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Did anyone happen to notice the front page article in this morning’s A.M. Costa Rica about the collapsing Real Estate market in Costa Rica. Any thoughts or comments? Thx.
It is true for most of the country, however, the Central Valley has seen much less of an impact than coastal communities. We ave been travelling to CR since 2003 and now return every 6-8 months. We have been actively looking for property for two years and are in a position to make a cash purchase. Our CR attorney has advised us to wait out another high tourist season for there will be significant bargains if there are two declining high seasons in a row. We tend to always heed the advise of legal counsel, however, the wild card for US buyers looking to leave will be the upcoming election. Historically, the financial markets tend to favor a republican in office and the impact of the democratic ticket is a big unknown, which makes the investment community quite nervous.
I know this is some what un-related to this thread…but there was an interesting article in the NY times with statistics that show better growth under Democratic administrations.
http://www.nytimes.com/2008/08/31/business/31view.html?_r=1&em&oref=sloginI am neither just for the record.
Nothing new, I told that in my message posted March 10,2008 4:05 PM:
https://www.welovecostarica.com/members/forum/openthread.cfm?forum=1&ThreadID=2060#16674Yes I have a comment. People don’t move to Costa Rica for the property values. They move because it is safe and inexpensive. If only 1 % of the baby boomers retireing within the next ten years move here, that would still be 800,000 people. If my math is correct. It is too expensive in the USA. If land drops in CR that is icing on the cake.
Stan Putra
President
BBEThe Orosi Valley is booming. Our real estate market is not in decline, but very hot. We have people in looking for farms daily and selling a farm or property per week.
Regards,
Steve RileyWhere are soom good sites to look further into homes in the Orosi Valley? I’ve gone onto Intertica.com and saw one that’s been up there for ages but other than that I don’t see much else in that area/
Regarding the baby boomers move to CR- The generation breakdown is below:
• 33 million Boomers 1 – Ages 54-63
• 49 million Boomers 2 – Ages 44-54– Less than 10% of US Citizens have a passport. I have not seen research on what percentage of boomers have a passport. That would leave us with a field of 8.2 million.
– Mexico, Panama, Nicaragua, Dominican Republic, etc – Also there are US Cities that are fighting for the same audience – Florida, the Coast of SC, The mountains of NC, Western states such as Arizona, have all been saying the same thing. I have been to these places and seen the development. I am not saying that these places overbuilt and I have not mathematically figured this last part out but I think there will be 10 people left in NY, NJ, PA and CA when this great exodus occurs.Steve, are we suppose to take your word for it or do you have any rock solid, concrete, proof?
By the way Steve, selling is easy if the price is right. I have a house here in San Francisco, California that I’ll sell to you for just 100,000 dollars, okay? It is worth 1.6 million, but you can have it for 100,000.
Point is that “selling” means nothing. If owners are willing to reduce the price, properties will sell even in a downturn. Downturn is a 2 part event, the first thing that happens is that buyers disappear so few sales, next prices fall to meet what buyers are willing to pay. Between the 2 events, there absolutely has to be a period of far fewer sales…. market stagnation.
There are no data in CR to support what anyone says in CR. Perhaps Orosi Valley is “selling a farm or property per week” now, because prices have fallen to what buyers are willing to pay? Please don’t suggest that Orosi Valley didn’t go through a period of stagnation or you’ll lose credibility.
I’m in the Jaco market and Titled Beachfront property has not dropped in price. People are dropping prices of product that is over priced and not on the beach or non ocean view. So when I see these articles they just drive me crazy. Guancaste got out of control with there prices and now they are seeing the side effects. This doesn’t mean the whole country real estate prices are dropping. These types of articles with no real data don’t help anyone and I really don’t understand why AM Costa Rica let this stuff out.
Costa Rica real estate prices are NOT collapsing – that’s pure unadulterated rubbish! Please folks, use your heads.
I normally enjoy Garland Baker’s well researched articles but today’s article was without any real facts or data, just a “personal trip” to one area, he states that “Property prices have dropped on some real estate 50 percent or more” and says that “Costa Rica is at war. It is at war with crime. ”
Sensational scaremongering at it’s finest which must really please all their advertisers! After he scares the crap out of you – poor reader he adds that he is “… bullish on Costa Rica.” Right!
