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Wow, is there an echo in here?
http://www.usatoday.com/money/economy/housing/2009-04-14-vacation-home-sales-recession_N.htm
With any investment that you leverage any down market is going to generate folks that are over-extended… the “extras” like vacation homes and “toys” are usually the first things to go! Have you seen what this economy has done to both the new and used boat and RV markets?
A $2.35 million home reduced to $1.5 million is not typical of a vacation home in Costa Rica and how short sighted to have an interest only mortgage. We bought a home in Costa Rica for less than $200K about four years ago and we are just thrilled.
Agreed. Discretionary cash has vanished. Boats, RV’s vacation homes, vacations themselves…they’re all the same.
Normita, you are correct, a $2MM property is definitely atypical. However, the stress applies at all price points. Clearly there are people that leveraged their assets at home, bought properties at various different price points (including the $200k range) and now owe more on their house than both assets are worth combined. Norma, I am glad you were not one of these people but they are out there…and in numbers. I personally know several of them and their situation is unfortunate but reality. I receive several fire sale emails about similar types of properties each week.
I do not personally sell real estate but the average sales price of the sales (over 200) that I have personally monitored since late 2006 has been just over $210,000 so I would agree Normita, a million dollar home is not a typical vacation home in Costa Rica and as far as I know, none of the regular contributors in this Discussion Forum live in a million dollar home.
Scott Oliver – Founder
WeLoveCostaRica.comScott, I agreed with Normita…it is certainly atypical (uncommon). But like I said…we’d be foolish to think the same pressures are not present at all price points. Different buyers…same financing tools.
I must assume you have made your point. Over and Over and over ad infinitum. Watch out, you’ll break your arm patting yourself on the back. Smugness seems to be at a contagious level.
While different price points in the real estate market might be seeing downward pressures…. I’d have to guess that a $2 million house owned by someone that might have paid too much for it and is currently leveraged well beyond a safe carrying level and has also suffered some other financial setbacks and medical problems is going to see more of this pressure than those that purchased at reasonable prices and are not currently in jeopardy of losing their investment.
As sad a story as it is… it’s really not your typical Costa Rica vacation home owner… or your typical expat here in Costa Rica.
I found these comments from the article very interesting….
>”Traffic has been good, but sales are down. There are many who believe the market has not hit bottom yet, and they are not in any real hurry,” he says.
Ted Jones, chief economist for Stewart Title Guaranty, believes the market’s salvation rests on people who see vacation homes more as sources of personal pleasure than financial gain.
“Many are saying, ‘We’re going to (enjoy) our money.’ … I think the second home market will see a great propensity for growth this year,” he says.<
I guess that means there’s buyers… they’re just more careful about determining REAL value… nothing wrong with that… and for those of us that ENJOY our investments…. the future looks quite nice…
Edited on Apr 15, 2009 13:21
ed, as one who has been condemned and even banned from the forum for a dissenting perspective it is gratifying to see supporting evidence by such a reputable publication…as opposed to merely taking one individual’s word for it, who ironically has a vested interest which he does not publically acknowledge.
Just one other item ed, is it your practice to make disparaging remarks about a member providing valuable input to other readers while you provide no valid content on the topic of your own? Just curious.
You have never been banned from this forum grifz77 so I have no idea why you mention it yet again…
Scott Oliver – Founder
WeLoveCostaRica.comWeird. My username and password are saved in my computer so its the same thing every time…yet after you made the discussion personal I couldn’t log on for a 24 hour period…using the same method as always. Must have been a mere coincidence…sorry. Doesn’t really matter in the end.
I’ve had the same experience on a number of occasions. Don’t anybody be fooled into thinking that the software that underlies this website or that which supports the Internet and our access to it doesn’t have its flaws and glitches. Don’t take it personally.
As David said… I think we’ve all had a problem logging on from time to time. I was unable to do so for two days. I e-mailed Scott who responded within the hour, he checked my password and log on and everything was fine. But I was still unable to get on the site. It cleared itself late the next day. I guess it’s the nature of the beast… no reason to take it personally… I didn’t.
PS… Don’t give up on expressing a different opinion here… on any topic we discuss…. I’ve done so many times with many folks (including Scott) on this site. And engaged in some pointed exchanges. It’s what makes this site so valuable in my eyes… even when we can’t agree on an issue… we both ultimately learn something in the end!
Edited on Apr 16, 2009 06:52
So if we are to understand your comments correctly grisfz77 you live in Canada and not Costa Rica, you don’t even own real estate in Costa Rica but keep on insisting that Scott Oliver, who lives here, and wrote a book about How To Buy Costa Rica Real Estate, who’s involved with real estate just about full time every day and has been involved in hundreds of Costa Rica real estate transactions in the last few years and deals with lots of developers and built a few home shere doesn’t know as much about Costa Rica real estate as you do, is that correct? He’s not the expert but you are?
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