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Lotus, we bought in Nativa close to Tarcoles. Wanted nature, a view and security. It is somewhat closer to San Jose as well. Anybody have any input about this project?
Scott who needs a kitchen? Just buy one of those two burner jobs you hook up to a propane container…I have cooked some very tasty Gallo Pinto on them.
I have driven past Nativa a hundred times, but never inside. It seems like it was always a “pricey” project? I have looked over there various projects on the web though.
El Hombre, my thoughts are this; you already own the dirt, your price is fixed. Given the slowing constrution industry, you may be able to capitalize on some lower construction prices…and I say MIGHT.
Nobody in CR thinks that construction prices will go down…however, there are very few who actually think that real estate prices could actually go down. We met with a project manager while we were in San Jose, his thoughts were simply, “Never in the history of Costa Rica have real estate prices decreased, therefore, real estate prices will always increase.” I ensure you it was a short meeting. Its this flawed logic that we see running through the community.
Guanacaste coastal sales have all but ceased…trust me when I say, there will be a material negative impact on the price of certain asset classes of real estate in this area. We are are uncovering all of the economic problems as we speak, it will take 12 months to even begin to understand the ramifications of those issues.
Back to your question though, it doesn’t sound like this is as much an investment for you as it is an alternative residence. If that’s the case, I would wait a 6 months and then start looking for build quotes. Just my $0.02. Hope it helps.
Thanks,
Jarrett
Scott, if the CR banks are not affected can you explain why they are not lending in the short term? There is capital out there but its much more difficult to secure than it was as little as 6 months ago.
Scott if you find this inappropriate I appologize in advance and understand if you wish to remove it but…I have also heard that Rosewood has put their project on pause for the time being as well.
Jarrett, many thanks for the constructive input. Your suggestion for a plan is exactly what we are doing. Last week, we firmed up plans to rent for six months a seemingly very nice unit at the same development we own our half acre. To hear, totally unbidden, the same plan from someone else helps to lessen our unease. And yes, it is to be our residence first, investment second.
Your comment on the flawed logic running rampant through CR seems sensible to me. I would like to have my suspicions proved wrong, but we have some time to go before the whole picture comes into focus.
Sounds like you are going through the sort of process that we will be starting in the New Year. It would be interesting to compare notes. Is there any way we could compare notes by trading email addresses through Scott?
“…flawed logic.”
We live in a foreign country and we have to live with this “flawed logic” and depending on who the sellers/buyers you MUST take this into consideration or you will not be able to do the deals that you want.
Your way of thinking and probably your negotiation strategy with a Gringo mindset may work great if you’re dealing with a Gringo seller but since there a few Ticos left that still own real estate here and a far smaller percentage of them are in a highly leveraged/mortgaged situation as they clearly are ‘back home’ – you will have to accept and live with this “flawed logic.”
I have tried to negotiate with sellers of land who told me that yes! They would be willing to negotiate and be a little flexible on price, that they would have to talk to their partners and get back to me… Admittedly these were not huge tracts of land but 5,000 – 10,000M2 lots.
They did talk to their partners, they did get back to me after RAISING the price by 25%. This has happened to me on at least a dozen occasions and it’s NOT that I’m British because with some sellers, I had them deal with my girlfriend who speaks fluent Spanish.
Ticos do not always think the way you and I do, and on many occasions, if their property is not selling for the price they want (and they don’t care if it’s genuinely worth the price they are asking or not, or whether a comparable property just sold nearby for 50% less than what they are asking) – it’s been my experience that they will not sell. And, if it still doesn’t sell, they are MORE likely to increase the price than lower it.
Call it “flawed logic” if you wish – that’s just the way it is. It is extremely rare that I have seen Ticos lower the asking price for the real estate they wish to sell.
Scott Oliver – Founder
WeLoveCostaRica.comScott, your comments regarding the Tico way of “negotiating” is relevant and doubtless true. It reminds me very much of when I used to live in Asia and how the locals would rather see their property rot away rather than lower the price as, I can only surmise, they would have lost “face”. Saying that, I have to say that in Hong Kong at least, after enjoying huge runups in prices and rents, owners and landlords were forced to make huge price adjustments, even if this may have been most difficult emotionally. Are there similar motivations for the Ticos?
