Costa Rica Real Estate

This gorgeous natural swimming hole sits below one of the nicer homes in Uvita.

It’s one of the most popular questions we, the Guys In The Zone, field— “What’s been selling? We get this question from both buyers and sellers.  Generally speaking, the answer is— great deals.

PRICE

Price is the #1 determining factor for a great deal, but there is another factor that is equally important— the living experience.  Ben, my business partner in Costa Rica real estate, phrases it this way, “do any unique features of the property significantly affect the quality of the living experience?”

There are very few remaining places on the planet where things are (1) inexpensive and (2) incredible.  During the boom years of 2004-2008, Costa Rica real estate was inexpensive and incredible.  Large farms were purchased $1.00/meter squared and nice ocean view lots were under $100,000.

Three years after the peak of 2008, property values across the border came down between 40-50%.  Many houses are now selling for replacement cost or less.  Once again, we have large farms for $1.00/m2.  The obvious reason was the global economic downturn and continual 10:1 ratio of sellers to buyers.  Basic economics tells us that price, or in this case property value, had to come down.  Our listing database is now filled with good properties in every category—houses, land, large parcels and commercial.

THE LIVING EXPERIENCE

For most people, buying real estate in Costa Rica isn’t just about getting a great deal.  You can move to Orlando, Florida if that is your only goal.  It is about the unique features that significantly enrich the living experience.  When Ben and I get a new land or house listing that has an ocean view and a trail to a nearby river… Continue Reading

Have we hit bottom?

In the movie “Back to the Future” we saw an example of how beneficial it would be if we could tell the future. The character Biff Tannen gets his hands on printed results from some race track and other sporting events, before they happened, and went on to achieve phenomenal wealth.

In real world economics, the trick seems to be the ability to identify trends and accurately guess what is going to happen prior to it happening.  Here in Costa Rica, the real estate market is no different.  Discussion and speculation about the future run rampant.  Hints & clues are analyzed in a constant effort to make wise buying (and selling) decisions.

It caught my attention this morning when I received the following in an e-mail from an agent in one of the local real estate agencies. He was writing to update us on a client of ours that we had asked him to help with. Without trying, our associate provides a clue as to what the current state of the market is, and perhaps, where it is going.

*Hello [Guys],

Thank you for giving me the opportunity to assist you with the property interests of the Schmegerworgs (names changed to protect the innocent).

I feel it is of the utmost importance to give your potential buyers the Tico Times of today, Friday, Sept. 10 newspaper that explains in detail the past and current real estate market place that will back up exactly what I mentioned to them about the market picking up right now and that 2009 was a slower year (click here to read the article online). I feel it is important that the wife understands if we show them a property at a price point that makes sense and feels good in their heart, they need to move forward with a purchase as good deals are selling and we cannot always replace a fire sale or “perfect property” that one lets go by.

I truly feel our BOTTOM market has passed us and current activity with all us of can only prove that.

Whether we sell them something together or if you sell direct, that is all fine with me as I feel there is much business for all of us survivors right now.

Please take care and have a great weekend.

(Its noteworthy that this e-mail is from a “competitor”.  One of the really promising aspects of the real estate industry here in Costa Rica’s southern zone is the amount of cooperation between all the agencies.)

The ability to identify “bottom” is the hallmark of a successful investor.  It is extremely difficult to do, which explains why so many of us speak in terms of “would’a, should’a ,could’a” when talking about our investment history.

So how can we identify the bottom in the market now?

Indicators:

One of the more prominent factors are that there are less Fire Sale properties on the market now than there were before.  All the reports that we are getting from the other real estate agencies in the area are that they are busy.  This is not just under $100,000 ocean view lots.  It seems that the $300,000 home is a hot item now that won’t last long on the market.  There are also a number of larger, more removed parcels, selling.   Some of these have topped the $1,000,000 (USD) mark.  There is a growing interest in “off the grid” and “community-style” living.

We had one of our favorite developers approach us some months ago and indicate that the recession was finally affecting him, and that he really needed to sell some property.  Long story short, since that time he has sold a house and two lots, making him well.

