Costa Rica History in knife metaphorI’d say that about 1/10th of my time spent with people looking to buy property in Costa Rica’s Southern Pacific zone is spent in the actual buying/selling of property. The other 9/10ths is a mix of conversations regarding what’s involved with living here, as well as discussing the business of real estate in Costa Rica.

At its core, the lack of an actual MLS (Multiple Listing Service) colors all aspects of the business here, and I’ll go into that later on in this series. To really understand the business of real estate here, I have found it helpful to go back in time and see the progression of events up to the present. This helps to not only understand the current market but also, to project what is to come.

Early days:
I got into real estate in Dominical in 2004. It felt like the day I got into real estate was the day that someone threw the on-off switch on the market. Since then I’ve heard some tales indicating that the market was already simmering and poised to boil.

I made a sale on my first day in the business. A $60,000 gorgeous ocean view property sized at around 2 acres.  The property featured Uvita’s Whales Tail front and center. That property has gone on to have a lovely home, guest house and pool built on it. It has been re-sold and enjoys a stellar vacation rental history (link to rental page on HomeAway)

Quick overview of The Zone:
The Zone is made up of a string of 3 towns with Dominical at its northern end. The northern boundary is not a hard line but is decidedly fuzzy, easily extending up to Hatillo and at times, up to Portalon. (link to Hills of Portalon Development).

From Dominical heading south on the coastal highway you get to Uvita and then further south, to Ojochal. The area between Dominical and Uvita has a nicely laid out mountain range that runs very parallel to the ocean. Hence the handle “coastal mountain range” This means that you can travel inland from the beach just a short way and get to elevation where it is breezy and cool and offers expansive views of the ocean and coastline, attributes which make this area extremely desirable to investors, relocators and migrators (part-of-the-year residents).

More History:
Before the incoming press of foreign interest in The Zone, the Ticos (Costa Ricans) owned all the land, and their land holdings were always in the multi-hectares (1 hectare = 2.48 acres. Think 2.5 to make it easy).

There was a time in the not too distant past when land in Costa Rica was nearly value-less. There were land-grant programs whereby a man simply had to be willing to take responsibility for a property and the government would “grant” him the land, with conditions.

At that time it was not known that “nature” had a lucrative aspect to it. Instead nature was largely viewed as “in the way” and needed to be tamed, subdued or eliminated. So, one of the conditions to receiving a land grant was to cut the trees down and raise cattle.

I suspect that this era may have coincided with the “McDonalds” explosion. This is an arguable point, so let’s just say it coincided with an extreme demand in the U. S. (and world) for beef.

After some time of cutting down enormous canopy trees and attempting to raise cattle in former rain-forest environs, there was a shift in our world’s appetites; nature became an important commodity. Granted, beef has continued to be an active commodity, but it was also learned that former rain forest land doesn’t necessarily make for the best pasture land.

Raising cattle in Costa Rica was a daunting struggle. The farmers found themselves up against nature. Having to maintain former rain forest jungle land in “pasture” condition presented its trials, as well as the fact that the beef business (exporting meat, bureaucratic inefficiencies, and 3rd world infrastructure or lack thereof) made a guy scratch his head and wonder if having all this land was such a good idea.

The Tico culture was/is multi-generational. These large, granted tracts of land, would end up being populated by the man who acquired the land, his now grown sons & daughters and their families, and the grand kids (soon to also have families.)

So despite having lots of land, a condition that in first-world countries equates to being wealthy, these farmers were subsistence. They lived off of what their land produced. As a child would grow to adulthood, Abuelo (abuelo = grandfather) would simply build them a house and apportion off some land (or not) and they would continue on contributing to the sustenance of the family. The land itself was not thought of in lucrative terms.

Abuelo just happened to acquire a land grant on, let’s say, 60 hectares of land that reaches from the inland side of the maritime zone on the coast up to the highest point of the coastal mountain ridge. He’s not thinking “oh boy! I’ve got some ocean view land here.” No, he’s thinking: “man I hope this land is fertile.”

Enter foreigner:
One day Bob, a tourist, is exploring the area and decides that he’d like to buy Abuelo’s property. Bob offers Abuelo $60,000 for the land. Abuelo has never even considered the remote possibility of maybe someday having such a sum. In fact, he’s never even seen that much money. He talks it over with his family and they (very understandably) feel that this would be a wonderful thing for them to do. So, they sell their land.

Bos is a visionary. He sees what is likely coming and so he stakes his early claim. Now, keep in mind that there is no electricity to this property, the access is horseback and the water is from a nearby spring that is bubbling out of the ground. Abuelo has run a pipe from the spring to an elevated storage tank near the family homes. Bob’s a visionary in that – what foreigner in their right mind would possibly want such a remote and forbidding piece of land?

To understand this is to understand the element that is credited with making the world go round. We all have different likes and dislikes. I wonder at the likes of Steve Jobs, Bill Gates and Paul Allen’s level of focus on the personal home computing idea at the time that they had that focus. I’m not of this ilk and so my hat is off to such ones. I view the early investors here in The Zone as being made of the same stuff.

