ANASLAY SERRANO: My husband is not Cuban and give me the possibility to buy the home.
KAHN: She paid 28,000 for the three-bedroom place. She plans to put another 5,000 in on refurbishing, maybe even sell it after she's done for a nice profit. Real estate agent Perez says everything is moving so fast these days with few rules or regulations.
PEREZ: Business in Cuba is very young, all right? For this reason, we don't know other ways in this business.
KAHN: Perez says he's learned everything he knows about real estate from the reality show "Selling New York." He gets it in the offline bootleg U.S. TV fare sold weekly in Cuba. Real estate agent Yoandi Rizo Fiallo says Cuba's market is risky. Many Cuban-Americans are coming back, reclaiming citizenship and buying up homes in their family's old neighborhoods without regard to value.
FIALLO: It's about the heart.
KAHN: Not the brain?
FIALLO: Not the brain, no.
KAHN: The city is crumbling, Rizo says, with poor infrastructure, unreliable electricity and water and no guarantees the government won't reverse private property laws.
FIALLO: The problem with that is we have - we are selling houses that cost a million in a city that is not ready for millionaires.
KAHN: Carrie Kahn, NPR News, Havana, Cuba.