All of the above activity was stimulated by the market ebb & flow.  The market was and is down.  The inherent quality of the properties that are available in Costa Rica’s southern pacific zone is compelling.  The low prices on these properties has caused enough action here to cause us to wonder what all this talk is about a recession – (well, not really, but almost :0)  Savvy buyers are here snapping up the deals.

No one knows what the future holds.  Things are changing on the global scale, some of which is unprecedented, causing insecurity.  We really have no idea what to expect in the future.  There is the unmanageable deficit in the U. S. There is China.  There is talk about the “double dip” recession.  There is global warming and other environmental concerns.

So have we seen the bottom?

Hard to say.  However, if you were a fly on the wall of the Guys In The Zone office (or any other real estate office in the zone), you’d hear conversations that would make it seem so.  We’ve had a number of folks come through during the down time that have found what they were looking for, but then felt that they had time to decide, to “think about it”. Or perhaps they think that prices will even come down a bit more.  Our feeling is that the time to buy has been here now for some time, and may well be passing.

What we do know is that we haven’t seen prices this low and on such a great selection for some years.  So, whether “bottom” is behind us, or lies yet ahead, we’re pretty confident that now is a decent time to buy a piece of property in Costa Rica.

Shameless Plug: Click here for all Guys In The Zone real estate listings

* Keith Schenkel of Costa Rica Real Estate Services

A longtime associate in Costa Rica real estate stopped by our office after being out of the country for an extended period.  One of his first questions was, “So, what’s going on with the international airport?”  My response was, “What airport?”  He found that amusing considering the broker he just spoke to was talking it up like the asphalt trucks were lined up and ready to pour the tarmac.  We both had a good laugh.

I’m not saying major infrastructure projects aren’t being completed here in Costa Rica.  There have been many projects completed in the past two years—

• San Jose-Caldera Highway
• Quepos-Dominical Highway (affectionately known as, “The Dirt Road”)
• Re-paving of the Dominical-San Isidro Highway
• The Bridge at San Buenaventura
• The Bridge at La Cusinga (almost)

From that list it is easy to see the progress and the progression.  What I mean by “progression” is the land routes need to be completed first before an international airport is built in The Zone.

International Airport In Paradise?

Rumors to Reality

The list of rumors regarding the southern zone Airport is long and varied— operational for international flights by 2010, moving to a new site in Sierpe, moving south closer to the border in a joint venture with the Panamanian Government… to name a few.  The reason I am sharing this news story released by La Nacion a few days ago and forwarded by a reputable broker in the area is it actually sounds like the government has a (more) realistic plan.

In summary, Costa Rica’s third international airport will be located in the same exact spot currently occupied by the Palmar Regional Airport.  To comply with Aviacion Civil (the FAA of Costa Rica) standards, the runway will be extended 400 meters and facilities for immigration, customs, and security will be constructed.  The “facilities” will include extra hangers, buildings, and even a terminal that will provide hangers and services for commercial shipments.  The price tag on this project is quoted at $25 million dollars, half the proposed cost of the mega-terminal in a new location.  They did not release a projected completion date, but I would be shocked if it was ready in two years.

One of the most interesting points in the announcement is the Minister of Tourism’s call for more hotels to be built in the area.  It is a similar point echoed by the longtime mayor of the Osa Canton, Alberto Cole.  It’s safe to say, major hotel projects are going to get the green light, moving forward.  One of the more interesting things to me is exactly how they are going to accomplish this with no Plan Regulador (e.g., zoning plan) for the area?  Where are these new hotel-resorts going to be located?

What Does It All Mean?

It means that at some point in the future there will be international flights landing in Palmar.  It means there will be more hotels, and the beaches will be alive with activity.  It also means there will be many, many more investors buying in the area.  People look at me funny when I say this area is poised for another b-o-o-m, but all of the regional signs—improved access from every direction and significantly lower property prices— point that way.