In looking back over the history of the first wave of investors here, I marvel at their foresight. My then wife and I looked at some Whales Tail view property in Uvita around 2002 and, despite its being gorgeous and nicely priced, I felt that it was simply too remote. This was in the same area where 2 years later I sold my first property.

Ok, so I said that to understand the real estate market here in Costa Rica, it helps one to know a bit of the history. Granted, we’ve gone back to what I call the first-wave of intrepid and visionary investors – the Mavericks. We’ll continue on in the next article with Bob’s next steps and incredible gains on his visionary act.

Costa Rica Season Change

We truly do live in a different country here in Costa Rica. I know – this sounds a bit obvious. But sometimes the place can seem just like another “state”. We can forget, when our focus is on the price of land, how to build a house, residency, how to open a bank account or any number of other tasks, the mundanity of which can cause one to forget – “hey, I’m doing stuff in a foreign land”.


One example from the Heliconia family

I LOVE talking with the old-time Ticos (Costa Ricans) about earth matters.  My buddy Chan has his gardener, Gilbert of many years.  Gilbert knows everything about the earth.  Trees, plants and heliconias in particular. If you are in doubt as to what a heliconia is, the Bird of Paradise is one of the best known of that particular family.  It is one VERY exotic family of tropical flowers.

Gilbert has a small business of cultivating heliconias.  When he has some new plants he can be seen at the Saturday morning Farmer’s Market in Uvita selling his varieties for something like $10.00 apiece.

I had the opportunity to walk in the jungle with Gilbert one time.  What an experience! (By the way, Gilbert is in his sixties and I’ll bet he don’t read so good.) I am truly enamoured with the flora and fauna of Costa Rica.  To have the opportunity to talk with, walk with, and in general, spend time with a man such as Gilbert out in the jungle, was for me a wonderful thing.

When you are in a different land, there aren’t just different versions of plant and animal names, there is an entire other language that pertains to trees and plants. A dictionary doesn’t help.

On this day, Gilbert detected that he had a listening ear and so off he went – describing all the trees and plants and insects of the jungle. He reaches out with his machete and taps the bark of a rather large tree while saying it’s name – well, what the earthy Ticos call it.  Then, where he tapped it there comes a drip of blood red.  He wanted to show me how the sap of this particular tree looked exactly like blood.

Another one oozed a milky substance.  Gilbert lapped up the milky substance with his finger and licked it, relishing the apparent good taste, but I think that there was some sentimentality at play here. Gilbert told me that in the old days, when he and his buds would work in the jungle, they would bring or make coffee on break. They didn’t have to bring cream, thanks to this tree.

We have just passed through a very hot dry season here in Uvita – well, Costa Rica in general. What is it being called now? Global warming? Climate change? I’m sure there is a politically correct expression for what the weather is doing – everywhere. (I find it interesting the we humans can’t agree on what the weather is doing.)

Interesting how here in Costa Rica the warmer weather has resulted in more rain. I was talking with my neighbor the other day. He is of the same ilk as Gilbert.  He said this is the first actual “summer” we’ve had in 5 years. My memory says that this is very close to correct.  All of us “foreigners” living here in Costa Rica have been complaining up a storm about the heat.

Well, it all changed a few days ago.  There is a palpable feeling of “AHHHHHHH!” amongst everyone. The skies cloud up, and it rains, lightly for the moment, and the ground drinks it up, and the air is cooler – ahhhhhhh!

I don’t really understand why the “dry season” is the “on” season from Costa Rica.  For most of the expats living here (is that redundant?), the rainy season is the better time to be here. I wonder if it is going to end up being like my experience in Aspen Colorado.  When I moved there in ’79, there was only one season: the ski season.  Then, little by little, the world discovered the amazing summer season in Aspen and I think that the summer went on to either equal, or surpass, the winter.

I am seeing word start to seep out that rainy season here in Costa Rica’s southern pacific zone, is really quite delightful, and in some cases, is to be preferred over dry season.

Returning to plants and earthy Ticos.

My Abuelo (adopted grandfather) in San Isidro was truly made up of Earth. He knew it like the back of his hand. He is in his 80’s now and is unable to work.  I think that this will eventually get the best of him. He said that the earth needs to get warm and that when it unseasonably rains during dry season, it messes things up because the earth cools down.

Interesting perspective.  I think more about the water falling from the sky and he is thinking about the temperature of the ground.  In time, it turns out, I find out that the jungle flora benefits from stress. That the trees and heliconias and fruits are all much more productive when they have been given a good stress by dry season, the stress of being dry and warm.

Stress is a good thing? Well, it appears that when it comes to plants, perhaps so. One very knowledgeable long time expat tells me that if you have an orange tree, or a avocado tree, or some fruit tree, and it is not bearing fruit, to give it some good whacks with a baseball bat. It will then start to produce fruit.

So, we have weathered the first true “summer” in 5 years. We are now heading into one of me favorite times of the year, when our world tuns back to its verdant, saturated green, the streams and waterfalls all get fuller, and the temperature is… well… perfect, 24 hours a day, in typical Costa Rica fashion.