If prices are truly down by 50% please show us some facts to back that up and I will also publish them, but there are no facts to back up that statement!
1. Just because Mr. Baker found some properties that were being offered at a discount in the Parrita-Quepos area, that doesn’t mean that reflects the entire Costa Rica real estate market. We should also note that the Parrita-Quepos is an area that has tens of thousands of plots of land that have been sold – sight unseen – to thousands of unsuspecting buyers by the various boiler room sales scumbags. Many of whom have since discovered that the ‘ocean view’ land they thought they bought, doesn’t have an ocean view.
I don’t want to understate this point because I receive emails from desperate people every single week begging me to help them sell their land in Parrita or recommend a Realtor who could help them sell their plot of land in ‘one-of-a-dozen-or-more’ projects and Realtors are NOT interested, neither am I.
2. There are very, very, very few legitimate developments in the Parrita-Quepos area so it’s difficult to measure any change in prices.
Over the last two weeks (August 2008), we have done dozens of video interviews for a new project with Realtors and attorneys from all over Costa Rica and this is what we all agree on:
3. There will always be the occasional homeowner desperate to sell because of personal circumstances, divorces or whatever but none of the Realtors I interviewed are seeing developers lowering their prices – I repeat none of them are seeing developers with a proven track record of building quality real estate lowering their prices.
They are seeing underfunded ‘fly-by-night’ cowboy operators who are selling at discounts but to be blunt – Good riddance!
4. Not a single one of the experienced developers with a proven track record of building quality real estate that we recommend on WeLoveCostaRica.com are lowering their prices. Zero!
5. There are indeed fewer real estate buyers out there in some area and yes! Some sellers are willing to accept more aggressive offers but then again, we all know quality developers who have growing waiting lists for buyers for their new project.
But Costa Rica real estate prices have not dropped by “50 percent or more” in any geographical area that we recommend! In fact, real estate prices have not dropped by 10% in any geographical area that we recommend.
6. And yes we have crime here but saying that: “Costa Rica is at war. It is at war with crime. ” That’s just irresponsible! Would we all be loving living here if that truly was the case? If they think crime is that bad, why are they living here?
Are we that mercenary that we’re saying how wonderful it is to live here while barricading ourselves in at night? Are they going to publish yellow, orange and red ‘crime alerts’ next?
Are you “at war with crime” in Jaco Lisle?
Are you “at war with crime” in Esterillos David?
Are you “at war with crime” in Turrialba David?
Are you “at war with crime” in Orosi Steve?
Are you “at war with crime” in Puriscal George?
Are you “at war with crime” in Conchal Becky?
Are you “at war with crime” in Manuel Antonio Martin?
Are you “at war with crime” in Dominical Daveed?
Are you “at war with crime” in Escazu Sean?
Are you “at war with crime” in Playa Hermosa Scott?
Because I know we’re not “at war” with anything in Santa Ana.
Finally, like most countries, the worst crime is in the capital city San Jose however I’m in and out of San Jose 3-4 days a week and apart from having my car radio stolen about five years ago, I have never had a problem with crime even in San Jose but maybe I’m just dumb and lucky.
And as you know, I have personally made a significant six figure investment in San Jose real estate and I certainly would not have done that if I felt that we’re “at war with crime.” I bought a $2,100M2 luxury penthouse apartment in pre-construction.
Less than 250 meters away there are two new projects being sold for $3,000M2 in obra gris folks – that means you take delivery in concrete and finish the thing yourself which would add – at the very least – another US$1,000M2 to the price giving you US$4,000M2 apartment.
Prices ain’t going lower in the Costa Rica real estate that I’m investing in so maybe you should be spending more time on WeLoveCostaRica.com
Scott Oliver – Founder
WeLoveCostaRica.comHere is the article:
“Faltering real estate market presents opportunities
By Garland M. Baker
Special to A.M. Costa RicaA personal trip to the Parrita-Quepos area to look at property and meet with real estate agents turned out to be an invaluable experience. The real estate slowdown is quite evident, but there is good news for well-informed investors. Today’s deep discounts are tomorrow’s profits.