It means property in areas like Tres Rios and San Buenaventura, once thought of as “too far south of Dominical” will be a 15-minute taxi ride from the terminal.  Check out Tres Rios Estate and Tres Sandalo 17 as examples.  We only have a few listings in Palmar (see photo left), but I guarantee that number will double before the high season.

Most of the expats in The Zone have adopted the “I’ll believe it when I see it” philosophy.  We have also been surprised by the recent completion rate of infrastructure projects.  Safe to say, the completion of the 3rd International Airport in Palmar will be the crown jewel for the region.  If you are interested in buying Costa Rica real estate, this recent news bodes well for smart investors.

Answer: 98%.  The Question… what percentage of people first visit Costa Rica as tourists before buying their own piece of paradise?

Uvita's Whale's Tail formation taken from Escaleras.

Costa Rica is attractive as a vacation spot, for retirement and investment, especially in this “buyer’s market.”  In particular, the Southern Pacific Zone (and I’m talking about the area south from Quepos to Palmar) has a number a factors that set it apart from the rest of Costa Rica—the mountains-to-the-sea geography, sunset ocean views, the verdant jungles, and the protected habitats.  In addition, up and down this coastal region, resident Ticos and foreigners from all parts of the world enjoy a “small town” community feel.

For those who haven’t been down to The Zone (as we like to call it), there are small differences between the small towns in this area–

• DOMINICAL–  Many of the visitors who choose Dominical as a home base are surfers or other people who want to be within walking distance to the beach.
• UVITA–  Those who choose Uvita have either already explored Dominical or want to be close to the famous Whale’s Tail and boat launch for whale and dolphin tours, snorkeling and scuba diving adventures.  Simply put, the magical nature of these activities brings people back, year after year, in increasing numbers.
• OJOCHAL–  Located 15 minutes south of Uvita, Ojochal is one of the more established expat communities.  Originally, the coastal road only came as far north as Ojochal, hence the pre-Costanera wave of development starting in the late 90′s.  It is known as the multi-cultural hub of The Zone and home to an amazing array of culinary options.

The Zone has received a flood of publicity over the past four to five years.  Heralded as one of the world’s eco-tourism hot spots, most tourists come to our area excited by the likelihood of seeing exotic animals up close and personal.  In fact, groups of monkeys and toucans make daily visits to our property and most of the eco-hotels in the region.

Boom Markets

Another reason for the area’s popularity, one we have written about extensively, is access — the completed Coastal Highway, the improved road from San Isidro, and the proposed International Airport in the Palmar/Sierpe area 40 minutes south of Uvita.  According to the Instituto Costarricense de Turismo, tourism is up 9.6 percent for the first half of this year compared with 2009.[1] Perhaps the stimulus package in the U.S. and Europe is working?  (That was a joke.)

We only need to look at the effect of the new international airport in the Guanacaste region—131,295 tourist arrivals in the first half of 2010[2]— to understand why tourists, retirees and investors flocked there.  Thanks to the ardent publicity of television, print, and web advertising (e.g., International Living Magazine), there was a tourism and real estate boom in the first part of this decade.  The first part of 2010 is no different, as activity is up in this buyer’s market.

The Painful 2%

As for the two percent of property buyers left out of the original answer (in fact, they are the group who sparked this article), there are actually foreign investors who buy property sight-unseen.  Just in case you are not familiar with the term, it means buying land without physically seeing what you are buying.  This often happens when prospective buyers attend marketing seminars that pitch only one or two specific developments in an area.  The simple reason for this is… these marketing specialists are often The Developer!   They lure prospective investors to Costa Rica with attractive incentives like “fly and buy” programs, where discounts are applied to immediate land purchases.

There are potential problems with following this developer’s path to your future paradise.  Here’s a common scenario; you finally arrive at the small, regional airport in Costa Rica.  You meet your bilingual feet-on-the-ground sales agent/tour guide/driver.  He explains you have a full and exciting week ahead—dinners, outdoor activities, and multiple tours of the developments— so full and exciting that you never really have time to look around and get an objective view on land values and investment opportunities.

