State of the Market – Midway 2013

Should I buy or buy and build a house in Costa Rica?

I don’t know the exact percentage but I’d guess at around 90% of the visitors to our offices here start the conversation stating that they would like to buy a house. They are not interested in building. Until recently, this desire went unfulfilled. After looking at the meager house options, the actual base-line interest of the buyer would be exposed: they wanted to own property in The Zone. A house would be the first pick, but barring that, a raw piece of land that they could then build on would be an acceptable fall-back position to fulfill the fundamental interest that they had in owning something here in The Zone.

Most prospective buyers wanted to buy a house. Most prospective buyers bought raw land.

Now things have changed.

State of the Market – March 2013

There might be a b… b… A b-b-b… Hmmm I can’t quite bring myself to say that word, maybe later. Let’s just say that we seem to be experiencing a hot time in the real estate business in Costa Rica’s southern pacific zone. I feel like we are at a new beginning of sorts here in Costa Rica’s southern pacific zone.

State of the market Costa Rica real estate
Get it while its hot! The latest on what is going on in the real estate market in Costa Rica’s southern pacific zone.

From where I sit, overlooking the industries of real estate and hospitality, I’d say we are at the beginning of a new day here. What exactly this means for real estate is a bit hard to say.

Hospitality Sector: Vacation rentals and restaurants are enjoying a brisk business. ICT, the Ministry of Tourism for Costa Rica says that the overall numbers are up. However, the numbers for Hotels are down. I find this interesting. Hotel occupancy is generally the indicator of how tourism as a whole is doing. Costa Rica may be an exception since so many find alternate lodgings, such as vacation rentals, B & B’s, hostels and so on. Pam, over at the Flutterby House (beach hostel) in Uvita says that they are having a swell year.

From Frank Walker’s March Newsletter:
Where Have All The Tourists Gone???
– If you listen to the ministry of tourism people are flocking to Costa Rica.  However, figures from the hotel industry tell a different story.  Figures indicate that the occupancy rate for 2012 was just slightly above 54%.  That’s below 2011 figures.  Industry wide the breakeven point  is 74% occupancy.   A recent survey by the Camera National Turismo which is separate from the ministry of tourism revealed that for the two months of December 2012 and January 2013 which are supposed to be the height of the tourist season occupancy rates ranged from a low of 22.1% in the central valley to 45.3% in Guanacaste. 

Real Estate: There have been a number of sales here on luxury homes above the $2 million mark. One fellow come into the area and has so far purchased a hotel and a number of high-end homes. Reportedly he pulled out of his homeland entirely and has chosen to work with his available resources in this way. Not to discuss the merit of his strategy, but the effect of his acquisitions – they can skew the trends a bit. He is one buyer that caused a number of high-end sales.

In recent discussions with realtors, across the board they are BUSY.

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What Does the Matapalo Police Station Have to do With Real Estate?

I got asked the other day what the opening of the new Matapalo Police station has to do with real estate, and by extension, why is it mentioned in my “Costa Rica real estate” blog? Well, I’ll tell you – it all starts with land.

I was told some time ago about a dinner party here in The Zone where the host got up on to a table and announced: “I would like for all conversations about real estate to stop. If you are unable to comply, please leave.” It is reported that the room went quiet.

Costa Rica Real Estate and a few of its influencing factors
A few of the the “non-real-estate” factors that affect the value of “Costa Rica real estate”

Granted, this was back in “the day” – back when fortunes were being made on the buying and selling of land here in The Zone. Such conversations are not nearly as prevalent now as back then, but they are certainly a daily occurrence in my life, and I suspect that many here would make the same statement.

I contend that all news comes around to affecting, or being affected by land. If you are interested in moving here, migrating, retiring, or simply, to visiting here, the topic of property and its value will enter the picture. The managing of crime has a direct impact on the value of property.
As do:

  • tourism
  • currency
  • climate
  • water
  • taxes
  • animals
  • roads
  • laws
  • residency
  • language
  • culture
  • etc…

I don’t want to have this bulleted list go down through your floor, so the”etc…” embodies all the rest. This list is based on my time spent talking with people who want to move or migrate to here.

