Retirement Mecca Booms in Western Panama
BOQUETE, Panama – About 100 yards from the guard gate at Valle Escondido, a $100 million housing and resort project in this mountain town, a wooden sign reads “Welcome to Paradise.”
With its uniform buildings and pseudocolonial decor, Valle Escondido, or “HiddenValley,” resembles a theme park. Built on a former coffee farm, this massive community with all its luxurious amenities and beautiful mountain vistas might be paradise for some.
But here, in this once sleepy coffee town in the western highlands of Panama, Valle Escondido has had far-reaching effects. It helped start a real estate boom that has catapulted Boquete to the lists of best places to retire, bringing an influx of expatriates from North America and Europe that has changed the landscape and economy of the region.
What used to be a weekend town for Panamanians, and a community that woke up for the coffee harvest and its annual fair in January, has become a busy tourist hub that now hosts about a half-dozen real estate offices, all vying for expatriate money.
Around the BoqueteValley, big projects such as Valle Escondido are rising out of the lush ground. Shopping centers are under construction, with some already erected in the center of town. Houses under construction perch on the hillsides framing the valley, the gray of brick and concrete standing out against the deep green.
The boom has brought jobs to area residents, but many argue that this is temporary, and that a good number of people who come to work in Boquete are from outlying areas. Many boqueteños have gained from selling property to foreigners, though rumors of shady land deals abound.
A few signs – including graffiti – displaying anti-North American sentiment have popped up, and petty crime, something unheard of before, has made its appearance. Meanwhile, property prices are spiking, leaving some locals hard pressed to find affordable rent, and raising house prices to levels some expatriates can’t afford.
This takes on new meaning as the housing market in the United States languishes, and the sale of homes – the main source of funding a move abroad for many retirees – is no longer an immediate given.
Yet, construction continues. And for some who have moved here, it’s still a nice little town in the mountains.
U.S. businessman Sam Taliaferro bought a house in Boquete in 2000 because he loved the tranquility of the place.
“But there was nothing to do,” he said.
Soon enough, Taliaferro, 54, realized that the beauty he admired about this place, a town he had visited often with his Panamanian wife,would make for a great spot to retire.
He embarked on his vision that would become Valle Escondido, enlisting the help of contacts he made in the overseas-lifestyle magazine International Living to promote the project.
Sure enough, people came. Boquete made Forbes magazine’s top five places to retire in 2005 and was heralded by the U.S. retiree association AARP. The New York Times, Los Angeles Times and other big media outlets have sent reporters here to find out what the draw is.
Since breaking ground in 2001, Valle Escondido has built and sold about 150 units at prices starting at $150,000 for a condominium. A second phase of 180 units is planned, Taliaferro said; prices for these new units are expected to jump up to $225,000.
Some 1,000 expatriates have moved to the valley in just the past five years, said Boquete Mayor Manolo Ruiz. “They came here because of security, climate and affordable land,” he said.
The local government has begun efforts to bring the construction boom under control with a more organized approach at ordinances and permits, according to Ruiz, who points out that several of the finished houses on the hillsides were built illegally years ago.
No more of that, he said.
But the incentives to build in the country remain, for retirees at least. The Panamanian government allows for an up to 20-year tax break on new houses built for expatriates, and senior citizens enjoy a myriad of other discounts and benefits.
Properties are also fully titled, unlike in Mexico, for example, where a local has to cosign, said Dave Ross from the U.S. state of California, who retired in Boquete with his wife Erin in 2005.
Health care in Panama, and in Boquete with its six new clinics, is up to the standards many retirees expect back home. And doctors here make “house calls,” which is now unheard of in the United States, Ross said.
Also, the use of the dollar makes financial transactions a lot easier.
Climate-wise, Boquete is a sharp contrast to most of Panama. Up in the mountains the weather is cool and temperate, unlike the muggy, hot weather that prevails in most other parts of this tropical country (see separate Exploring story).
“This is it,” said Ross, who read about Boquete in International Living. Beverly Stearns, a New York native, visited more than 10 places, from Texas to Guatemala, with her husband while looking for a place to retire.
But “we knew we couldn’t retire in the United States,” she said. Now, Stearns, 63, is building a “modest” home just outside of Boquete. She is happy with what she has found.
“We’re here for the rest of our lives,” she said.
The cost of living in Boquete is affordable, especially for someone on a fixed income. If the house and car are paid for, Ross said, one can live “like a king” on a $2,000-a-month income.
This is a place where meals at Panamanian restaurants go for $2.50, and the minimum wage is less than a dollar.
Land, however, is no longer as cheap as it was five years ago.
Kent and Judy Thie, from the U.S. state of Oregon, are selling the house they built in Boquete, having found a place they describe as Boquete “15 years ago” about an hour from Panama City.
The asking price for their 3,200-squarefoot home in Boquete? $400,000.
Roy Knight, a retired businessman from England who got bored and is now building condominiums, said years ago land was cheap, maybe $15 per square meter, but now prices around Boquete can go as high as $65 per square meter.
Still, one of the selling points is the cheap cost of labor, which Knight estimated at onefourth the price in the United States.
Taliaferro expects growth in Boquete to continue, but at a more gradual pace. He estimates that at least $700 million in foreign investment is coming into the region, based on the seven large-scale projects like his own Valle Escondido that are under construction or being planned.
At the current pace, he expects 200 new homes to be built at his development every year for the next 12 years.
Taliaferro said the current bust in the U.S. housing market worries him, but not so much; he’ll switch his focus to retirees with money, and no longer on those seeking more affordable retirement in a country with a lower cost of living.
He wants to attract retirees who can spare $600,000 for a house, or $300,000 for a condo, not to mention the $2 million mansions also available.
A self-described capitalist, Taliaferro wants to create a sustainable economy in Boquete, not just a temporary boost from construction.
Asked if he worries about a backlash to the immigration of North Americans and Europeans, Taliaferro said he did, enough to launch marketing campaigns featuring success stories.
That might be a hard sell.
Rosa María Miranda, who works at an area restaurant, said everything is getting expensive, and people from nearby cities, not boqueteños, are filling the jobs brought by the boom.
“Not long ago (construction) union guys were protesting,” Miranda said. “We never saw that before here.”
There have also been complaints, she said, of expatriates trying to keep boqueteños from having their annual fair.
“They have to adapt to us,” Mayor Ruiz said. “Not the other way around.”