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The US RR market is in the toilet and mind you the US market is the market that fuels much of the market in CR since US citizens sell their RR to buy in CR since RR can’t be financed in CR.
So homes can’t be sold in the US yet there is very little if anything on this website about a downturn in CR.
Little ole Costa Rica defying the odds – I feel that I’m lead to believe that the RR market in CR is still going at 100mph if I read this website only.
Care to have someone write about a difficult RR market in CR anytime soon? Surely, if someone can be found to write about the good times, someone can be found to write about the bad times. It just isn’t logically possible that the CR RR market is what is was.
How could any consensus on the CR real estate market ever materialize? There may be some government figures on property tax intake, but how reliable an indicator would that be anyway? Is there any way to get more than an anecdotal account of how things are going?
Perhaps Scott might enlighten us as to how his own business has fared over the last 9 months.
Perhaps the reason you have seen nothing written about a difficult market in Costa Rica is because it is not a difficult market. The Central Pacific area continues to be strong with many developments still selling a large percentage of their inventory before they even break ground. From what I have read and the people I have talked to, the Central Valley area, especially the Escazu and Santa Ana areas continue to be strong as well. While it is true that prices are not going up 50% to 100% in 6 to 12 months as they did a couple of years ago, the market still is experiencing at least a 10% to 20% increase over that same period. The market increase is perhaps more realistic now, but definitely is not difficult. I would disagree with the blanket statement that the US market is in the toilet as well. While there are still many areas that have leveled off and prices in some areas have come down, there are still many areas that are still experiencing strong sales. On a recent trip to California I recieved a real estate flyer in the mail listing 20 homes that had recently sold in that area. 75% of the homes sold for more than the asking price. There is still an incredible amount of disposible income that many people have and a good portion of that is still finding it’s way into Costa Rica. When you have a feeding frenzy during a “seller’s” market, anyone can sell real estate. The majority of the complaints I hear about the market here is from people that are finding it difficult to unload a crummy piece of property that they over paid for 2 years ago expecting to double their money. They refuse to invest anything in improving the property or invest anything in marketing it properly.
I think Sprite is right. The anecdotal account I am hearing now (from contractors working in the area) is that Guanacaste is still strong but leveling off a little. The Central Pacific where I am is just getting started because of the road improvement projects. There are three new condo developments in the little town I live in and Jaco is still building like crazy. Again, from what I’ve heard, the western part of San Jose like Escazu and Santa Ana are still doing well. An investor I talked to says the Carribean coast is now the place people are looking to buy before prices go crazy over there.
It may take a while for the market in the US to materialize down here. The US market has obviously hit a major stumbling block but people still have a ton of equity in their homes if they have owned them for any period of time. Time will tell I guess……
First, it is absolutely not the case that “real estate cannot be financed in Costa Rica”. Quite the opposite is true. Every bank operating here does, in fact, offer mortgage financing and some U.S. lenders are beginning to also. So financining is available.
Second, it’s important to put the two real estate markets in perspective. The U.S. market size is over 300 million people and fifty states (many quite large). The Costa Rican market is some 4 million people (1/75th the size of the U.S. market) and the physical size of the state of Vermont. Writers above are absolutely correct that, while the overall U.S. real estate market may be on a serious downturn, there are still plenty of homeowners who can sell their properties, gain access to their equity, and move it into this very small arena. And plenty more have access to other wealth. Has anyone checked the Dow Industrial Average’s performance for the past year?
Fact is, it doesn’t matter to buyers or sellers what the market in either area is doing. The only thing that matters to you or to me is what’s happening to you or to me. If I have a property to sell, I need only one buyer. If I’m buying, I need only one property that fits my needs. The market is irrelevant on an individual level.
When we sold our home in the U.S. there were competitive listings that had been on the market for over a year. Ours sold in seventeen days because we had the house the buyer wanted and he had the money. It didn’t matter that the stock market or the real estate market was down that week.
Costa Rica’s real estate market should continue to be strong for a long time because a relatively few Americans, Canadians and Europeans can make a big splash in this very small pond. Even in the worst of times, somebody has money.
If you’re looking for doom and gloom the US housing market offers plenty of that. The advent of affordable financing in CR has created an attractive housing market for the Latinos and foreigners as well. With Scotia Bank, HSBC and now Citi Bank purchasing Costa Rican financial institutions the competition will drive the market to its limit. The limit is difficult to envision because for many years the Costa Rican market did not offer mortgage financing and now with these major financial institutions all competing to lend money in little ole Costa Rica you will see tremendous growth in the housing sector. A downturn or correction as it’s referred to in the USA is an inevitable part of life there. Remember what it was like to get your first new car and borrow the money from the bank. I for one was honored to be accepted into the adult financial world. The Ticos are now being 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. Additionally, North American real estate investors gravitate where the opportunities are attractive. Since the US real estate market is correcting and the opportunities are limited these investors will take their money and borrowing power to the markets that offer opportunities and appreciation. Costa Rica truly is the Pura Vida! If you’re already here the opportunities are at your doorstep. But if you’re still in North America wanting to get out, don’t let the door hit you in the trasero.
I echo what David has said, the real estate market has weakened in portions of the US, but as a broker in Manhattan I can tell you it is still on fire. Why? Because the US economy is good, interest rates cheap and the desire to own is stronger than the desire to rent. And of the millions of Americans that do own homes many have for 10 years or more and many boomers for 20 or more, so there is plenty of equity to tap into at very attractive rates. We don’t have the “perfect storm” effect quite yet in the US and I don’t have a crystal ball but as many wiser people have pointed out; “Markets go up and markets go down” and that has not lead to the end of the world.
Quality real estate in our geographical area of Escazu and Santa Ana is sold long before it’s built – Period. The pre-construction property we featured in Santa Ana in last week’s newsletter is now sold out and they haven’t started on the foundations yet.
One of our recommended Realtors – Mayra Claveria sold nine properties last WEEK.
And sorry to repeat myself but the USA isn’t the only market that matters, there are numerous Europeans, Canadians, Israelis and people from other Central and Latin American countries buying real estate here and I have also heard (but not confirmed) that one of the mega-developers from Dubai is here scouting for land.
Mortgages in the US are getting tougher but mortgages are getting easier in Costa Rica and with the demographics the way they are, the Costa Rica boom is far from over.
Scott Oliver – Founder
WeLoveCostaRica.comI forgot about the increasing maturity of the banking and financing system in CR. That is a huge factor as far as real estate appreciation is concerned. When some the other factors are taken in to consideration as well (increasing boomer retirement money, multiple nationalities in the market and limited size of CR, it seems probable that CR real estate
values will grow at a positive pace. This would be especially positive relative to U.S. geography right now. In the absence of good market studies, I am encouraged to hear the anecdotal evidence from Scott about values west of San Jose.
Whether it is speculation or investment, one is usually putting money into a guess. ANY information is always welcome.I bought a new luxury home in Santa Ana in late May 2007. I believe in this area 100% and the growth in construction is truly mind boggling.
The Forum II Executive Business Park will be finished soon and we’ll have thousands more people – including some of the highest paid executives in the country – coming into the area on a daily basis.
This great for developers of course however, it’s possible that heavy traffic could become a problem.
Scott Oliver – Founder
WeLoveCostaRica.comSee more about Forum I at
See more about Forum II at
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