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Strange…wonder what this is doing to real estate prices in CR?
http://www.reuters.com/article/cuba/idUSN19429370
Finally, an individual in the CR real estate community that is not fuling propaganda.
“Century 21 representative Franck Viale said real estate business is off 90 percent from last year.”Sales for many Realtors have declined dramatically – especially in Guanacaste – but so far real estate prices in Costa Rica have remained remarkably stable. I know of no area in Costa Rica where real estate prices are down dramatically across the board.
Facts are facts no? This is not “propaganda.” But if you believe that real estate prices have come down significantly, please feel free to show us those facts.
Only a few days ago we reproduced the latest Costa Rica tourism numbers at [ https://www.welovecostarica.com/members/2054.cfm ]
“Between the beginning of September 2008 and the end of February 2009 there were 82,000 less tourist visitors entering Costa Rica in comparison with the same period in the previous year…
This is a drop of 8%. Some 54% of the tourists typically come from the USA and with the recession in the USA – some are now using the word depression – those numbers have been affected. Guanacaste has been hit the hardest with a drop of round 15% whereas San Jose has been more stable…
Carlos Ricardo Benavides, the Minister of Tourism assurered that “this did not take us by surprise and we weren’t sleeping” and added that they are preparing a $20 million budget for promoting Costa Rica this year. Alberto López, the director the National Chamber of Tourism stated that he feels tourism in Costa Rica for the full year 2009 will probably be about 7% lower than 2008.
Earlier in the year in the 24th January 2008 edition of La Nacion newspaper, although the first half of 2008 was excellent, the number of tourists visiting Costa Rica during the last few months of 2008 began to decline slightly because of the economic crisis in the USA.
In total however, Costa Rica received over 2,000,000 tourists in 2008 which is 100,000 more than 2007 and a new record.”
In conclusion, based on what’s going on in the world I would suggest that an 8% drop shows incredible resiliency wouldn’t you?
Scott Oliver – Founder
WeLoveCostaRica.comThere is always an economic lag effect between developing and developed countries. I will wait to see the 2009 vs. 2010 numbers before I fully accept the “resilient nature” of CR real estate. Pacific Coast real estate may be a relative bargain by next spring. By all indications thus far, the decision to wait to purchase in south Nicoya will result in a 20-25% price reduction over 2 years. Also, there are significantly more properties on the market longer and more available from foreign owners in a financial bind. The Tico owners have the patience of Job.
Holy crow Scott…are we supposed to accept your words as “facts” just because you said them??? That’s fairly presumptuous of a person who has a vested interest in propping up the price and/or desirability/image of real estate in that country. What you say here, can not be substantiated due to lack of a published reporting system, “but so far real estate prices in Costa Rica have remained remarkably stable. I know of no area in Costa Rica where real estate prices are down dramatically across the board.” Perhaps if realtors and real estate professionals in CR, who are self admittedly not busy these days, focused some of their energies on putting a published, MLS style system in place, your words could one day be considered fact…but until then Scott, your words are nothing more than your opinion, educated, biased or not.
What is fact Scott is this week I was sent an email titled “Flamingo Firesale” by one of the brokers I work with in that area. This is one of three emails I have received this week expressing a “fire sale” on a Guanacaste property. I think you are failing to acknowledge these type of sales…which is begining to represent an increasing proportion of the sales in that area according to my sources. And if we could speak specifically to Guanacaste, from the article many of the developments have come to a standstill…could this be why you haven’t seen prices fall? Is it because there have been no sales of that type of property? Nevertheless, if sales have dropped by 90% and distressed sales have increased by any proportion, prices are either ready to move south or already have, which has been my experience in that market over the last 6 months.
One question for you Scott that will enable the readers of this thread and your website to better understand if your words are fact or opinion; if prices in Guanacaste had hypothetically fallen or risen by 3% “across the board” in the last year, could you prove it?
The asking price may have risen, but the selling price/offers are well below that. I know that for certain in Guanacaste.
I know of two Canadian couples who both have visited for 6 months per year and have done so for the past 12-15 years.
One couple had residency and had a long time rental. The others owned a beautiful home. Both have sold everything including vehicles and are returning to Canada within the next two weeks.The published tourism numbers are facts which I believe is the subject of the thread you started, facts about the exact increase or decline in real estate prices are more ‘complicado.’
We don’t have an MLS system here and it would take a very brave person to invest millions of dollars developing an MLS system for such a tiny market.
There are isolated fire sales and certainly sellers are more willing than ever before to listen offers but the vast majority of experienced developers that we recommend have not dropped their prices at all… Incidentally, I have featured a number of ‘Fire Sale’ properties so we know some sellers are desperate:
1. Foreclosure in the USA – Means special price for you in Costa Rica – US$160K or your best offer! Good possibilities… [ https://www.welovecostarica.com/public/2101.cfm ]
2. FIRE SALE! MAKE AN OFFER! 1.5 Acres Costa Rica Commercial Zoned Beachfront Land For Sale – Your own boat launch for US$450,000 or best offer. Sell MUST sell! [ https://www.welovecostarica.com/public/1724.cfm ]
3. Heredia Real Estate For Sale ** HALF PRICE ** – Two new quality homes built by, and for discerning American buyers for sale for just $200,000 – Or buy one for only US$115K [ https://www.welovecostarica.com/public/1425.cfm ]Clearly without an accurate and comprehensive MLS system nobody can tell you that the overall market is up or down by exactly 3% but in living here and dealing with numerous Realtors, dozens of developers and real estate attorneys every single day of the week, I would hope that if prices were down by 20% or more one of us might notice …
I can confirm that none of the experienced developers with a proven track record of delivering a quality product that we recommend on this site have lowered their prices.