BEWARE… their bottom line is to sell you property in their developments.  I can’t tell you how many “seminar buyers” (most of whom are from Canada?) come to us after the fact and are shocked at the real market value of their land… and this was when the market was still strong.

Ben in the field with a client.

Pure Brokering

There is a simple way to avoid this investment pitfall.  Most of the real estate agencies in the area offer what we “Guys” like to call: pure brokering.  I use the word “pure” to indicate what Ben & I like to do.  I guess you could say, it’s the Guys In The Zone style.  First and foremost on our agenda is: “find you the most ideal property that fits your objectives” – pure brokering.

People ask us daily how the market is doing, and if you’ve been tuning into our Talk Shows for the past couple of years you know the market here has reflected the global market’s trend downward.  Markets go up and down… that’s just a fact of life wherever you are.  Ask any of the real estate companies in the area, activity is up… and this is typically our slow season.  It feels like we have hit the bottom, and this high season (Dec-Feb) is expected to live up to its name.

There are a variety of factors that make The Zone an attractive place to vacation, invest, and eventually retire.  And let me tell you, the only thing better than watching a flock of toucans hopping in the trees… is when you are watching a flock of toucans hopping the trees on your own property.

[2] http://www2.prensalibre.cr/pl/la_economia/28972-ingreso-de-turistas-aumento-un-96-en-primer-semestre-del-ano.html

Talk Show – Episode 7

Talk Show – Episode 7

Pura vida, compadres! With a focus on Costa Rica real estate, Episode 7 features our impressions on topics like–

The Rainy Season
Property Prices
Seller Financing
The NEW Forum

Thanks for watching and following us on Dailymotion, Facebook, Twitter, and our websites– www.GuysInTheZone.com, www.hotcostaricarealestate.com, www.Dominical.biz, and www.Uvita.biz.

What does the future hold for The Zone?

The crystal ball… standard equipment for psychics and investors, alike. Ben and I are constantly observing the trends and then peering into the future of our little Costa Rican real estate market.

The First Wave

Around 1995, the first wave of developers arrived to the area. These early mavericks (let’s call them environmental-preneurs) benefited from a combination of vision and cheap land. Development was easier back then. Buy a big farm and segregate it into smaller farms (or lots). As the news of cheap land and low costs for materials and labor trickled out to the world, there was a 10-12 year rush on land that led to spiking prices for ocean view home sites. At the beginning of 2007, there were no quality ocean view lots left under $100K, at least not any in developments with good infrastructure (roads, water and electricity). Well, it’s now 2010 and we suddenly have many ocean view properties that can be purchased for under $100K. This quick “land in The Zone” recap is an attempt to set the table for the next trend I believe we experience, moving forward—Houses in The Zone.

Ben and I estimate over 60% of the people who inquire about property want to buy a house; however, over 60% of those house hunters end up buying raw land. There is a very obvious lack of supply in this economic equation, and the reason is we are simply at an early stage of the development cycle. According to CFIA (Colegio Federado de Ingenieros y de Arquitectos de Costa Rica), compared to 2007, the province of Puntarenas experienced decrease of -67% in total square meters constructed compared to the January–April of 2008.[1] Safe to say, the global economic downturn effected everyone investing in Costa Rica.

Gorgeous villa in San Buenaventura.

Yet toward the end of 2009 to present, we find ourselves busier than ever! We currently have 40 house listings on the coast (which means not including the mountain towns of Platanillo, Tinamastes, and the regional capital of San Isidro) ranging from $66,000 to $3.2 million. And, it’s no surprise that 90% of home buyers want an ocean view.

For those with construction experience and a desire to build houses in a foreign country, this where there may be money to be made. The crystal ball formula is– buy a cheap ocean view lot, no more than 10 minutes from the Costanera (our paved coastal highway), and build an affordable house with a swimming pool. The main question we anticipate from potential builders’ is “What kind of house do I need to build to guarantee a sale?” Unfortunately, we cannot provide a “guarantee” only guidance based on our personal, feet-on-the-ground perspective.

