Recently I have undertaken a rather difficult, or shall I say “turbulent” task of informing some sellers about the realities of today’s real estate market.
This is a daunting task. Needless to say, most sellers never got “The Memo” that was dated sometime in 2007. In the eyes of real estate professionals, our industry changed drastically (to be nice) at that time, well in advance of the financial credit market collapse.
It was a symptom of too much easy credit, the “ease” of making loads of cash and some serious Wall Street shenanigans. Many were duped into believing that their properties would appreciate forever, yet the markets had another plan.
The Uvita Real Estate Market.
In Uvita, Costa Rica we experienced almost parabolic appreciation from the early 2000’s to 2006 as it was labeled the commercial center for the Southern Zone.
In the center of the commercial area, prices began near $25 per meter and ultimately fetched near $160 per meter at the height. But no one ever questioned why…
- Where were the fundamentals in such an investment?
- Who could buy at that price and still generate profits from any such business at that cost basis?
Similarly, the residential market followed took the same path… Whether it was raw land or residential construction, there was no thoughtful analysis of valuations as most believed that the sky was the limit. But hey! It is easy making millions, right?
Today, the real estate market in Uvita is the same as many cities throughout the world. There’s excessive supply, yet demand is screaming for change!
Although Uvita is clearly poised to become the commercial center for the Costa Ballena area, it would be prudent that sellers, buyers and the rest of us, open our eyes to the possibility of, dare I say it, new expectations – in order for the market to proceed forward.
It would be this authors’ opinion that prices should retract in the order of 25% – if not done already – to be considered by sophisticated real estate investors. Actually I may be too conservative. As one expert recently wrote, “At least 25% of American homeowners, or some 35 million dwellings, have negative equity”.
It is time that sellers wake up to the fact that this is 2011, and not 2006!
Uvita Real Estate For Sale
If you have ever dreamed of living in a tropical location as close to “paradise” as you can get, please don’t hesitate to contact our Recommended Costa Rica Realtor John Wieland in the Southern Pacific area, by using the simple form below:
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