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Hi Folks,
I am new to this forum and the reason that I am here is that back in Jan I took my first vacation to CR and was intrigued by all the opportunities which seem to present themselves in this part of the world. So since I came back I have been researching and gathering information on CR real estate in the hope of buying one.
Lately you must have seen the US real estate troubles in the news, with most markets falling in prices and some cities outright crashing, like in Florida, Nevada and parts of California. Since American investors represent such significant percentage of CR real estate buyers and I assume lots of these are selling real estate in the US to buy CR ones, I was wondering if anyone has seen any signs of any slow down in the CR market? I know that CR market is more international but most markets are global now so I figure I ask around the more experienced hands.
Thank you.
Bienvenido Cougar91 – Welcome
You might check the following thread in which I stated:
“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.com**PS. Mayra has sold five properties this week and all of them were to non-US citizens…
Scott I gotta get down there and work!!! Lol! The NYC market is still hot but the stress is kiling me…
Folks want to know if the problems in the US will affect the market in CR. Not likely.
What occurred in the US housing and mortgage markets over the last few years was a result of low-interest rates which fueled the American dream of home ownership and greedy mortgage brokers and lenders who took advantage of thousands of consumers. Many mortgage contracts were collateralized and then sold as bonds for billions of dollars. Now, people are defaulting on the mortgages and the investment banks and other funds have lost billions and in some cases have been forced to cease operations, with the investors taking huge losses.CR immigration officials stated that 289,237 legal residents live in CR and only 8,400 are US Citizens. Perhaps a small percentage of these US citizens living in CR may have some ties to US based investment problems. But it is highly unlikely that that small amount of US ex-pats could have much of an impact on the financial health of this country. Don’t forget that Canadians as well as many Europeans purchase a lot of property here too and their currency is strong compared to the weakening US dollar.
As long as attractive mortgage money is available, housing markets continue to grow. One of the major advantages in Costa Rica is that more mortgage money is just now beginning to be offered at attractive rates by international lenders like ScotiaBank, HSBC and now CitiBank is entering the market to compete with the other big lenders. Remember, competition is always good for the consumer so expect more mortgage money to become available at better rates. Remember, mortgage money availability is the biggest indicator of a real estate market’s health. The U.S. market has lost millions due to the sub-prime mortgage fiasco and the CR market is continuing to gain strength. Additionally, CR has only about 4 million people, 27% of the land mass is protected, and 40% of the land is untitled offering many years of growth. Considering all of these factors, the CR real estate market has positive conditions that insulate it from the market downturn in the USA. So, if you’re here in CR, the investment opportunities are at your doorstep, but if you’re still in the states waiting for the economy to regain its strength, you better have a lot of patience.
Your right greed is the back bone . It’s not just greedy brokers and lenders. The investors were buying the junk, creating the market of high LTV and no income documentation products in the first place. People will invest in higher return , higher risk products, the lenders and brokers are just the middlemen. The general public in their own greed , lets buy investment properties with no money down and resell later for huge profits. You know how many people I advised not to get into some of the products available, they didnt give a damn either, it’s the American way , I want my piece now I’ll worry later attitude. Blame this on society’s own ignorance too of financial matters.
Well said Charlie. Knowing when to apply the brakes with your investments is the key to success and happiness.
Who’s to blame for the current US housing and mortgage woes?
Some folks are wondering if CR will end up with the same problems the US is now experiencing.I have had residency in CR for the last 13 years and have seen growth occur without the availability of convenient and affordable financing. Three of the largest banks in the world have opened up shop in CR and they are here grow their businesses by funding acceptable land development and housing construction projects. These banks have highly paid specialists who work full time to find opportunities where lending money will make them money. There is no doubt that the availability of funding is what makes an economy grow. Sometime in the future these same banks will pull back and maintain more conservative lending practices once the economy has reached its limit.
Knowing when to apply the brakes is an important part of learning how to do business anywhere in the world.I have made it my business to stay on top of the real estate investment market in Costa Rica and the USA because that is the business I have enjoyed for the last 25 years. I have experienced and understand all aspects of land development and the construction of housing in CR since 1992. And to a certain extent, the CR economy is inevitably tied to the fortune (or misfortune) of the US economy. However CR benefits from the investments of people from all over the world as well. The concept that the big ole USA is the primary contributor to the Costa Rican economy is outdated. Hundreds of MULTI-NATIONAL companies have opened offices here and are hiring more local employees than ever. Many of these local employees will buy housing, now that they have predictable incomes. Where does this income come from? Not just the USA. It comes here from all over the world.
Think about how many plane loads of tourists come here everyday and there is no doubt that a good percentage of these foreigners dream of investing in Costa Rican real estate. And now more than ever the banks are in place to help these real estate buyers make their dreams come true.
Many ex-pats that have been living outside of the USA for years are embarrassed by the pushy gringo mentality that the whole world wants to be like the Ugly Americans. I am appalled by the dominant attitude of American politics and the instant gratification driven marketing of big business in the USA. I lived and worked through two recessions in the USA and know what it’s like to work for nothing until the economy improves. Some of us live and learn and can control our inherent greed.
Focusing on the positive aspects of living healthy in CR and making enough money to be happy is a good thing many of us ex-pats are proud of. A wise man once told me, “don’t let your greed exceed your need”. Those are some words I remind myself of on a regular basis and continuing to make sure my brakes still work is an exercise I’ve found indispensable.
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