Price

The $weet $pot in our house market is between $200-250K. There are folks looking for houses on the coast in the $100K range, but they quickly realize those days are over. If you their budget is fixed at $100K, then we show houses up the mountain in towns like Platanillo and Tinamastes. We do have a couple of nice coastal properties with old tico houses on them for under $100K, but most of these are “tear downs” and re-building on these footprints is generally un-advisable.

Floorplan

Swimming pools sell property.

In this $250K price range, one effective floor plan is the 2&2 en suite (e.g., double master), central kitchen and small living area, and a large patio outside to enjoy the view. Most of the living experience in Costa Rica is done outside. Without question, one of the key rental amenities is the swimming pool.

IT doesn’t need to be huge, or have an infinity edge. But, it really helps a sale because it really helps rent-ability. Even thought there is a bathtub-warm ocean with miles of empty, gorgeous beaches just sitting there for people to enjoy, vacationing groups, couples, and especially families, love the pool.

I could offer a few more building suggestions, but I’ll leave those details to those with far more experience in spec building. What I do know is… Ben and I need houses, and I see them in our future. Thanks for reading.

I was standing in the outfield at the Saturday Softball game in Uvita, when the feeling hit me. It was the warm feeling you get (and I’m not referring to the direct sun variety) when you are with a group of people having fun. In a word: community.

We have a special one down here in the Southern Pacific Zone of Costa Rica. Perhaps it is the international mix of ex-pats— Germans, French, Italian, Swiss, Argentinean, Canadian, Mexican, African, Chinese, and the list goes on. A variety of backgrounds and personal stories better than any television series— the crazy Italian chef turned humble bread maker, the ex-radio personality turned successful bar owner, animal activists, people activists, retired couples from Atlanta to Ibiza…. the list is long and varied. It’s diversity meets adventure meets pura vida, and we love it.

For many investors, Costa Rica has been (and continues to be) primarily a smart place to put your money. And, that’s fine; investing is encouraged given the bright future of the country and region. But, for those people considering a permanent (or semi-permanent) move down to Costa Rica, the reasons stretch beyond democracy, economy and sunshine.

Variety evolves culture. This is especially true with the exotic cuisine found in the area; there is even a restaurant named Exotica, and it is excellent. In addition to numerous Tico restaurants, international options include—French fusion, organic Italian, Japanese sushi, Curry Night, and yes even elements of “the western diet” satiate the The Zone’s inhabitants.

In addition to these restaurants dotting the landscape, a staple of any conscious community is the farmer’s market. There are in fact two weekly farmer’s markets in The Zone—Thursday and Friday in the fast-growing city of San Isidro, and the Saturday Farmer’s Market in our sleepy beach town of Uvita. This relatively new farmer’s market offers an increasingly broad array of (mostly) organic produce, baked breads and pastries, homeopathic elixirs, and hand-made gifts. I consider all of these wonderful vendors “artists”, as you only need to grow or create something and share it with others to qualify. In fact, we have more photographers, painters, writers and musicians per capita than any place I’ve ever been. Perhaps it is this artistic quality that blends so nicely with the laid back, friendly nature of the Ticos.

Most of the people living here agree that the economic downturn is no excuse to lose sight of the importance of doing what we love. In fact, it compels us to re-adjust our sights on something uplifting and sustainable. Simply put, Ben and I love helping people invest in property in the Southern Pacific Zone of Costa Rica. We love every aspect of this service—putting deals together, hiking around large farms, chopping tall grasses with machetes, designing new websites…. all of it. In fact, work doesn’t feel like work at all. Experience tells us the recent drop in property prices will soon hit bottom (if it hasn’t already), and another long rise will begin.

This coastal area, as my friends in California like to say, is golden. The reasons are many—low population & construction density, great value, the Coastal Highway is almost paved between Quepos and Dominical, an International Airport in our future, it’s a tropical paradise. And, let’s not forget the original inspiration for this article—community. It’s not something you can put a price on. It’s something you feel.

Especially on days when you observe 20 gringos cheering for a Tico kid who hit his first home run.

