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ed f

current state of RE market

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I'm curious about the current state of the real estate market in Costa Rica. I am planning on relocating to CR in a couple of years, first for a test year renting a residence, and later possibly building something on a view property in the central valley---maybe close to the new road to the beach from Santa Ana/Ciudad Colon. I have received conflicting reports from friends currently residing in CR as to price trends/availability, any thoughts or observations on the subject will be appreciated.

Thanks in advance,

ed

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It's a great time to be looking. We are about 18 months into a down-turn, that said there are still many homes on the market that were for sale 6 years ago when I started looking. Prices are starting to get a little soft, after a large run up. Take your time and run from anyone that indicates the market is hot [ or will be hot anytime soon ] anywhere in CR. I would rent for at least a year if not more. We are a long way from the bottom.

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if you do a search here on "rent" you will likely find the recent thread on this topic - lots and lots of opinions and experiences!

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I'm with sabo on this one. It is truly amazing how many sellers are still putting up their prices even years later. I had one lady tell me she put her price up because the new MacDonalds just opened. LOL!

 

One good reason to have CR increase the property taxes is to encourage the owners of all of those unused buildings to finally sell them.

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It's a great time to be looking. We are about 18 months into a down-turn, that said there are still many homes on the market that were for sale 6 years ago when I started looking. Prices are starting to get a little soft, after a large run up. Take your time and run from anyone that indicates the market is hot [ or will be hot anytime soon ] anywhere in CR. I would rent for at least a year if not more. We are a long way from the bottom.

 

 

Sabo,

Your comments are reflective of my read on the situation, and most appreciated---funny though---on another forum, the moderator replied to my question commenting about how hot the San Jose-Sabana Park area market is, great investment potential, etc---buy now! We love costa rica, and can't wait to get our business tied up here in US. Plan to move down in early '11. Do you see the US economy having a direct (though delayed) impact on the CR economy, this leading to the cooling off of real estate--land/existing home prices? If so, will a US economic upturn be delayed in its impact in CR?

Thanks,

ed

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I'm with sabo on this one. It is truly amazing how many sellers are still putting up their prices even years later. I had one lady tell me she put her price up because the new MacDonalds just opened. LOL!

 

I think that a lot of sellers are not really serious sellers. They put their properties up for sale on the hope the hope that a sucker gringo will come along and pay a stupid price for their property.

 

TO be honest, I have been surprised with how resilient prices have been in the face of what is happening in the US market. I still think that Jaco is the key. There is a amazing amount of inventory coming online there. So far prices are holding up there. However, I think that if the market crashes there in Jaco, there will be a ripple effect throughout the country.

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I hear things have been very soft up north for the last 6 months also. It could be that it's just off season. There is just so much on the market in the mid to high end IE: $200K-$900K build and priced for Gringos.

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I hear things have been very soft up north for the last 6 months also.

 

I know a couple from Maryland who've been shopping for property in Samara for about 18 months---they've been given cause for concern as nothing seems to be moving, same places listed in '06 remain unsold-----or at least that's what they observed.

 

ed f

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Prices are dropping and will drop even more! Jaco will be flooded with new apartments soon, many are still unfinished.

 

This was on Reuters some days ago:

 

(2008-08-01)

 

By John McPhaul

 

SAN JOSE, Costa Rica (Reuters) - The U.S. mortgage crisis has hit Costa Rica's once booming vacation home market, with sales plummeting as Americans who dream of buying a tropical getaway struggle to find financing.

 

U.S. retirees and vacationers often pay for beach homes along Costa Rica's jungle-fringed beaches by taking out mortgages on their homes in the United States, but trouble in the banking sector has made that more difficult, realtors say.

 

Prices for some vacation houses and condominiums in the Central American country have dropped as much as 40 percent from their peak a few years ago and sales have slumped at least 30 percent over the past six months, they say.

 

"Most of the sales to Americans are in cash after they take out a second mortgage on a property or mortgage a property they have clear title to," said real estate broker Iris Mailloux.

 

"I've only had seven sales that were (locally) financed in the 15 years I've been here."

 

Real estate agent Sabastian Pecher said sales are particularly slow for less expensive condos in the $100,000 to $200,000 range, which typically have two bedrooms and are within strolling distance to a beach.

 

"On the lower end we're down at least 50 percent to 60 percent," said Pecher, who sells second-hand homes as well as new condominiums.

 

Homeowners in the United States are facing foreclosures at a record pace, according to the Mortgage Bankers Association.

 

As a result, U.S. banks, many of which have been burned by lending to clients with poor credit histories, have tightened lending rules to reduce risks.

 

Home sales in Costa Rica are still strong to visitors from Canada and Europe, where banks have been less affected by the U.S. mortgage industry slowdown, said Mailloux.

 

Developers selling new condominiums in Costa Rica, which has a reputation as a peaceful amateurism paradise, are trying not to cut prices, even if that means holding onto empty buildings, said realtor Murray Greer.

 

Realtor Mark Price said realistic sellers are cutting prices 20 to 40 percent compared with three years ago, when the Costa Rican market peaked.

 

He gave an example of a three-bedroom house in the beach town of Tamarindo selling for $490,000, down from an asking price of $650,000.

 

As many as 60,000 Americans live in Costa Rica, according to Linda Solar, executive director at the American Chamber of Commerce.

 

The northern Pacific coast in the province of Guanacaste has become particularly popular since an international airport was built in the city of Liberia five years ago.

 

Last year, foreigners invested $664 million in Costa Rican real estate, according to the country's construction industry association.

www.reuters.com

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We were told that property values in the Ojochal area have been growing by 20% or so a year for the past few years.

 

Could this some how be true?

 

This conversation thread seems to indicate otherwise and if so, how could the developer claim that property values were going up?

 

 

Prices are dropping and will drop even more! Jaco will be flooded with new apartments soon, many are still unfinished.

 

This was on Reuters some days ago:

 

 

www.reuters.com

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While in on the top electrical suppliers in Liberia, the owner told my husband this week, that the banks have stopped giving funds to most of the developers on the Guanacaste coast due to money just not coming in. Most construction has stalled, especially ones that expected to pre-sell.

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We were told that property values in the Ojochal area have been growing by 20% or so a year for the past few years.

 

Could this some how be true?

 

This conversation thread seems to indicate otherwise and if so, how could the developer claim that property values were going up?

 

I am not sure, as I have not researched prices in the Ojochal area. But I would not be surprised if prices have risen that much or close to that much over the past few years.

Especially when you are talking about lots and raw land, there are areas of Costa Rica that the prices have gone up that much and are still going up.

There are some areas that are hotter than others, and especially property with ocean views seems to be going up in general. There are always people who want to move down to Costa Rica, be up high enough to escape the heat and have that ocean view to wake up to in the morning.

Just my 2 cents and based on some prices I have seen in the past few years.

I can tell you for SURE that prices in the area between San Isidro and Dominical (which is not that far from Ojochal) went up like crazy about 3-4 years ago and I'm not sure if they leveled out now or not, but they rose like 300-400% in some areas over there. I know for a fact because I was looking at property there around that time and I saw it go up so high I could no longer afford it there.

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From what I have seen, the trends shift by area. Some of the locations where land sold like hotcakes a couple of years ago, it's now the people with capital to build who own the land and the construction begins, while other areas are still cheap and people now look into those to start buying it up.

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