For sale signs are everywhere. Property prices have dropped on some real estate 50 percent or more. Some people have walked away from the houses they were building before completion and assigned them to real estate agents with instructions to sell them for whatever they can get. Some condominium developers are selling their projects out using factional ownership so they can make some sales and bring in badly needed cash flow.
A.M. Costa Rica published articles cautioning about the coming weaknesses in the real estate market starting in January 2005 when property values were spiraling out-of-control. Later articles predicted that too many condominiums were under construction and this would cause an over supply.
In retrospect, 2005 surely was the topping out of the real estate market in Costa Rica and the beginning of the slowdown of real estate sales. This is true in most market situations. When prices are crazy and people are willing to spend almost anything on the upswing, the market is ready to burst and turn around.
The slowdown started to show its nasty head in 2006 when real estate agents complained of fewer sales and prices leveling off or declining. The events in the United States surrounding the subprime mess where consumers over borrowed on the equity in their home, perhaps to buy a vacation or retirement property in Costa Rica set the foundation for a turn around in real estate here.
This is not the first time this has happened in Costa Rica. Old timers remember Costa Rica went though a similar time in the 1970s. Property values were on the upswing and relative to those times, real estate was expensive and increasing in value rapidly. However, with the onset of the Nicaraguan conflict and the United States embargo against the country, real estate sales abruptly entered stagnation.
Values did not start to rise again until after the end of the United States embargo against Nicaragua in 1990. Costa Rica’s real estate values started to increase slowly at first but gained momentum rapidly in the late 1990s. This culminated into explosive growth and skyrocketing prices from 2000 to 2005.
Today, Costa Rica real estate prices are on the fast decline for several reasons. Here are a few:
North America is in serious financial distress. In the past, when the United States caught a cold, Costa Rica suffered financial pneumonia. This is not as true as it was in the past because Costa Rica is a destination and retirement option for many other types of foreigners not just North Americans. However, even today, when the United States is having troubles so does Costa Rica. Usually, there is a lag time of around a year before Costa Rica suffers from the happenings in the United States. This is also true during the recovery process. Costa Rica needs the same amount of time to begin recovery after the United States markets improve. This means the bottom of this slowdown is just beginning not ending.
As stated in the article “How high can skyrocketing land values go?” New found paradises go through a defined cycle: The phases to the cycle are exploration, involvement, development, consolidation, stagnation and, decline and/or rejuvenation. Given all the development over the past several years, Costa Rica is now ready for its consolidation and stagnation phase. The slow down in the United States has not helped and is probably nudging the country into these phases prematurely.
Today, Costa Rica is at war. It is at war with crime. Crime is everywhere. It runs the gambit from the highest echelons of government down to petty street crime. The problem is the street crime is not so petty any more. Many robberies are at gunpoint or worse, someone is killed. The Costa Rican press is full of stories of students being murdered over a cell phone while waiting for the bus. The problem is Costa Rica has not declared war on crime. The country is just too complacent letting the criminals run the show.
The country had better wake up sooner rather than later. In the past, Costa Rica’s proximity to Nicaragua made North Americans uneasy about traveling here during the Nicaraguan war. The United States’ embargo put the nail in the proverbial coffin. Most foreigners like to feel safe when they travel — especially North Americans — and when they do not feel safe they tend to avoid a destination in conflict. The increase in crime in Costa Rica and the increasing world’s perception that Costa Rica is not a safe place to visit will stagnate Costa Rica’s growth even if the United States recovers from its financial problems.
For these and other reasons, the bottom of this slowdown is in its beginning stages not at the bottom, as some real estate agents believe.
Now for the good news for savvy investors. Baron Rothschild, an 18th century British financier, is attributed with saying “The time to buy is when there’s blood in the streets — even if the blood is your own.”
This author is bullish on Costa Rica and feels the country will eventually get its act together — of course — in its own Tico time, but it will happen eventually.
There are some great real estate deals these days for investors and for those people looking to retire here in the future. There are even better deals for those with cash. Knowledgeable investors recognize bad times make for good buys. Even though Costa Rica has probably not hit bottom, it is the time to start looking for property. Real estate values have a positive trend over time and real estate values will sky-rocket again sometime in the future as it has done in the past. Markets always do.
