Guys In The Zone: Costa Rica Real Estate

We'll see what the year 2012 brings to Costa Rica's southern pacific zone.

November 28^th, 2011 marks the start of the high season, speaking from the perspective of the Guys In The Zone here. However, in the few inquiries that I have made, it is apparent that there was a definite up-tick in sheer numbers of people in The Zone starting on that day, just a little over a week ago. Here’s what we’re seeing around the Guys office.

Lots of Sellers

We were focused on getting our property data based fleshed out over the last couple months of the rainy season.  Rod & I thought we were doing pretty well, taking advantage of the rains, and the quiet time in Uvita and Dominical to get all of our properties in order.  We have come to discover that there is no room for being smug on this front. We are nowhere near caught up with our sellers. We have quite a number of sellers that come down to Costa Rica every six months or so to visit, play, unwind and take care of property matters. This influx of sellers coming by our office, and working with them in various matters pertaining to selling their property has clearly indicated to us that we are in a Buyer’s Market here in Costa Rica. We have LOTS of excellent properties for sale at great prices.

Lots of buyers

The problem with all of these sellers coming in, is that we also are experiencing lots of buying activity. This is great for the coffers of the Guys In The Zone, but it makes for the need for Rod & I to get ourselves cloned, which we are not inclined to do, so we are simply running as fast as we can to be able to accommodate.

Buyers Profiles

Profile 1The global economic crisis seems to have inured to our benefit.  People are saying “I’ve had it” with wherever they may live (lots of Europeans in the mix, as well as Canadians and US’ians) and making the move to Costa Rica. A rather new buyer’s profile for us are the younger families that are not in the financial condition to move to Costa Rica, at least in the old “retiree” manner. These younger folks are coming here as a direct result of unpleasant conditions “back home”. So, they are looking for income generating properties.  Over the last month or so, Rod & I have dealt with about 3 of the following type requests.  These buyers are looking for:

• An income generating property
• Room to build several cabinas
• Room for a small restaurant
• Room for a main living abode for the buyers
• Budget of $200,000

The Esquinas property sold, removing from the front window what was clearly the most talked about property in our office.  We now have another couple of options for these requests, but this is a VERY tall order. We are expecting what properties there are that can satisfy these criteria to be gone by season’s end. Here is the new HOT relocators, income generating property: Pequena Luna

Water at the End of the World

Profile 2 End of The Worlders Last week I worked with prospects that want 100 hecs, lots of water, land to farm, and big view. Their budget is 1,000,000 Euros ($1,350,000 USD). They are looking to being self-sufficient, to the point of providing their own food, water and electricity.  We may have hit pay dirt with some amazing ocean view property up in the mountains around Uvita.

Profile 2b This next one doesn’t fit in the End of The Worlder’s category, but they are certainly an interesting indication of market conditions. There aren’t enough of them to credit them with their own profile, so they are abbreviated. An investor’s group from Europe, looking towards doing an interesting, very green hotel with some activity attached to the hotel, like a golf course, or some other. The budget on this one is multi-millions.

Old Standard Property Buyer Profile In addition to these rather impressive profiles, the old standard is still there – the retirees looking to move to Costa Rica and enjoy a lifestyle with less of the frenetic pace and media saturation of the “developed world”.  It seems that the economic downturn has had an effect on this seemingly bullet-proof group of prospects.  Whatever plans they made in their lives for retiring: 401K, IRA, market portfolios etc… things have simply changed, and now the thought of generating a bit of income with what they do here in Costa Rica is of interest.

Rod is currently working a deal in progress on an amazing listing that we just got here in Uvita that is just a short ways up the hill behind Uvita. The property measures just under an acre and has a gorgeous and expansive ocean view. $90,000 on this one.  Even if this first round of negotiations doesn’t go through to close, I have little doubt that it will go quickly.

