Costa Rica Real Estate has seen a lot of downs and ups and downs in my 7 years in Guanacaste. A prime example are the surf side lots in Potrero. When I arrived they were giving the things away for as low as $7,000 dollars apiece. About a year or so in to my sojourn here the lots started a fantastic spiral along with all of the tourism and vacation style property in the area. Fueled by the equity line of credit craze that has ultimately left America gasping for financial air, prices of these lots zoomed up 500% in as little as a year. Prices in the area took on a surreal Californiaesque notion of scarcity and everybody came down with their imaginary equity and purchased incredibly overpriced real estate. Said lots mentioned above were suddenly $50,000.00 and up and selling like hotcakes.
Construction trucks rumbled by daily tearing up the roads delivering gravel, cement, cinder blocks, and metal rods for all the projects taking place.
Well it is now roughly three years after the trucks have disappeared and the roads are holding up pretty well. Unfortunately so are the over inflated prices that took hold in the ‘equity boom at the beach” as I like to call it. As a University of Pennsylvania economist and a former Realtor it has intrigued me that the normal rules of supply and demand have not taken hold here nor have we seen the dramatic decrease in overall Real Estate prices that one would expect in a low demand market. I open the floor to opinions and I am very interested in what people think about this. Especially the old hands that have been through the good times and the bad down here. Of course there has been a slight softening of prices on some level but nothing like I would expect in a market that is achieving next to no sales.
The only thing that comes to mind is that the market is so inactive that the push and pull of supply and demand has not had the expected effect. The other notion that comes to mind is that the people who invested here in the first place were pretty well off to begin with and are just waiting it out. It takes cash to invest in Costa Rica. Bank financing is not a big part of the play down here. So maybe these people are waiting for the inevitable rebound. All will be well as long as those 60 Nicaraguan soldiers don’t overrun the country as has been over intimated on the local news.
As far as the Ticos are concerned, well they have always been poor and I notice that they particularly like throwing around big numbers. They marry those numbers and do not want to let them go, I think it makes them feel important which to them is more important than having the actual money. I am not sure about the rest of the country but poor landed Ticos quoting astronomical figures for properties is very common in this area. Kind of makes you think. I actually like their priorities.
This article should really have a big question mark attached to it as I remain perplexed at this market. I welcome second and even third opinions on this. I happen to know that my clients in the central valley are doing pretty well selling to the retired crowd and the well heeled Ticos. But here at the beach business remains soft and prices in my opinion high. As I mentioned there is not much activity so maybe people need to come down and start making offers and begin some active supply and demand economics. To me the stagnancy comes from an almost no demand market but as infrastructure slowly catches up to Guanacaste I think this too will change, and hopefully supply and demand will once again meet in the middle.
Article submitted by Rodgers Bestgen of Costa Rica Multiple Listings
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We have just finished subdividing a portion of river front land in the Guanacaste and have listed 5000 m2 lots starting at $12,845, that’s $2.50 m2. I have noticed that prices have been coming down and we know that people are looking at bargains and we believe that we are in a position to provide them the best value in the Guanacaste. I do agree that some owners still have the prices at unrealistic pre 2008 price levels, but they are starting to come into reality with large discounts visible now. I believe prices still must drop further to see properties change hands but it is happening. We are doing it and getting some great repsonse, 1.24 acres with teak for under $13,000, how can you loose?
I have just retired and am looking around Costa Rica for aa nice little house with a garden, and am surprised to find that prices here are about the same as they were back in the states(New Mexico). Many places in the states, such as Kansas and Lousiana are actually a good deal cheaper. With these prices, I dont hink you will see a lot of Americans comming down, except the very wealthy, who can afford the large nice homes.
One thing for sure, Costa Rica is not Kansas and/or Louisiana and there are a lot of good deals – one just has to know where to look for them. Like the US home prices have dropped in CR, but if you want a ocean/beach front property, you will pay far less than something similar in the US. like Tambor, which is still very reasonable.
I’ve been perplexed as to new property values along the Guanacaste coast as well – and even more perplexed at the super-wealthy ex-pats who illegally build in consession zone, and get away with it! I now see empty cliff-side homes used as rentals (living in some areas of Guanacaste is still extreamly difficult for a spoiled American I guess), and almost everything I see now-a-days is “se vende.” For those who are wealthy enough to afford having a second (abandoned) home in this beautiful area, more power to you! May your airconditioner stay firmly in place in your living room wall during your absence. For those who bought, thinking a piece of property or house would be a wise “investment” and now you are stuck and trying to recap your investement and move home, you should have known better. For folk like me, that would like to live and contribute to the tico society as a retired US expat – and doesn’t have the money to buy a piece of land for 500K, I wait until someone out there is desperate enough to sell their property/home at a price equal to the value of the asset. When you are ready – call me! DuCharme
I resided in Costa Rica from 2000 to 2002 and fell victim to the Villalovos finalcial scam, lost must of my savings. Would you know what has occurred with the investigation and restitution of the funds confiscated by the Government?
Since that time, we has been struggling to keep our heads above water. Any information would be greatly appreciated.
Sincerely, a concerned reader,Al Denoe- Lewis.Phone (954)746- 7518
IMHO, there are several factors in play in the Guanacaste market. The well-heeled from Canada, Britain and Germany are still buying. Location, location, location…the beaches in Mexico are too dangerous, and there are millions of baby boomers that are not going to retire in the US or one of the aforementioned countries.
The really wealthy like Steve Case, Richard Branson, Deepak Chopra find owning property in a “blue-zone” quite chic. Never mind the scads of celebrities like Mel Gibson that own swaths down there. Simply put, Costa Rica has cache right now and that’s expensive…