Real Estate Market Begins Cautious Rebound; Agents Express Guarded Optimism
It might be a tad premature for the Costa Rican real estate market to proclaim loudly, “We’re back, baby!” But after nearly two years of local and worldwide economic recession, a number of factors finally give the industry a glimpse of some light at the end of the tunnel.
Yet real estate representatives who spoke with The Tico Times echo the careful words of Julie Foudre of Tropical Dreams Real Estate (www.tropicaldreamsrealestate.com, 2755-0631) in Cahuita, on the southern Caribbean coast: “It’s still a little soon to tell.” Foudre is encouraged by the fact that a lot more people are looking this year than last year at this time.
“There’s a lot more buyer activity,” Linda Gray, president of Coldwell Banker in Costa Rica (www.coldwellbankercr.com, 2670-0805), agrees, explaining she has received 40 percent more inquiries this year.
“Getting them to sign a contract is the next step,” she quickly adds.
That step hinges on a sometimes stubborn gap between buyers’ and sellers’ expectations, suggests Manuel Pinto of Caribe Sur Real Estate (www.caribesur-realestate.com, 2750-0308) in Playa Chiquita, near Puerto Viejo on the southern Caribbean coast.
“Lots of buyers are looking for the deal of the century,” Pinto explains. “Lots of sellers are looking for the killing of the century.”
Pinto says buyers can afford to be aggressive with present conditions. The sellers’market and the anything-goes price tags that existed in Costa Rica for years are no more, and if prices aren’t in the buyer’s ballpark, they won’t touch the property. A $100,000 home gets a lot more nibbles than a $300,000 one, he says.
“A few price reductions have occurred as people have had to get rid of their second vacation home here,” explains Tom Ghormley of Century 21 Jacó Beach Realty (www.c21jaco.com, 2643-3356) in the Central Pacific beach community of the same name.
But, by and large, prices have remained constant here, with sellers still thinking in the same mind-set they had five years ago.
“The buyer is buying on logic these days; the seller has to sell on logic too,” Pinto says, adding that providing value can be the key to the property owner making a sale.
Gray suggests that the areas of the country poised to make the quickest recovery are those that offer value in terms of existing infrastructure.
The presence of DanielOduberInternationalAirport in Liberia bodes well for living in the northwestern province of Guanacaste, as does the growing number of amenities such as supermarkets, which make day-today life more comfortable, Gray explains.
The now near-universal availability of high-speed Internet around the country is also a value improvement that makes foreign buyers more willing to look at properties in Costa Rica, Pinto says.
Of course, the country is abuzz over this year’s centerpiece of new infrastructure, the new San José-Caldera highway. It puts the central Pacific coast just over an hour from the capital.
“It’s been all about the new highway for us,” says Ghormley of Jacó and his sector of the coast. “It’s finally a reality.”
Ghormley says his agency has seen a flurry of visits and inquiries since the Jan. 27 opening of the 77-kilometer toll highway.
“Six months ago, the standard response we got from potential clients was ‘Maybe we’ll see you next year,’” Ghormley says. “Many are still ‘just looking,’ but it seems more definite now.”
Sellers in the Central Pacific have generally kept their prices constant, Ghormley says. A few have even raised prices slightly in anticipation of the new highway opening.
It’s not simply a matter of waiting for new infrastructure to come into being in order to add value to a property sale, suggests Pinto. (The new Pacific highway was on the drawing board for over three decades, and many assumed it would never come to pass.)
“More and more foreign buyers come to Costa Rica and look for financing,” Pinto explains. “A seller who can provide that service stands a better chance of making a sale.”
The strength of non-U.S. currencies has provided a bright spot for the market here, as citizens from those countries take a serious look at Costa Rican real estate.
“Canada wasn’t hit by the crazy subprime financing that caused the collapse of the market in the United States,” Ghormley explains.
He adds that Jacó, with an already strong Canadian community, is a natural destination for potential Canadian clients, but agencies around the country report an increase in inquiries from Canadian and European buyers.
The real estate market is closely tied to tourism and weather too, Gray explains.
“There’s always an increase in interest and activity during the high season,” Gray says, relieved that the lackluster 2009 is over. “There’s more certainty about the economy too.”
Whether or not that translates into a renewed “high season” for Costa Rican real estate remains to be seen.
“Real estate always comes back,” Gray says.
She likens the market here to that famous scene halfway through the film “Gone with the Wind”: Heroine Scarlett O’Hara has hit rock bottom, but she picks up a clump of dirt and declares, “As God is my witness, I will never go hungry again.”
“She lost everything, but she still has Tara,” Gray explains, referring to O’Hara’s family home, arguably filmdom’s most famous piece of real estate.
“It’s still a good investment,” Gray says.