Rod is also working a gorgeous ocean view lot down in La Perla Ballena, which is south of Uvita about 5 – 10 minutes. The asking price on this one is $165,000 (back to business as usual). The buyers offered $115,000, the sellers have countered at $150,000. The buyers are cogitating on this.

We’ll see where it all goes. I include these rather mundane details of our lives here because I think that these points help you, dear reader, to know how it is here now. What the feel is here in U-town and in the southern zone. There is more, and it would seem, serious, talk about the international airport having its funding. This may actually be a reality about to happen. Heaven knows why people need to fly into the southern zone of Costa Rica, but it would seem that this is what “they” want to do. The implications of this to land values is interesting.

I’m getting close to my self-imposed blog-limit of 1,000 words so I’ll leave you with this. I went out to the San Buenas Golf Resort today, and I’m blown away.  More to come on that front.

Uvita Costa Rica is a Diamond

The popular movie series of the – what was it – the nineties, eighties? Well, whatever it was, Back to the Future illustrated well the point that knowing what is going to happen in the future is key to making a lot of money. The problem with this tidbit of obvious investment data is that none of us have the ability to know what is going to happen in the future. So we deal with our inadequacy by analyzing data, conditions, information, trends and rational thinking to come up with a picture of what we feel is going to happen.

Now, if I haven’t lost you by my utilizing a sensational title and then reneging, let’s move on.

Ben’s Data, Conditions, Trends and Rational Thinking as it Relates to Real Estate in Costa Rica’s Southern Pacific Zone

There is an interesting change happening here on planet earth. Old rock-solid institutions and unmovable, immortal entities have gone the way of the dodo, they’ve died, and we inhabitants find ourselves looking around – hmmm, how to say? a bit disoriented would be a gentle way to put it.

I had a guy come into my Uvita office the other day to explain to me in great detail why buying gold is important, and that the major banks in the U. S. are going to be going under shortly: Bank of America, Wells Fargo and others.

This wasn’t some lunatic. This was a credible man in his sixties that has found his way in life that any of us would characterize as “successful”. The point, however, isn’t to debate the vitality of these North American institutions, but instead to illustrate the time of change that we are living in, and how this relates to real estate in the Dominical, Uvita and Ojochal zone of Costa Rica.

Quality of Life Yearnings -

Dominical is, for many, symbolic of an agreeable life change, a step back in time and a step towards a simpler way of things. Its perpetually non-improved dirt “main street” and lack of growth facilitates the little town to be likened to something worn and comfortable – an old shoe perhaps?

Talk with some of the vacation rental owners in the area and you’ll hear of the regulars that come every year and stay for a month. Talk with the folks that come and stay for the month and you’ll hear how they love the laid back, rustic, simple feel of the towns. Talk with all the above and many will confess to the desire to move here.

More on this data point later.

Geographical Data -

"Pizza Town" Dominical Costa Rica

Dominical is situated on land that is configured like a slice of pizza, with the wide part of the slice being where most of the buildings are. The slice is defined by the Baru River at the wide end, the pacific ocean along one of the sides, and the coastal mountain range on the other side. The sides both converge to make a point right at about where the restaurant and hotel Roca Verde is situated.

Uvita is like a diamond shape – well loosely like a diamond shape. It has a lot more flat space around the town. Our guessings of some years back was that Uvita would eventually become the social/economic center of The Zone, and indeed it has. However, back at that time, Dominical was the place to be and was the only place known in countries other than Costa Rica, so one might have thought this prognostication to be a bit adventurous at that time.

For the first six years that my family and I lived in San Isidro (inland from Dominical about 30 minutes), we did homeschool and I worked on Internet technologies from home (when I had a connection to the Internet). Part of our weekly schedule was a beach day. We had it down. We had a box with cooler, towels, hammocks, adjustable straps for the hammocks, and receptacles for seed and shell gathering. We almost never went down to the beaches of Uvita, even though they are arguably nicer than Dominical. The reason? The road was sometimes impassable. It wasn’t paved and the trip could take 45 minutes.

