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joe2k

Escazu in bubble

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All,

 

I visited Escazu this week for only a very short period but I "seemed" to get the impression that the real estate market there is in a bubble.

 

Prices for both rent and sale for "gringo like" properties are way overpriced considering what you get, what surrounding infrastructure looks like, nominal salaries of even high tech tico workers and other factors.

 

The problem with real estate bubbles is that they could continue to grow, stablize to match real conditions or simply burst at any time.

 

Can someone who lives nearby or has intimate replacement construction cost information make some comment about the prices?

 

What struck me as one indicator(among many) was a developer who joked that he was simply going to build out all the houses in his land development rather keep the money in the bank.

 

Please any comments...

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I not live in CR at this point but have spent time in Escazu looking at real estate to buy for 10 years. I agree it is in a bubble now, there is a limited supply of remaining land sites to build upon which sustains the bubble. I do not think its home construction cost that is driving the] bubble at all in Escazu, it is land cost. I believe it may take some time, a year or two or three but in due time the value of land, whether vacant or built upon will drop to a more realistic level for incomes and cash available to buy at the prices offered. I think you are correct about construction cost in a couple of respects... one is that homes in Escazu tend to be larger on average which makes them expensive even at the same cost per sq meter to build, also they tend to have more high end features in homes, that drive up the cost of construction as you well know.

 

But I like the area, climate and views and location relative to things to do and that I need. I think in due time there will be a orrection, especially in land prices, first in available lots as well as existing homes for sale.

Edited by Johnhw2

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All,

 

I visited Escazu this week for only a very short period but I "seemed" to get the impression that the real estate market there is in a bubble.

 

Prices for both rent and sale for "gringo like" properties are way overpriced considering what you get, what surrounding infrastructure looks like, nominal salaries of even high tech tico workers and other factors.

 

The problem with real estate bubbles is that they could continue to grow, stablize to match real conditions or simply burst at any time.

 

Can someone who lives nearby or has intimate replacement construction cost information make some comment about the prices?

 

What struck me as one indicator(among many) was a developer who joked that he was simply going to build out all the houses in his land development rather keep the money in the bank.

 

Please any comments...

 

I thoroughly researched Escazu and came away laughing hilariously every time I would go on a visit. I did find a great Tico place and a great Tico price but there were some niggling details that did not fit my wife. I would have gladly lived there. Everything nearby was outrageous.

 

IMHO the bubble will burst huge in the not too distant future. Especially when they figure out the robberies are being set up by the guards.

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Escazu is only good for one thing in my opinion and that is the Time Out Tavern. Many including Ticos are starting to believe that it is on the right side of the railroad tracks so to speak.... I guess that's why I live in Coronado on the other side of town. Old money always lasts longer in my opinion anyhow.

 

PuraVidas

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Escazu is only good for one thing in my opinion and that is the Time Out Tavern.

 

I think I've been to the Time Out Tavern. If so, it was OK but overpriced.

 

In the spirit of offering real estate advice like the shoeshine boy offering stock tips, my impression is that the Escazu real estate bubble popped long ago. Many may not know this, since they are not trying to sell or rent, but just going by the classifieds Escazu prices strike me as fairly low. Plus, there is always a fair amount of inventory.

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I think I've been to the Time Out Tavern. If so, it was OK but overpriced.

 

In the spirit of offering real estate advice like the shoeshine boy offering stock tips, my impression is that the Escazu real estate bubble popped long ago. Many may not know this, since they are not trying to sell or rent, but just going by the classifieds Escazu prices strike me as fairly low. Plus, there is always a fair amount of inventory.

 

I think the popped bubble is beginning but not fully accepted yet. You are correct there isnt a lot of property for sale there last time I looked. One antidote, I had been looking online at a home with an incredible view in Escazu, it was put under contract at close to the asking price but when it didnt close, the sellers cut the asking price in half to sell in a hurry. It still hasnt sold after 1 plus month at the lower price and they have moved to Sweden. At half the asking original price it was a fair deal and perhaps a bargain in Escazu. One property doesnt a market make but the signs of a cut in pricing are there clearly to me, but will depend on the depth of the sellers pockets to hold on and wait or take it off the market if the seller doesnt really need to sell it. .

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Prices in Escazu are insane. I also had problems with an American woman broker who posts ads for Escazu houses and pulls bait-and-switch tactics on you. It's all a nightmare over there.

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Prices in Escazu are insane. I also had problems with an American woman broker who posts ads for Escazu houses and pulls bait-and-switch tactics on you. It's all a nightmare over there.

I have heard about that lady's shenanigans for several years now. She has been banned from a couple CR discussion groups for those sort of unethical tactics.

 

She gets always with it because she's 'so nice' and also because there are no real real estate regulations to put her out of business.

 

It's actually better to deal directly with the seller of the property than with 'agents' or representatives for a property. Some of those reps can even be representing both the seller and the buyer. Can you say 'conflict of interest'?

 

WATCHWORD: Extra caution is needed when considering buying real estate in CR.

