I have received numerous inquiries over the last few days, from sellers of property here, asking how the season is going for Costa Rica real estate. Here is my answer.
Things having to do with real estate here in Costa Rica’s southern pacific zone are not getting better. I make this point because I understand that there is some talk about optimism in the U. S. economy. The stock market is high right now. Here? Well, they say it is the darkest hour just before it gets light – maybe that’s what’s going on. In my view, we are in a double dip.
The world economy fell apart in 2008. We experienced months of not selling. We continued to work, but we were not selling. At that time I wrote 2 articles that discussed what it was like.
Article #1: There Is No Market Here – In that article I related a conversation I had with a former Wall Street analyst. It was written in dialogue format:
Man: “You’re probably showing property, but not selling. The people who are looking are not determined to buy, they would just like to see what there is and open themselves to the possibility of finding the piece that they can’t live without. If they are going to buy, it would have to be a steal. But barring those events, there is no sale”.
Vaughn: Thinking to himself “I’d say that pretty well sums up our market place over the past year.”
Article #2: Kicking Tires in Paradise – “ They are intent on buying some land, they came here to buy land, they found land that will more than suit their needs and budget, but that extra spark of “I think I’ll buy this property now” is lacking. They are going back home so that they can return in a few months, maybe, and buy something then.”
Now, don’t get me wrong. We have a number of clients who purchased land during that time, and they are happy with their purchases. We find that, despite the economy, the only “regret” statements we hear are “I wish I had bought.”
In a recent conversation I had with one of my competitors here, he indicated to me that his company has had 9 strong deals going since January. Of those 9, 8 had fallen out, meaning they didn’t happen for one reason or another.
Here at Guys In The Zone we have had a similar track record. Deals falling out for the strangest of reasons. One buyer due to health problems. Another fall-out was due to a seller not disclosing a legal problem he had with a property that he had listed with us. This in spite of having motivated buyers.
There is activity, but clearly buyers are content to wait for a more opportune moment that may or may not come. That is how I would characterize the current market. Between the first dip and the second, there was a period of near normal business around The Zone.
How to Explain
What is it that causes this sort of down trend? As I mentioned, there isn’t a lack of action. There seems to be plenty of people around looking for land. And the reasons for buying land in Costa Rica are on the increase. (It seems that people will always find Costa Rica real estate desirable.)
Many people are wanting to escape from the unpleasant situations “back home” (e.g., political, economic, insurance, stressful to name a few). Some are wanting to get back to nature, live off the grid. The Internet allows many people to live where they want to in the world and Costa Rica now offers pretty good Internet access, even deep in the jungle. Early retirees are here looking to buy, especially now while the prices are so low.
Certainly it isn’t the quality of the product. Costa Rica has, and will likely always have, the kind of quality that causes the majority of its visitors to wonder if they could make changes to their life such that they could make Costa Rica home.
I enjoyed a comment that I heard from a fellow real estate professional the other day: “I don’t like working with the $100,000 ocean view lots. There are just too many of them. You can take a person out and show them these beautiful properties. They fall in love with one of them, but they will not buy because they will feel like they haven’t seen them all, and that maybe there is a better one out there.”
Interesting point of view. He focuses more on the higher end homes because the inventory isn’t so saturated, and a serious buyer will recognize that he needs to decide now on a property that he/she has seen and loved.
I think that right now is about the best time I’ve ever seen to buy a property in Costa Rica. But this would require a Warren Buffet perspective on the world. To buy when no one else is buying requires a toughness that only a few seem to possess.
It is an interesting time to be in real estate here in Uvita Costa Rica. I still feel that this is a good place to be, down market and all. The trick now is to be content with a diet of rice and beans, and some of the most glorious displays that mother nature can dish up. It is a bit tough to earn a buck, but Costa Rica is a great place to live.