Writing a blog about Costa Rica real estate has its perks. We’ve got readers out there who are doing some pretty creative projects and we don’t even know about them… until they get ready to go to market with their project. Such is the case with Sierpe Del Pacifico (SDP). Fred and his son Cassidy approached Rod & I about a month ago to tell us about their project in Sierpe. I think that this type of inquiry wouldn’t normally have much interest to us Guys, but Fred had written such an eloquent and well crafted introductory e-mail that we were intrigued.

Sierpe is a bit out of the way, on the fringe of “The Zone”. I’ve also heard that it is hot and buggy. I’m not much for hot and buggy, but in truth I couldn’t speak from personal experience regarding the place, so I kept an open mind.

What Fred & Cassidy have done is they have formed a father & son team and are passionately developing a piece of property that offers what, I suspect, a lot of readers of this blog are looking for: a truly unplugged, solar powered, bio-digesting, boat access project, surrounded by some of the best fishing, both fresh water, brackish and deep sea, in the… country? World? I don’t know, but you always catch big, tasty fish when you go out with them.
Continue Reading

Click the “Play” button (upper left) to listen to the show.

The newest feature on GuysInTheZone.com, our “Talk Show” is your audio source for news and information about real estate in Costa Rica’s southern Pacific zone. Hosted by Ben and Rod, these conversational shorts can be listened to online (just hit the Play button below) or download them to your iPod and listen to us at your leisure.

Episode One, “Under 100K Ocean View Properties” offers a quick overview of the evolution of local real estate, followed by short descriptions of the current ocean view properties we have in this under $100k category–

• Property #1 in Lagunas
• Property #2 in San Buenaventura
• Property #3 in Tres Rios

We welcome you to post comments on the blog and, if you like what you hear, sign up for future Talk Show episodes and blog posts.

- Ben and Rod

“Success is not a place at which one arrives but rather the spirit with which one undertakes and continues the journey.” — Alex Noble

How would you describe the current “crisis” impact on the local economy and on Costa Rica real-estate in general?

Yesterday I made the trip up to San Isidro de el General to take care of some things. I was to meet Rod and Lindsay for lunch at “Mexico Lindo”, an amazing genuine Mexican food restaurant there, run by a bona fide Mexican Armando and his lovely wife. I have known them for years and used to frequent their little taco hole in one of the off-the-beaten-path streets of San Isidro years ago. Now they are located right on the central square and my, how things have changed since those days of long ago. I don’t think that there was a single empty table there, and at least 50% of what I heard was English – my, how things have changed.

Running the gauntlet of greetings as I made my way back to Rod and Lindsay, I looked up to see a couple who are particularly good friends, but that I have not seen for awhile. I greeted them with something like “how are you guys doing in this new world in which we live?” (reference to the economy), to which they responded, “what is going on?”. Working in real estate provides one with an interesting position in life. I didn’t realize it for a long time, but it is now clearer than ever. This industry is at the very foundation of life. We all need to live, play, and work somewhere. I received the above question in an e-mail from one of my clients just yesterday, so I heard the question a total of 2 times over the course of the day, and that wasn’t an unusual day.

Here’s what I think

We have lost a lot of buyers due to the economic crisis. We are gaining some buyers that we wouldn’t have otherwise had. It may look something like the graphic there to the left. It means a slow down for us here in Costa Rica, but not death. I have a client/friend/partner that is a high output kinda guy. I’ll call him Steve, a lawyer in Florida. He purchased a piece of land from me 3ish years ago. Subsequent visits have given us the opportunity to forge a friendship. Steve had a plan.

• Sell his beach condo that he bought for investment
• Sell his main home
• Let the lease on his Porsche run out
• Finish up obligations at the firm
• Set up some means of income in Costa Rica
• Move to Costa Rica

Steve LOVES Costa Rica. This is home to him. Every visit here confirms it to him. He just needed to get the ducks all lined up in a neat row prior to making the move. This is a common scenario. Life was fine. Plans were being made. Then, it all changed. Continue Reading