I have noticed that individuals in developing nations tend to indulge more in “flawed logic” when selling real estate. Perhaps they have closer ties to the land rather than our commoditization of it. But in the end, without making any judgements about it, the land gets sold. And then market comparables and other market hocus pocus become relevant rather than the supposed connection to the land. Perhaps, any usage of the word “logic” in the same sentence as negotiation for a developing nation is not a helpful concept.
Anyway, right now, my interest lies more in the land and residences that have already been built and serviced to a developed nation standard and I suspect that means North Americans/Europeans as the owners. That is a different segment of the market than what prompted your last response. Or is it?
Scott, I can agree with you…however, my reference to “flawed logic” was merely to point out that the assumption of history as the ONLY indicator of the future is tremendously short sighted (i.e. the price of real estate has never decreased in CR, therefore it never will). Yes that was a Tico, and yes he was completely over his head in his presentation to us.
We met with Minister Jorge Woodbridge and he was very insightful and honest in his thoughts on the future of real estate prices in the near and mid term. Scott you are correct in dealing with Tico land owners, their method of business may be very different than ours, it doesn’t mean its wrong…its just their norms…don’t fight it or you won’t get any business done. At the end of the day…the numbers have to work…they either do or they don’t.
What I can tell you is this; there have been many real estate transactions over the last 3 to 6 years (in Guanacaste) into highly levered American hands. Some of those owners need a way out and quickly. In fact, as an example, one of the pieces I am offering on right now, the current owner stands to take a material loss net of closing/selling costs, having only owned the property for less than 12 months.
My $0.02 is that this is just the beginning of this type of action (in that specific area). My advice would be to get out and buy during this time as if you sit around waiting for the bottom, all of the “A” Class assets will be absorbed and you will miss out on maximum future appreciation. I think there will be some real bargains over the next 12 to 18 months. Again, just my $0.02, take it for what its worth. Clearly Scott is more qualified than I to make any such assertions.
Edited on Oct 16, 2008 13:55
El Hombre, no problem…please keep in mind that I do not consider myself an expert by any means. The thoughts I shared with you are simply that…my thoughts of what I might do if I were in your shoes.
Thanks,
Jarrett
So you’ve been there too Scott! You have to know how to buy Real Estate here in CR…. there’s nothing like it in the world! EVEN with the assistance of a local or a native speaker! The “normal” way of closing the deal doesn’t work here! Just as yelling and raising your voice due to some problem gets you nowhere here! Smile and work it out!
I love it when you show any interest in a property, even a grossly overpriced one that’s been on the market for years, and suddenly the price shoots up while you’re walking the place!
There is a “logic” here in CR with Ticos that if you’re willing to spend $XXX then there must be someone that will spend more! Or the other “logic” is that you left your brain at the airport… fell in love with CR… MUST have this property at ANY cost… and have a shopping bag full of cash that you picked off the money tree you have growing in your yard back in the states!
Tico’s are a very laid back sort of folks… they have time… patience and very rarely place themselves in a position that they HAVE to move on a sale now. Therefore they can wait you out… even if it takes a long time. Sometimes they’ll just wait until the market catches up with their asking price… then ask for more!!! LOL
I’m always lost when people talk about opportunity. There’s always opportunity everywhere/anytime, all you need to do is do your cash flow computations and you’ll know if its a good opportunity. Would you buy a $400k that would rent for $1500??? That’s just an example, but you know what I’m driving at.
Do your OWN homework and figure things out yourself.
I have inspected several condominiums in Nativa for a wealthy American investor who cashed out of the US stock market and found Costa Rica to be a logical economic safe haven for real estate investments.
The condominiums that I inspected were large and definitely up to international construction standards. The project has not been without its ups and downs over the years, however the current developers are very well organized and have provided an attractive product in the $400 to $500K price range.
Please see new thread related to the overall financial crisis entitled: ARE YOU NOT YET SCREAMING HYSTERICALLY ANGRY! at [ https://www.welovecostarica.com/members/forum/openthread.cfm?forum=1&ThreadID=2474 ] I would love to hear your feedback, especially from our American friends.
I can tell you quite bluntly that I am most definitely screaming bloody angry about it!
Scott Oliver – Founder
WeLoveCostaRica.com
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