Early arrivers to Costa Rica buying land.In Part 1 we considered the early foreign investors in real estate here in Costa Rica’s southern Pacific zone.  The idea being that in so doing, we’ll have have a better understanding of the real estate market here. We continue now with Bob (early visionary investor) as he proceeds to segregate and sell his large parcel (finca).

Bob’s vision for what is to come is so clear (to him) that he recognizes that he essentially stole the gorgeous ocean view property that he now possesses. The plan is to sub-divide the large property (finca) into smaller parcels and sell them at a considerable profit.

He takes his 60 hectare (150 acre) finca and segregates off 5 hectares and puts this on the market at $60,000, the price that he paid originally for the entire finca, leaving 55 hectares as a pure profit proposal.

Now granted, I’m fabricating the name and the transaction. But this I do as a composite of various such transactions that I was aware of at that time. What I experienced when I got into the real estate business here in 2004 were the ripple effects of not just one deal like Bob’s, but the after-effects of many such deals.

There is some historical precedent to the investor phenomenon that transpired at that time. Well known examples are: the dissension regarding Alexander Graham Bell being the actual originator of the telephone. Elisha Gray applied for the patent on similar voice technology, essentially on the same day as Bell. Alfred Wallace and Charles Darwin both – independent from each other – came up with the theory of evolution at the same time. It was essentially the luck of the draw that Darwin is credited as the author. And to look at the advent of American Contemporary art in the New York art scene with Jasper Johns, Andy Warhol, Rauschenberg, Roy Lichtenstein and on, is to see one of the strangest examples of unrelated, converging visionaries.

I wonder at this “phenomenon”. It is recurring in human history. Unrelated individuals and groups, all at roughly the same time, turn their attention to something. It’s almost like some cosmic force directing select ones to go and do a thing. Ok, not to belabor this point, but I find it fascinating. I mean, I could understand one guy. And then maybe that guy talks to someone else about what he’s doing and they think it sounds good and so they do it also. But unrelated, concurrent action??  Por favor! 

Well, barring an un-quantifiable cosmic event from our understanding, I can only suggest that this is simply the way of the world. “Progress” of civilizations. The time had come for this gorgeous country to be discovered and exploited for what it had to offer – its riches. And, as it turns out, there were plenty of buyers.

There were several Bob-like visionary investors who converged at roughly the same time in the early days of real estate here in Costa Rica’s southern Pacific zone. These all went on to see enormous returns (turning $1.00 USD into $120.00+-) on their relatively paltry investments. A couple of the best known Dominical-centric examples of these investments are the areas of Lagunas and Escaleras and to a lesser degree, Hatillo. 

We are now getting to the time when I began work in Costa Rica real estate. These were the conditions of the market at that time. The majority of real estate sales at that time were of raw land, and this was despite the majority of buyer’s initial request was for an existing home. There simply weren’t many to pick from. The inventory was primarily raw land. After looking at the available options for existing houses they would go to the default position of buying land and either building, or holding the land for a future purpose. 

The houses at that time were difficult to sell, despite the common preference of the buyers to purchase a house. Those early arrivers to the area were somewhat unique. I like to say that we were all a bit “out of round”. We had decided to move from our homeland to an area of the earth that was certainly not the most accommodating of environs. What houses there were, were frequently expressions of that individuality that brought them here in the first place. These were not homes for the general market. Some were lovely in their uniqueness while other were, quite frankly, atrocious. 

What I came to call the “Costa Rica Formula” for buying land had a couple of iterations. The visionaries were the big winners of the formula, but those that bought from them were also beneficiaries of having been early arrivers on the scene. The formula was to buy one of the available segregations from a Visionary. Despite having been segregated from the mother farm, these properties were generally still quite large by today’s standards, commonly consisting of multiple hectares (1 ha = 2.48 acres). To then cut off a marketable piece of that parcel and sell it, effectively reducing or eliminating the initial investment principle. Buyers at that time could almost all count on this being an option.

In 2004, some of the Visionary’s pieces  were available, as well as the lots being made available from those that they had sold to.  And there was quite a lot of work being done to bring more to market. These were the days prior to the big crash of 2007/8. The reason for the crash fed the formula, and the market spiked. We were in a boom.  The sub-prime market made for an unreal and absolutely illogical availability of money to homeowners in the U.S. This was the market I started working in at that time.