Returning to Matapalo: it is receiving a steady flow of foreigners moving in as re-locators, migrators, and investors. They did not have a police station there before, so it could be reasoned that any self respecting thief would view that area as the place to be and to ply their trade. The presence of a police station has a positive effect on this scenario. One would then surmise that the value of land there will hold steady or perhaps increase.

Along with some of the other appealing amenities: screaming views, proximity to both Manuel Antonio and Dominical, proximity to a gorgeous, unpopulated and miles long beach, quiet living in Costa Rica’s tropical jungle, you can now add “enhanced security due to the presence of a police station”. My question: how can a Costa Rica real estate blog not mention such a thing?

Currency: The exchange rate of the colon versus the dollar. One of the hot topics going on right now in many sectors of the globe is what the effect of the “recovery” is having on tourism.

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Is The Zone at the Tipping Point?

One of the screaming ocean views in the southern pacific zone of Costa Rica.

The place is packed. More and more people who bought land in the past are building or have built (and are happy about it.) Travel & Leisure put The Zone as the #1 place to visit for 2013. What the heck is going on?

I was invited to a house christening last night by Richard & Debby up at Costa Verde Estates. It was a small gathering, made up primarily of migrators, most of whom have just recently built a house or are in the process of doing so. I observed and heard some rather interesting indicators of a tipping point there.

One of the screaming ocean views in the southern pacific zone of Costa Rica.
Richard & Debby: Living the good life in Costa Rica’s southern pacific zone. The view is partial, and is from their home in Costa Verde Estates.
  • numerous statements of an obvious love of Costa Rica and The Zone in particular
  • they were happy with their builder and the process was relatively smooth
  • comments about the resources now available to a home builder in Costa Rica
  • comments about how many people are talking about The Zone back home
  • comments on how many people there are vacationing in The Zone
  • how packed the hotels and vacation rentals are
  • guesses as to what the next 10 years are going to be like here
  • the reality (or not) of the international airport going into Palmar Sur (majority – NOT)
  • the effect of the highway being paved between Quepos and Dominical

There was a palpable feeling of “we are at the tipping point” here.

The facts that alcohol consumption

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State of the Market – October 2012

Houses at San Francisco's Fisherman's Wharf

What is the current market like in Costa Rica real estate?

I get asked this question quite a lot these days. Well, actually that is probably the question that characterizes the life of a real estate agent anywhere – and probably at any time, except when it is clearly known that there is a recession or a boom, neither of which describes the time we’re in right now.

Houses at San Francisco's Fisherman's Wharf

We are currently in the depths of the rainiest time of the year here in The Zone (read: Costa Ballena), the area of the towns around Dominical, Uvita and Ojochal. For some reason this is the “low season” for tourism here. For those of us that live here, it is a delightful time of year. Sure, there are lots of days filled with rain, and at times unbelievable rains. But this is part of the appeal that brought us here in the first place. These rains are also what make the rest of the year so appealing. The southern pacific zone of Costa Rica is one of the lushest areas of Costa Rica, largely due to the fact that it truly is rain forest.

If I were to shop for property here in The Zone, I think that I would consider looking in October. You’d have no problem finding an available realtor, and you’d get to see what life is really like here, as well as be able to see how a potential property handles the rain.

Current Market:
The months leading up to October saw a surge in house sales. There was considerable activity in real estate, almost all of it in the house sector. Lots, on the other hand, not so much.

My crystal ball says

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Costa Rica Real Estate – Talk Show 21

Has the Costa Rica real estate market hit the bottom? As realtors in Costa Rica we frequently get asked this question, so we decided to share our thoughts on why there are signs pointing toward a positive answer. Regardless of what we think, more and more people are retiring, relocating, and investing in Costa Rica … Read more

Talk Show 20 – A Good Time To Buy Costa Rica Real Estate

  The Guys In The Zone discuss the state of the Costa Rica real estate market in Uvita. What does an abundance of property options–lots, large parcels, houses, and commercial–mean for buyers? Why are so many families and retirees relocating to Costa Rica? Drawing on nearly 15 years of experience, Ben and Rod answer these … Read more