Dominical Costa Rica as a Slice of Pizza

This would be a bit difficult to accept if all you have known about the Dominical / Uvita link is the current highway, but I am not describing an ancient era. This era in fact ended a mere 7 years ago with the paving of the highway.

In my next installation here, I will look at some more trends and data points, as well as my read on what all this indicates about how to get rich in Costa Rica real estate.

More on how to Get Rich in Costa Rica Real Estate Coming Soon!

This is our mid-year review of real estate in the Southern Pacific Zone of Costa Rica. With tourism numbers up 11% in Central America, Ben and Rod discuss how this trend points to a brighter future for The Zone.

Costa Rica Real Estate – Talk Show 13 by GuysInTheZone

A typical conversation in a-day-in-the-life of a Costa Rica real estate agent.
Visitor – Hey Ben, howzit going?
Ben – Good man. How’r you?
Visitor – Good. How are things in The Zone?
Ben thinking to himself – (Translation: Are properties selling? Are prices going up? What is this season like? What is the coming season going to be like? How much is my property worth? What is the effect of the global economic crisis on Costa Rica? I’m thinking of selling my property, is now a good time to sell? I’m thinking about buying a property, is now a good time to buy? Etc etc…)
Ben talking – Going fine. We’re not in a boom by any means, but by contrast with the last couple years, we feel encouraged.
Visitor – Sounds good. What’s selling?
Ben thinking - (or – Are prices going up? What is this season like? What is the coming season going to be like? How much is my property worth? What is…)

It is like having a super-power. Perhaps a bit overstated, but essentially true. The nature of the business of real estate does give one an ear to the ground on how things are going with the economy, social trends and by extension, the quality of life In The Zone. We all are curious to some degree about “what’s going to happen” and so we are on the watch for data, for information that’ll give us a clue as to what the future will be like.

To illustrate: Pre-Super Bowl talk shows. These popular shows are really about nothing more than guessing what is about to happen in the next few minutes. Player’s strengths and weaknesses are analyzed, their past injuries are discussed, and notable personal traumas might even play a bit into the picture. And this is all around what is about to happen with something that really isn’t going to impact the quality of anyone’s life to any appreciable degree! We humans love to speculate on what is going to happen in the future.

So, I’ll give you my read. I’ll tell you what my crystal ball says regarding what the future might look like here in The Zone. To do so however, Continue Reading

A candid discussion of the current market values, as well as The Guys’ views on selling right now, in a down market.

Guys In The Zone Talk Show – Episode 10
Uploaded by GuysInTheZone. – Discover new destinations and travel videos.

Property Values In The New World

It would seem that life has settled into a routine now in our “new world” setting here in Uvita Costa Rica.  What’s it been, 2 years since the global economy went into the stink house?  My how time flies.  Our real estate company is cooking right along actually doing some business.  The business that happened so rarely during the recession was mostly for under $100k  lot sales and $300k was the upper edge of house sales.  The prices in our market have dropped 40% – 50% across the board.  And there are still some highly motivated  sellers out there.  I’ve started a list of these sellers.  Originally I was going to call it the “Desperate Sellers” list, but I have re-thunk it and come up with the “Motivated Sellers” list.  Right now I’ve got 5 properties on the list.  The top deal there at this writing is the 57 acres farm in Uvita for $250,000.  Click here if you’d like to check it out.

The point is that the market has definitely re-defined itself and numerous sellers are adapting.  We went through a time here in The Zone when it was pure death, nothing sold and there was no one looking.  Some real estate offices closed down and others (like GITZ) tightened their belts and survived.  Now we are watching and learning what the new world looks like.  Here’s some of what we’re finding out.

