2014: A Year in Review

by Rod Martin

Costa Rica faced many new events, both inside and outside of the real estate realm in 2014. The country elected a member of the new political “party of the people”, Luis Guillermo Solís to presidential office. The entire country celebrated as the national fútbol team reached the Quarter Finals in the World Cup. And the real estate market finally showed hopeful signs of life due to foreign investment.

Then & Now

The coastal real estate ‘boom’ was just beginning in 2002. Tamarindo was still a small, sleepy beach town, and the Costal Ballena in the southern zone wasn’t even on most travelers’ radar. Manuel Antonio was as far south as most people ventured, mostly due to terrible roads and infrastructure. Even today, anyone looking for all inclusive resorts and sky-rise condos stick to the northern Pacific area of Costa Rica.

As the popularity of Costa Rica grew, home and land prices did as well. Unfortunately a downturn was just a few years away, and sellers chased the prices downward for about five years. Properties sat on the market for years – some are still there waiting for the prices to bounce back up.

Raw land prices are still off by about 50% from the peak in 2008. This is great news for buyers looking to invest in an ideal piece of paradise. There may be a slight uptick in List Price, but the main difference we’ve noticed is that most sellers aren’t taking 20%+ off their list price. Sales price averaged 13% off list price, and that number dropped to 12% in 2014. We expect it to move toward 11% in 2015 and here is why…

Clearing the Clutter

Many of the big ocean view properties have sold. This is due to two main factors including increased US investor interest and Costa Rica publicity. This small country has been featured in a number of magazines, travel channels, publications, and blogs in the last year.

This growing activity means a lot of properties have sold, but there are still plenty of great deals on the market at a variety of price points:  High Ridge Ocean View with No Restrictions for $199,000, and River Runs Through It  just reduced to $299,888… to name a few.

Houses, especially those with modern architecture and contemporary design have been the hottest commodity in Costa Rica. Many investors do not want to deal with the stress and uncertainty of building in a foreign country, and there are a number of beautiful homes that could be used for vacation or rental purposes. While expectations and timelines may have to be adjusted for construction in Costa Rica, there are plenty of talented architects, engineers, and construction managers that are available to build your dream home. As people become more uncertain about ‘first world’ living, we have seen many people from all walks of life, with a wide range of budgets, invest in raw land with the idea of building slowly and steadily in the coming years – securing a place to escape if things really turn bad up north.

Because of the factors mentioned above including foreign investment, Costa Rican publicity, and the challenges that many countries (specifically the US) have been facing, we believe the real estate market will continue to grow, albeit slow and steady. The Costa Ballena in the southern zone looks to be a sought after region, although the National Parks, lack of an international airport, and slow paced way of life should preserve the area, including waters, forests, and wildlife, for many years to come.

The Future

We are excited for whatever 2015 brings – it’s hard not to be excited when you’re living in pura vida paradise!