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Is the Real Estate market cooling revisited

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TG,

 

You yourself have made the point many times; you need to separate what is happening in the resort areas from everything else.

 

For the Guanacastle coast, I believe that the die is cast and there is no turning back. With the ongoing intensive development, that area will attract a growing number of people that aren’t going to be as price sensitive as the group of value oriented retirees that you describe.

 

The same is probably true Jaco/Quepos/Manuel Antonio.

 

As long as the road south from MA remains unpaved, Dominical and destinations south are probably insulated for the time being. That said, there is a lot of development in those areas too.

 

This is not that unusual, very few retirees can afford to retire in the coastal areas in the states either.

 

It seems to me that the economy of the Central Valley is pretty well insulated from the hyper development that is going on in the Resort Developments. Yes there is some inflation here in the CV, but there is inflation in the States as well.

 

In the end if things get so expensive here that the Value Oriented Retirees are scared away, it only means that there are other individuals that have come here that are less value oriented and are willing to pay more for the same service/real estate/commodity. There was a time when people would move to Hawaii to retire. No longer, retirees have been priced out of the market and the more affluent have taken their place.

 

Hawaii struggles with all of these same issues, only they are about 40 years further along in the process.. The Locals in Hawaii maintain a standard of living that is roughly on par with the Ticos here in Costa Rica, in spite of insanely higher prices for everything. The big advantage here in Costa Rica is that the CV is relatively isolated from all the resort development on the coast. In the long run, I think there is a good chance that the language barrier and physical separation from the resort areas, will keep the CV economy from heating up the way it has in Hawaii. But who knows? It is pretty nice here in the CV too. Enjoy it now.

 

NOTE: 2 reasons why thing will never be a crazy here as Hawaii

 

1) Climate. Because of prevailing trade winds, each island has a wet side and a dry side. It is no fluke that the resorts are all on the dry side where inhabitants enjoy 350 days a year of near perfect weather. The trade winds also serve to keep both tempratures and humidity at moderate levels. The climate in Hawaii is just about perfect all year round. Slow season in Hawaii is Nov 27 to Dec 15.

 

2) Proximity to Japan. Japan visitors spend on average double what American visitors spend on vacation. It was also the Japanese investors that ran up the real estate prices in Hawaii during the mid and late 80s.

Edited by Kahuna

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Hi you all,

 

I'm a newbe here and just read most of the comments and what I wanted to share with you all is this; You are forgetting that Costa Rica is not only the Pacific, which yes is not so inexpensive anymore. I myself have chosen the Caribbean side. I must tell you, there is a huge prejudise in this country towards the black community and therefore the Caribbean. When I arrived to Costa Rica everyone was telling me don't go to the Caribbean, that it is dangerous! Buuuu! So I went to the Caribbean side and let me tell you all, it is a little paradise. People are wonderful. There is a very strong sense of community and I still can't understand how it hasn't yet been invaded and so virgin. Some of the most beautiful beaches I have seen are here in the Caribbean. To comment on the level of security, in my house I don't have glass in the windows only mosquito screens, which means that it would be very easy to brake in. Well I have been here for quite some time and still haven't had a brake in. My property doesn't even have a gate.

All this to say that there is also the Caribbean and living costs here are much lower. If you have your house and don't pay rent you can live on $600 /month easily. My electric bill (with washer, dryer, hot water in three sinks and two showers + garden lights) - $50/ month. Without the dryer it would be around $20/month. We have been experiencing an upsurge in single family homes purchasing and the real estate market has been going up steadily since several years

. On average 25-30% up every year, which is a much healthier growth than what you see on the Pacific. And the construction prices are lower! If anyone is interrested in the Caribbean, I purchased my property with a local agency in Cocles; Sunrise Coast Realty Very competent people. You can also check out prices on their web site; www.sunrisecoastrealty.com

 

Have a nice day you all!

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It does appear that the central Pacific region is cooling but at the same time, the southern region is heating up. We have had record sales in the past year and business continues to sizzle. A major difference is what we sell, homesites and custom homes, not condos and high rise apartments. We aren't building spec condos or high rises and many people have now realized that the southern region (south of dominical) has a three story height restriction throughout the province.

 

I think the folks who are disturbed with the amount of "high rise" construction going into the central region and now even into the middle of Manuel Antonio (Los Altos) are looking for a more environmentally appealing type of development (that's why we come to Costa Rica in the first place). Once one has visited to the southern region and headed down the Costernera from say Dominical to Palmar and seen the type of development going on in places like Uvita and Ojochal, they no longer want to be in areas dotted with high rises and the crime and bad smells that this type of density brings along with it. Gringos are opting for the south because it offers a chance to live amoung higher end single family neighborhoods and international communities. Now with the recent ribbon cutting by Oscar Arias on the site of the new southern zone International Airport, all those who said the airport would never get built are now scrambling to buy some property in the south, knowing that the airport will continue to make this the hottest market in Costa Rica. The lower cost of land in the southern region will soon be a thing of the past. We expect that land in the south will eventually be the most expensive since the local government here was smart enough to set good zoning practices before the onslaught of developers overran the area with high rises.

 

Steve Linder

Steve@PacificLots.com

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It does appear that the central Pacific region is cooling but at the same time, the southern region is heating up. We have had record sales in the past year and business continues to sizzle. A major difference is what we sell, homesites and custom homes, not condos and high rise apartments. We aren't building spec condos or high rises and many people have now realized that the southern region (south of dominical) has a three story height restriction throughout the province.