 

Personally, I will likely never buy; I'll continue to rent. It's far safer.

 

Regards,

 

Paul M.

==

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Something to keep in mind: Asking prices do not necessarily reflect selling prices. Asking prices may more often reflect the lag in belief and the lag in adjusting to real world conditions. Lots of properties are waiting and waiting and waiting for prices to rebound. I don't think so, but the owners cannot face that possibility without melting down.

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Something to keep in mind: Asking prices do not necessarily reflect selling prices. Asking prices may more often reflect the lag in belief and the lag in adjusting to real world conditions. Lots of properties are waiting and waiting and waiting for prices to rebound. I don't think so, but the owners cannot face that possibility without melting down.

 

If you believe that the recession is over, that its all under control......then in the 60's you also believed that with the advent

of the computer we would all be going to 4 day work weeks and the little woman could come back home and take care of the

kids. If you will go back and look at history, look at the last few recessions you will see that the confidence necessary to bring things back to normal, much less to have them get above the current inflationary spiral is many more years than have

passed since this fiasco started. Suggestion.........again......!!!!.....Wait.......all the houses in C/R will not be sold and nothing left to buy by the end of the year.....RENT!!!!.....LOOK AROUND FOR THE RIGHT NEIGHBORHOOD.......Make a few offers. C/R as Paul suggests has not come into the real world conditions......The sellers and their agents are still hopers..........3 land sales in my area, the last 3 years.......Fortunately we do not have any high rise buildings here so the fatalities among real estate people and developers have been few......thanks paul..........john

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.Wait.......all the houses in C/R will not be sold and nothing left to buy by the end of the year.....RENT!!!!.....LOOK AROUND FOR THE RIGHT NEIGHBORHOOD.......Make a few offers. C/R as Paul suggests has not come into the real world conditions......The sellers and their agents are still hopers..

 

I agree John. Much better to rent, take your time, and get your ear to the ground to find the real bargains in a place you'd really like to settle.

 

Besides, the RE market has a long way to go to unwind from the Bubba Bubble Debacle. If there is a bottom to this we won't find it in measurements of time. I think it will be in measurements of dollars. We need to unwind back to the prices before any of the cheap credit ramped this thing up into Sport Real Estate.

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I agree John. Much better to rent, take your time, and get your ear to the ground to find the real bargains in a place you'd really like to settle.

 

Besides, the RE market has a long way to go to unwind from the Bubba Bubble Debacle. If there is a bottom to this we won't find it in measurements of time. I think it will be in measurements of dollars. We need to unwind back to the prices before any of the cheap credit ramped this thing up into Sport Real Estate.

 

Sadly it will not be over tomorrow.....Based on my take on the history of the debacles of our system over the past few

decades I will be too old to do what I wanted to go to C/r to do in the first place and now I am having a hard time recollecting

what that is until I read the forum for a few days. I think we should all go and find an old B and B or motel needing refurbing, not doing much business and lease it for a year. We can all get together there, fix it up a bit, clean out the pool and wait for our dream property to come on the market, meanwhile having the pleasure of each others company and being able to leave when its time with a lot of new insight. The forum is great but a little more social activity would be better....just my thoughts...

john

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Well to give another perspective, I do not think the bubble will ever break.

 

Why?

 

There seems to be a never ending stream of Gringos (now more than ever because of the current administration in the USA) that want to live near other Gringos (why???).

 

They think Gringo Gulch (Escazu/Santa Ana) is safe when actually it has a huge bulls eye painted on it as the bad guys do not have to guess where is the $$. Not sure about the guards remark, but security is not good.

 

As David said EVERYTHING is overpriced there. You even have to overpay on the toll road to get anywhere else :)

 

Yet, they come... like locusts....

 

Naw... The bubble is safe :)

 

TG

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Yet, they come... like locusts....

This is an interesting trade off: Gringos fleeing CR and gringos fleeing the US, passing in the night like two freight trains headed for stations on opposite sides of the world.

 

The net difference should tell whether the CR bubble maintains for the short term or not.

 

In my opinion, all bubbles are going to end sooner or later though, and it has nothing to do with normal supply and demand, and everything to do with planned obsolescence. Bubbles by nature are artificial and contrived, and they are not meant to maintain indefinitely. They are designed to cause a window to open where knowledgeable speculators can get in, make money, and get out before the amateurs get in at the end.

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Jungle Paul.. Great points - and I agree completely. Although I do not live in Costa Rica - we are looking seriously and keeping our eyes wide open - but we will wait it out a bit anyways.

 

We never imagined that the bubble would burst where I live either - prices have been escalating rapidly for over 5 years - supply/demand, apparent lifestyle and of course the ability of work... The houses got more and more expensive and out of reach for a great number of people - the asset to liability ratio grew even more quickly than the housing prices - a full recipe for a real estate slide which is what happened. Our economy is still strong and growing, we are not in a recession here yet - people are still moving here but houses are not selling...hmmm maybe a paradigm shift... :) I can't say Gringos moving in and Gringos moving out... but I can say Easterners moving in and Westerners moving out...

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