Money is tight (duh!).  But, there are buyers here, and they aren’t just the $100k lot or $300k house buyer variety.  There is a recent sale of a Lagunas house for $750k and an Ojochal house at $850k, so we seem to be breaking out of the old restraints.  This isn’t to say that things are hopping again here in the zone, but they are a sight better than they’ve been for a couple of years.  The Guys In The Zone are enjoying doing some business, but again, it’s all been for steeply reduced pricing.  We had a client come down looking for a $100k ocean view property, of which we have some to show, but these clients morphed their criteria while here, and were enamored with some very fine properties at great prices.  End of the story? 2 lots at just a little over $500k.  If you’d like to see what the properties were, click here for one, and here for the other.

Conversations about current values abound.  Methods for establishing the values Continue Reading

“Few people actually stumble into wealth.”
- Smith Barney (although I couldn’t determine if it was Mr. Smith or Mr. Barney?)

In Part One of this article, I outlined how million dollar houses fit into the Costa Rica real estate landscape, specifically in the southern Pacific zone (The Zone).  There are a few obvious reasons to buy a luxury home in Costa Rica—

*  It’s A Buyer’s Market (Prices are down approx. 50% from the peak in 2008.)
*  Desirable Area (International Living Magazine rated The Zone as, “one of the top three real estate destinations in 2010.”)
*  Stable Prices For Construction Materials And Labor

The three-year Costa Rica real estate trend has reflected a significant drop in value, including property in the luxury home category.  Although there are some very nice million dollar homes in the area, this young market enables another popular strategy— Buy-And-Build.

Buy and Build

The majority of buyers who come down to the greater Dominical area with a plan to purchase a house, often end up purchasing raw land instead.  The reason is the area has a relatively small inventory of quality homes with floor plans and finishes that appeal to most North American and European home buyers.  So, they end up buy raw land or a lot in an established development, design their home with the help of a Costa Rican architect, select a builder, and then start the building process. Continue Reading

The Guys are doing quite well, thank you very much.  We are currently made up of 4 official Guys, as well as a smattering of several honorary “Guys”.

Ben - Living the Life

My name is Ben Vaughn and I am no longer the oldest Guy, since Chan has made his business acumen available to the Guys on a consultant basis, and he is older than I am.  Rod & I are the originators of Guys In The Zone and we have now also been joined by Richard, a very welcome presence in the Guy’s office as he brings his enthusiasm, energy, and of course, solid business practices into the fold.

Our office is located in what is now known as the BM Supermercado (Supermarket) building. We are where the Rainforest Internet Café was located. If you go to the south end of Uvita, and look to the left (inland) side of the highway, you’ll see our blue spiral staircase in between two rather garish yellow background Farmacia signs.

We stand a good chance of moving to a ground floor location over next to the Marino Ballena restaurant. Stay tuned on this, but if we do, we’ll be just that much easier to find.

Richard - Guy In The Zone

We, like the other agencies in The Zone, are gearing up for what promises to be a rather busy “busy” season.  Our business barometers are the vacation rentals and hotels, who are all saying that their bookings are strong for the coming season.  We are setting up property viewing appointments and understand from our competitors that they are doing the same.

The general feeling is that we have endured the worst of the global economic downturn.  It is felt that our world has definitely changed here in Costa Rica, just as it has in

other parts of the globe, but that there is a newly defined and emerging system taking shape.

Basis for Optimism

At the very core of any successful market is the element of human

Rod - Happy Living

desire.  You can analyze a market every which way, but if the product or service lacks a strong appeal, it is likely going to do nothing more than flash (as a result of a marketing effort) and then burn out.

Properties in Costa Rica have always had, and continue to have, a strong desirability.  Couple this with a return to much more affordable prices, and you get what we feel we’ve now got, a genuine, non-boom real estate market place.

We aren’t looking for the white-hot action of the early to mid 2000’s.  We are looking for buyers and investors who peruse our online listings, e-mail us, come into our offices and shop what is available to initiate what for many, is the achievement of a life-long goal – moving to, and owning a property in, Costa Rica.