My thought is that the spike in demand, and the subsequent prices, is one of the many ripple effects from the sub-prime lending mortgages thing that resulted in the demise of the global economy in 2007.  Not to belabor the point, but I think that it’s important to understand this as, here we are some 10 years later, and the effects of the “spike / crash” on the market are still very present. I’ll get to this more in a following article on present day conditions.

 


The Most Precious Real Estate 4


I want to tell you the ocean knows this,         Yo os quiero decir que esto lo sabe el mar,
that life in its jewel boxes                                  que la vida en sus arcas
is endless as the sand                                      es ancha como la arena

As a teenager, I was as inspired by the poetry of Pablo Neruda. So much so, I decided to study English and wrote extensively during my college years in San Luis Obispo, California. I had the good fortune to rent a house on the beach with two friends, who were brothers. The younger brother would frequently bellow, “Thar she blows!” when he spotted a whale’s spout. His brother and I would always drop our books and run to glimpse one of Nature’s great spectacles.

Isla Ballena in the Parque Nacional Marino Ballena

Perhaps fueled by this touch of nostalgia and the fact that I spend almost everyday at the beaches in and around Uvita, I wanted to highlight some of the most precious real estate in Costa Rica— Parque Nacional Marino Ballena.

Parque Nacional Marino Ballena

Created in 1989, the Marino Ballena National Park was the first national marine park in Costa Rica.  It was created to protect the marine ecosystems associated with the beaches, mangroves, islands and a fragile coral reef that turns out to be the largest on the Pacific Coast of Central America.  The park itself stretches from the southern end of Playa Hermosa to the northern end of Playa Piñuela, and a triangular area reaching 9 miles out into the Pacific Ocean.  That triangle also includes the famous Uvita Whale’s Tail, Tres Hermanas (The Three Sisters) and Isla Ballena.  In addition to enhancing ocean view of property in the area, these landmarks are home to thousands of aquatic and terrestrial species.

Whale breaching in the Pacific.

“Ballena” means whale in Spanish.  That’s right… this area is visited every year, primarily between the months of November to early March, by southern and northern hemisphere female humpback whales.  They arrive to give birth and nurture their 14-foot?!! newborn calves in the warm, calm waters of Costa Rica.  Although there are daily whale sightings in the peak season, this majestic mammal is still on the endangered species list.  If you haven’t seen one up close, you might want to consider putting a whale-watching tour out of Uvita on your Bucket List.

Even if you aren’t into the idea of being on a boat in the open ocean, you can still enjoy the experience from land.  I vividly recall one morning at La Parcela (which used to be my favorite spot for breakfast until they stopped serving it!) when my parents were visiting.  We were enjoying our gallo pinto and eggs when a dark blue whale suddenly breached in the middle of the bay.  Over the next half hour, it continued to rise out of the water, twist, and crash down on its side at least 20 times.  It’s safe to say, this was the most memorable breakfast my parents and I have ever shared together.

Return Of The Ridley

The humpback whale is just one of many creatures inhabiting the marine park.  Sea turtles are another ancient animal that return to nest on these specific beaches every year.  Thanks to conservation efforts, Olive Ridley numbers are actually rising in the southern Pacific.  You can see them while snorkeling around the Whale’s Tail or one of the aforementioned islands.  But, let me tell you… if you haven’t seen a baby sea turtle dig out of its sandy nest and instinctively scratch its way to the water, you’re missing out on a truly wondrous experience.

Without question, the great outdoors, including the multiplicity of marine life found in Parque Nacional Marino Ballena, is at the center of this amazing life in The Zone.  It is one of the primary reasons tourists visit and why many of those tourists eventually invest in real estate and/or relocate in this part of Costa Rica.  The immediacy of wildlife in the southern Pacific zone, like a 50-foot whale breaching during breakfast, adds value beyond measure.


About Tigre

My first visit to Costa Rica was in 2002. I immediately fell in love with the warmth of the climate and people. After spending two weeks in San Jose, Puerto Viejo on the Caribbean side, and Tamarindo in Guanacaste, I knew there was a good chance I would return sooner than later. Sooner came just 6 months later when my uncle mentioned he was flying down to Costa Rica to close on a piece of property in the Southern Pacific Zone. On that trip I found my own piece of paradise above the small town of San Buenaventura, home to the San Buenas Golf Resort. Two years and 8 trips later, I decided to move to Costa Rica full time. Every day I am thankful for that decision.


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