Soaring shells of concrete buildings and bobbing cranes are telltale signs that construction is booming from San José province west to the PacificCoast.
But what remains uncertain is how many of the shiny new condos and housing complexes have buyers.
Government representatives and real estate brokers repeat a common refrain: There is no required reporting system for home sales in Costa Rica.
“It’s still very much in the Wild West stage here,” said Thomas Ghormley, owner and broker at Century 21-Jacó.
Technically, whenever a property exchanges hands, a deed must be signed by the buyer and seller and the transaction recorded at the National Registry. The government body keeps track of land transfers, but not of individual home and condo sales, according to a government representative.
For proprietary reasons, real estate brokers are also reluctant to release information regarding the number of homes or condos their offices have sold over time.
Brokers say, anecdotally, that the housing market is holding steady. Santa Ana, Escazú and Alajuela are hot spots within the Central Valley, while Pacific beach towns in the Guanacaste and Puntarenas provinces continue to find buyers for new condo and gated-community complexes.
Fewer people are looking in downtown San José due to the high cost of scarce land and rising crime rates, brokers say.
“We’ve noticed that the market is moving well,” said Emilia Piza, who manages a real estate office in the Central Valley. “If the price is fair … there’s no reason (a house or condo) will stay on the market.” Piza listed three communities in the Central Valley – Curridabat, Tres Ríos, Escazú – and the entire Guanacaste province as suffering from a “housing scarcity.” The construction boom in those areas, she explained, caters less to local professionals and laborers.
Don Powell, a RE/MAX sales agent based in Tamarindo in the northwestern province of Guanacaste, said sales have been picking up since the beginning of the year. In the first 10 days of June, his office sold three condos.
“We’re not complaining here at all,” Powell said.
Meanwhile, Ghormley in Jacó said two-thirds of closed deals out of his office involve condos. He estimated they are selling four to six units or homes a month.
But sales are nothing compared to earlier boom business, before the credit crunch and recession in the United States.
“Three years ago, (potential buyers) had to take numbers,” Ghormley said. Now, he joked, his two salesmen play cards to fill their downtime.
Construction Booming in Central Valley, PacificCoast
Construction grew by 20 percent in 2007, with 1.2 million more square meters popping up countrywide, according to the Costa Rican Construction Chamber.
Most construction permits were taken out in the San José province (24 percent) last year, with housing construction accounting for 67 percent of growth.
Guanacaste and Puntarenas, the two provinces bordering the Pacific coast, follow the Central Valley in expansion as more companies develop remaining pieces of beachfront property.
First quarter numbers for 2008 show the trend continuing. From January to March, the chamber reported that construction grew by 9 percent nationwide over the same period last year. Most construction was in the commercial sector.
Meanwhile, construction costs rose 6 percent in the first quarter this year. At that rate, according to the chamber, prices could increase as much as 18 to 19 percent by year’s end.
Canadians Save the Day
Forget U.S. baby boomers. New buyers are in town: Canadians.
Several real estate brokers with offices along the PacificCoast – prime beachfront property – said Canadians increasingly are replacing U.S. buyers.
“(The real estate market) flattened out in, like, October last year and then … all of a sudden, the Canadians came back into the market,” said Don Powell, a RE/MAX sales agent in Tamarindo.
Fewer U.S. buyers, spooked by the looming recession and credit crunch, are gobbling up beachfront property. The U.S. dollar also has not fared well against other currencies, including the Canadian dollar.
An ERA real estate representative in Guanacaste said their customers used to be an even mix of U.S. and Canadian buyers. Now, Canadians head the pack.