December 10, 2009 - The big question is what is happening with the current Costa Rica real estate market?
What happened to the buyers? Why haven't some seller reduced their priciest real estate property? What is needed to sell my property?
Answers will vary as much as each region it comes from.
Guess what? Buyers are now out and looking for opportunities everywhere. It may take a month or two for offers and closings to reflect
their interest and some of their initial offers are a bit low but they are a sincere lot.
Yes some are fishing (as in bottom feeders) looking for unusual values of distressed situations For these, the problem is that in the Costa
Rica Central Valley there are not many overbuilt and undersold developments willing to offer large discounts.
No more than the usual amount of distressed properties are being offered There prices come down about in times of financial crisis due to
divorce, illness or loss of job , Also the seller is blessed with demand for good long term rentals. Investors should note that most of the
long term rentals in the central valley may make a better return than the touted beach front rentals that may only rent for a few weeks a year
and may have high rental commissions and maintenance costs.
There is a great need for affordable single level housing that targets not the baby boomers with deep pockets but for retirees with average
retirement incomes. This group would like to buy something for under $200,000 that would be no more than 20 minutes to medical, major shopping
A development that could facilitate some phases of assisted living for the buyers later years may be set for a pleasant surprise.
There has never been a better time for real estate opportunities in the central valley. One of the best year round climates in the world makes the central valley most desirable for retires.
Costa Rica like every other place in the world is coping with increased violence. This has made the issue of security one of the most important for buyers so complexes that offer good security are much easier to market.
The big opportunities to buy at a large discount are on the Gold Coast the Central Pacific and North Pacific regions. There developers have been forced to sell units for up to 50% less than their original asking price.
These at first may seem to be great opportunities but should be approached with caution. Many were priced at the time when properties were selling for twice their value. Buyers can end up with a great value only to find
their building or surrounding developments not being completed and destined to condemnation.
Economic factors that exist worldwide have not bypassed Costa Rica. Lack of liquidity in the financial institutions has reduced new construction in some areas up to 80%. While a certain hardship for many developers it is
dramatically reducing the cost of construction materials. Now smaller developers are finding labor available and m materials affordable, creating new opportunities. If you have financing for a new project now is the time
to start, it will never get better. Also banks are beginning to look a new round of lending.
Basically the real estate market in Costa Rica is now more reality based, overpriced properties, presale deals that require big deposits, telemarketing of ocean view lots are a thing of the past. There will be fewer buyers
from the United States that can speculate and take risks. Many have seen their property values being reduced from 30% to 40%. For now the market is back to the basics. We are now dealing with fewer buyers who are cautious, taking longer to make decisions and have less money to spend.
Leo Hoeffner is a veteran real estate guru in Costa Rica and has been living in Costa Rica longer then he can remember. He has over 10 years of experience in the Costa Rican Real estate business and can be contacted at email@example.com