 

I think the folks who are disturbed with the amount of "high rise" construction going into the central region and now even into the middle of Manuel Antonio (Los Altos) are looking for a more environmentally appealing type of development (that's why we come to Costa Rica in the first place). Once one has visited to the southern region and headed down the Costernera from say Dominical to Palmar and seen the type of development going on in places like Uvita and Ojochal, they no longer want to be in areas dotted with high rises and the crime and bad smells that this type of density brings along with it. Gringos are opting for the south because it offers a chance to live amoung higher end single family neighborhoods and international communities. Now with the recent ribbon cutting by Oscar Arias on the site of the new southern zone International Airport, all those who said the airport would never get built are now scrambling to buy some property in the south, knowing that the airport will continue to make this the hottest market in Costa Rica. The lower cost of land in the southern region will soon be a thing of the past. We expect that land in the south will eventually be the most expensive since the local government here was smart enough to set good zoning practices before the onslaught of developers overran the area with high rises.

 

Steve Linder

Steve@PacificLots.com

 

Nice pitch (no offence), but who are you kidding? :)

 

Los Altos II is coming your way soon. Exactly what is stopping it? Manuel Antonio has zoning too. So what? The Manuel Antonio Road is protected by the exact same environmental laws. So what? Don't kid yourself. Economic forces rule in CR, period. It is very difficult to stop local officials out in those areas away from San Jose from lining their pockets. Trees get cut down in the middle of the night. It happens all the time. Environmental laws are only loosely followed in Costa Rica.

 

You really don't think that the Costa Rican government is putting in a new airport so that gringos can move down there and live in single-family dwellings? Not on your life!!!

 

Get ready. Oso peninsula is open for business. The "hottest market" indeed. Sorry to say, but it is Gringo Real Estate people that are screwing up this country.

Edited by Kahuna

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Give it 18mo. and we will be able to by a nice $500k condo for $175k. But who would want to live there?

 

Maybe! Lets see how many of these projects get started, much less completed.

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Kahuna,

What do you feel drives the government to build the new airport?

Avery

 

Costa Rica has only one legitimate growth engine for its economy, that is tourism. Like it or not. Increased tourism in an area leads to more real estate development. That is the way it works everywhere. As soon as new tourism infrustructure comes into an area, the real estate guys come in with them. It is a natural cycle, just like the tide.

 

This is the first that I have heard that the southern airport is committed to. There is also talk of a new road from San Jose to Jaco. Talk, Talk. There is a new marina going into to Quepos. That is the only one of these projects that actually been started as far as I know.

 

The road to Domenical from Quepos was paid for 4 times over the years from what I have been told. I have herd that they have finally started that. :) But that may be a rumor too.

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The advent of affordable financing in CR has opened up the speculative housing market for the last several years. With ScotiaBank, HSBC and now CitiBank purchasing Costa Rican financial institutions the competition will drive the market to its limit. The limit is difficult to envision however for many years the Costa Rican market did not offer mortgage financing and now it's booming. A downturn or correction as it's referred to in the USA is an inevitable part of life. I have been inspecting land development projects in Guanacaste this week from Samara all the way north to Papagayo and in every community that I have been in the major hotels are FULL. This surprises me as we are now in the low season and before you had your pick of where you wanted to stay and at very low rates. As long as the banks stay healthy this market will continue to grow and these large financial institutions are just beginning to compete and offer their money for housing purchases.

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I was in Tamarindo a month or so ago and it was like a ghost town. Not much going on at all for a so called party town.

 

Four Seasons in Papagayo is doing well, but you can not compare it to anything else in Costa Rica. Four Seasons appeals to a completely different kind of market than virtually any other hotel in Costa Rica, namely well healed international set.

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Just came back from Manuel Antonio and the same hotel we always stay in was booked full... of course they only have 30 rooms..

I laughed out loud when they said they were building another airport... they have been building a highway to the beach for 30+ years and the Juan Santa Maria airport here in San Jose how long has the expansion sat doing nothing...

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The advent of affordable financing in CR has opened up the housing market for the last several years. With ScotiaBank, HSBC and now CitiBank purchasing Costa Rican financial institutions the competition will drive the market to its limit. The limit is difficult to envision however for many years the Costa Rican market did not offer mortgage financing and now it's booming. A downturn or correction as it's referred to in the USA is an inevitable part of life. As long as the banks stay healthy this market will continue to grow and these large financial institutions are just beginning to compete and offer their loans at lower rates. Remember what it was like to get your first new car and borrow the money from the bank. I for one was very honored to be accepted into the adult financial world. Over the last few years the Tico's have been offered financing for cars, homes, etc at affordable rates. This economy is like any other and is driven by financial investment and borrowing power. With these new banks just now beginning to do business here the local economy is just getting started.

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I just got back from Santa Teresa and even there things slowed down a little bit. Still pretty active though. But nothing like 2 months ago.

 

Here is a video from CNBC

 

http://506properties.com/?p=36

 

They call Costa Rica the hottest real estate market on planet earth.

 

Mike

Edited by TicoVille

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Hello, just wondering...........as the sub-prime and credit crisis continues to unravel in the the US, has there been any change in the CR real estate market recently? Change as in prices going down, leveling off, or still rising? We are looking at investing in retirement land in the CV. Thanks for any insight. xpat

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