Where do we get unbiased FACTS and DATA in Costa Rica, Scott?
From what I’ve read, much of the data isn’t collected and what is collected can’t be trusted.
Sccot said: “Prices ain’t going lower in the Costa Rica real estate that I’m investing in so maybe you should be spending more time on WeLoveCostaRica.com”
I’m not sure a site which promotes buying real estate in Costa Rica is where people should go for trusted information. Maybe you did invest, maybe you didn’t, instead of telling us to go research, maybe it would be wise to put forth some rock solid proof. If you did buy then you have a reason to say whatever is required to keep the prices high. You come across as a no nonsense, honest, trustworthy character, but few if any really know who you really are so why should anyone trust their life’s savings to what you claim? Just wondering.
I know this puts you on the defense, but think about it a little from a site visitor’s perspective. Bottom line is that we should take what everyone in cyberspace says as pure babble until proof is on the table in front of us.
Beware folks!
Well ‘Dockers’ if you are not going to believe what I say about what I am investing in then there’s not much point in you visiting my site or reading my book because I am not about to openly publish my private financial information for someone called ‘Dockers’ or anyone else for that matter.
By all means wait for a couple of months until the apartment is finished and you’ll be able to see the video interviews that we do from my new penthouse.
Finding hard data on sales and purchases is indeed very difficult in this country, we all know that but I do speak with dozens of Realtors on a weekly basis and have been a part of about 100 real estate transactions over the last 12-18 months so I have pretty good idea what’s going on …
As an example, our VIP Members have purchased about 60 apartments in one project alone in Santa Ana through our Recommended Realtor and the buyers that got in during pre-construction are owners of apartments worth 25% – 50% more than what they paid… I know that as a fact and any cynic can visit the project and ask what the prices are today and what they were at the beginning of last year.
Lastly, I do NOT personally sell real estate but certainly recommend people that do so nobody is giving me their life savings and as I have stated repeatedly, buyers need to do their own homework!
Costa Rica is NOT for everyone so people need to take a good look around, they need to hire experienced and trustworthy professionals, Realtors, attorneys to help them make the best decision for them.
We have plenty of clients that do make real estate investments (multiple investments) based on my recommendation but I know a lot more about them than just their Username so unless we already have an established, profitable relationship then you should do your own homework.
Scott Oliver – Founder
WeLoveCostaRica.comSome thoughts from a CR traveler:
Since this conversation is getting interesting. From my perspective and other sources (news media inside and outside CR) there appears to be a difference between the Pacific coast beach markets and the central valley markets. I have not looked at houses in the central valley in person yet.
I visited Jaco and Quepos last October. Some of the Jaco beach front prices were 700k plus for a condo. When you look around at the town it still has infrastructure issues that will take a couple of years to create. A lot has changed from the prior 3 years and it is obviously in a state of change. In my opinion it did not make sense to buy the property – if I were to compare prices in other places with better infrastructure it did not make economic sense. I think someone is going to be left holding the bag in Jaco and if it wasn’t going to be the developers I did not want it to be me.
Per the real estate agent most of the properties were being bought by foreigners and over 80% of the properties were being bought by US citizens. I have to believe that many of these US investors are not buying the properties because they love going to Costa Rica. With the economic downturn in the US – that one could argue is still working itself out and could spill over into Europe later this year and into early 09. I have to believe that this area will not go unaffected in the next few years. I could be wrong but I would rather be wrong on this one with my money in my pocket. I have not seen the prices come down in Jaco but I have seen better deals in Quepos.
Not that Scott needs defending – I bought his book at the airport and have been a member of this site for about 2 years. I don’t always agree with his comments and have e mailed him personally when I have had a different thought. I have never met him but he has been polite with any difference he has been consistent with his advice: he has always said do your own research and come down before you buy, I felt like he has acknowledged the price difference between the pacific coast and central valley as well.
As far as bias’ go everyone has a bias that what makes life interesting – some people call them beliefs and much of them area attached to our well being (sometimes financial well being).
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