It is interesting that we seem to be returning to some of the demographics of years past.  We have been working with people that have 3 – 7 years as their projected timeframe for moving to Costa Rica.  It may be that retirement is on the horizon or kids will be getting out of school, or there might be an aged parent that needs care, and so on.  These folks come down now while the prices are low, and secure their property.

At the risk of repeating what I’ve written before: there are 5 basic reasons why people buy property in Costa Rica:

1. Relocation to be a full time resident
2. Migration lifestyle.  Live part of the year in Costa Rica and part elsewhere.
3. Income generating property. Use it as a vacation getaway that rents out when you’re not here.
4. Land bank.  Buy land at a good price, wait 5 years and sell it at a reasonable rate of return.
5. Build a community, retreat or family compound.

This last point (#5) has been enjoying a surge of activity as of late with what I like to refer to as the Escapists.  These ones generally are looking for larger parcels of land that can accommodate numerous structures.  These folks predict a crashed economy or currency back home.  Or an un-payable national deficit promising increasing tax hikes. Or simple uncertainty of what the future holds as society’s former standards and immortal icons topple and go by the wayside.  Going off-the-grid is frequently in the mix for #5. Oh, and the year 2012 prophesies helps a bit with this group as well.

What’s Selling

Our message to sellers is always the same.  If you want to sell, you have to lead the market in lowering your pricing.  There are basically 2 groups of sellers: those that know they have to lower their price in order to get listed with the real estate agencies, and those that REALLY have to lower their price in order to convert their land holdings here in Costa Rica into cash.  These are motivated by the need to protect something “back home”.  It is this second of the 2 groups who is mostly selling here now.

We are enjoying the re-appearance of under $100,000 ocean view single family lots.  These were gone for a number of years as the ocean view category’s bottom pushed up to somewhere around $150,000. Good quality houses in the $300,000 to $400,000 range are selling briskly.

There are some gorgeous luxury homes on the market but activity is soft in this category.  One could say it is a great time to buy a luxury home in Costa Rica’s southern pacific zone.

This is an interesting category since there are definitely capable buyers around, but the availability of credit is low. If a buyer is liquid to the tune of $1,000,000 or more, they may be reluctant to spend it in a single acquisition.  Consequently, we feel that seller financing is going to play a larger role in the coming season than ever before.

The Guys are enjoying life, and are here to serve.  Please let us know if we can help you achieve your goal of making Costa Rica your home.

In Northern California’s Bay Area, million dollar homes are very common.  They typically combine elements like— a desirable location, a large floorplan, upscale finishes, and/or estate-sized acreage.  My first position in real estate was in a beach area near Santa Cruz, and the power agent I worked for had no less than five million dollar listings when I joined her.  I just checked that broker’s website, and they currently have 307 houses listed between $1 million to $10 million.  Conversely, the Southern Pacific Zone of Costa Rica has a young real estate market and million dollar houses are less common.

Luxury Estate in Escaleras, Costa Rica.

As recent as 2006, this area was considered the new frontier in Costa Rica.  Access was difficult and more exhaustive than it is now.  Developments were few and far between.  Then, the real estate boom hit.  This boom affected all aspects of real estate—raw land, developing, construction, rentals and associated services.  All of the key elements for million dollar homes—desirable location, sweeping ocean views, large building sites, and affordable construction—were easily realized for a relatively affordable price.

Let’s start with the land… Continue Reading

Is the price commiserate with the worth?

“I need to sell my property.  What should I price it at?” is the common question heard in our real estate office in Uvita, Costa Rica.

“Whatever someone is willing to pay” is the universal response that drives the free market evaluation system the world over. However, is a price that is determined by this method a clear indicator of a property’s worth in Costa Rica?

The obvious answer is “of course”. However, in this uncertain world we live in, even this un-arguable standard of evaluation is sometimes brought into question and results in what can be described as quirky or illogical scenarios. Continue Reading