Tourism to Guanacaste is certainly suffering more than the Central Valley and I would expect prices to fall harder there because of that but, here in the Central Valley a few other areas, there is no over supply of quality real estate, quite the contrary, and the fact that a few projects have been put on hold means that in some areas Costa Rica does not presently have enough completed quality real estate for sale and that is also helping to keep prices very stable indeed.
How long this will continue? I have no idea but if I genuinely believed that Costa Rica real estate prices had dropped substantially I would be a fool not to admit it…
Scott Oliver – Founder
WeLoveCostaRica.comIncidentally I am working on a new market update with the help of our Recommended Realtors so we’ll have some real sales data in the next week or so…
There’s not doubt the market here in Costa Rica is down… be it in sales volume or price… how much is up for debate! And yes… there will be folks caught short that will have to make “distressed” sales for one reason or another. So while we might not all agree on the real numbers I think most of us can agree that the ability of the CR real estate market to ride out this mess without the total bloodshed we’re seeing in the US is MUCH more likely!
Remember this… right now the prime rate is at an all time low… and as such many of the loans that folks took to fund their purchases in CR (HELOCs and other adjustable notes) are still very reasonable. So if the brorrower hasn’t had other factors hit them (job, business, or investment losses) they’re pretty secure at the moment. When the fiscal policy of “creating” money to fix this mess catches up with the boys in Washington and inflation takes hold… and rates start to rise… then we’ll see how the market holds up here. The HELOC market is the other ticking timebomb Washington has to deal with when working out fiscal policy… and the reason that rates may stay low for some time to come.
There’s no doubt a lag involved in seeing the true effect of the world economy on CR real estate… but if things get as bad as they look in the US…. CR real estate may look even more attractive not only from an investment standpoint but also as a lifeboat for those able to afford to jump ship.
No matter how things work out (I don’t have a crystal ball nor am I in the RE business)… the market in CR looks a lot more able to ride out this storm in better shape then a lot of other places in the world.
Edited on Mar 22, 2009 06:51
Thank you once again for your very astute feedback Imxploring
We will be publishing a series of market updates over the next few weeks which will give a fairly clear indication – although admittedly not ‘scientific fact’ – of which real estate markets are holding steady and which markets are seeing declines.
As grifz77 has pointed out, the Guanacaste area is where the prices are the presently the weakest and as always, there are exceptions but I think we’ll find that this price weakness will probably move South down the Pacific coast before it starts affecting the Central Valley area…
Scott Oliver – Founder
WeLoveCostaRica.comI guess my thought is so many people went to Costa Rica to buy “bargain” properties that the price went up,, and up, and up and many people paid way too much. Just in the States people are greedy and stupid. I have been a Realtor for 30 + years and have seen this happen time and time again. When I see posts on this sight for Condo for only $350,000 or bargin homes for less than $400,000 Those are U.S. prices and can not and will not be sustained unless you are looking to the future of C.R. in 2040. WE will then probably look back and say….gee what a deal that was….but I for one will be long gone. Real Estate booms and then it crashes…always has and always will
A “bargain” is relative, but try to find a prime, high bluff full ocean view property on the US West Coast with sufficient resort, therapeutic and recreational activities, world class food, a commercial center/town and a melting pot of nationalities that is $200,000/acre at most, many @ $120,000/acre or less(high side in CR). Also on the Nicoya Penninsula which is a 4-5 hour trip by car, 30 mins. by plane (Tambor) to SJO if you hit the ferry + traffic right.
Please don’t try to compare the two. One is in a developed nation…the other is not. The price is what it is for a reason…demand is sufficient for that type of property accompanied by first world amenities.
Scott the “facts” you were referring to in your first response, “Sales for many Realtors have declined dramatically – especially in Guanacaste – but so far real estate prices in Costa Rica have remained remarkably stable. I know of no area in Costa Rica where real estate prices are down dramatically across the board.
Facts are facts no? This is not “propaganda.” But if you believe that real estate prices have come down significantly, please feel free to show us those facts.”
Please don’t imply that those facts are now related directly to the title of the post when you were speaking about the facts of real estate prices. Clearly the propaganda I was referring to was the incessant denial of mass impacts on CR real estate by the current economic crisis.
Scott, even your “experienced developers with a proven track record of delivering a quality product” are not immune from economic realities and sooner or later will have to lower there prices if they want to sell anything. There is little or no money being loaned in CR and the little that is available is expensive. There is also not a lot of the disposable income that people used in the past to buy vacation homes whuch in turn inflated prices due to large demand and small supply. Most of this disposable income was derived from peple using there houses in the USA as banks and that is now over. It is not just Costa Rica that will feel this pain but most of Latin america and the world. I do not need to substaniate this with MLS figures either, it is fact. Talk to ANY agent in Costa Rica and if they tell you business has not gone down they are lying. I own 2 large pieces of property in CR and I like you Scott love this country but I am not blind to economic reality either.
I think that now is a great time to start purchasing property in CR as there are many motivated sellers so I will be looking for bargains and making offers but at prices that are in line with the economic conditions.Of course none of us know for how long the resilient markets will remain resilient.
We do have prices weakness in different areas and we’re trying to substantiate that now…
And please! I never once said that business was not down – real estate sales are down dramatically in nearly EVERY geographical area – including where we are in the Central Valley… But I also need to point out that we are also definitely lacking quality product…
Scott Oliver – Founder
WeLoveCostaRica.com
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