How is the – Financial Meltdown – affecting Costa Rica?
Devastated Stock Trader
To get more information on Costa Rican developments go to: CR-Homes.com
My sister lost 40% of her retirement funds last week. She has worked as a teacher for well over 30 years. She has always been conservative…her house is paid for, she has no debt, and both her and her husband will receive excellent pensions. She called me yesterday and asked “so… tell me again how much it costs to live in Costa Rica.” And this is a person who would never even think about “leaving the States”.
How much will the credit crisis affect the real estate market in Costa Rica?? Well, we have already seen reductions…and in some cases, drastic reductions, in pricing along the pacific coast where purchases were funded primarily with home equity funds and discretionary income. Any situation which has been funded primarily with equity money and was leveraged with this type of credit arrangement has already been hit hard…and many projects have closed their doors. And in many cases, the projects will NEVER reopen or simply be taken over by someone else with deeper pockets.
We have seen a dramatic surge in interest in our projects along the coast… http://www.azul-costarica.com and http://www.crventanas.com. Why? … In a nutshell…price point. The “lower priced” projects which are still quality are selling. We have had several (actually closer to 8-10 depending on status) sales and reservations take place in the past week…some through our newsletters and our own clientele and others through realtors in Jaco and surrounding area. We suspect the slowdown will continue but we also fully expect, especially as “buzz” increases about our projects, that they will sell out quickly. We have a group from Sweden that wants to exclusively represent us with regards to Playa Azul and we had a potential buyer yesterday for Ventanas who told us that he was “pleasantly surprised” at the beauty and professionalism of the project as the others he has seen in the area didn’t even come close. And this is someone who has lived in Costa Rica (relocated from the States) for ten years.
I could give quotations and testimonials from several other people but I suspect that anyone who is interested would do their own due diligence…as they should. The most obvious questions are ( with regards to our projects) :
New York Stock Exchange
How low will prices go? …and… Can I get a better buy somewhere else?I could give glib answers but the only ones that will satisfy a buyer who insists upon due diligence is research and discovery for his or her self. Prices , if they are liquidation , can theoretically fall to zero or close to is. If they are development and sales are ongoing, take a look at price points and do your own calculations knowing what land and construction costs are. I suspect in the cases of both Ventanas and Pueblo Escondido you will arrive at the conclusion that we are offering at close to break even. Does your homework…ensure that the work is quality and that you WILL receive what you are paying for. And be sure to check out the competition.
Las Brisas? … our development in the mountains overlooking Grecia? We are currently priced at substantially less than the competition and the competition has far less to offer. In the Grecia area, prices of nearby land are a minimum of $70,000 per manzana, or a little less than two acres. And that is without amenities and infrastructure. There is no comparison. If you want the perfect temperature, panoramic views, a decent amount of land and want everything except the house, already in place… ask us about Las Brisas. We will ensure that you receive the best possible price for the home that you build and are willing to work with you to make certain that you get the custom home that you have always wanted in Costa Rica.
So then…what about prices in the Central Valley…Grecia and surrounding towns. Well, to date we have seen absolutely no slowdown. I predict that we will see some, especially with coffee prices now down. I think that we will be able to grab a few properties at prices less than today’s market and I think that the smaller properties with views that are currently around $40,000 … will drop. We need to be selective. Please trust that we will not overpay and will tell you what direction that we think the market is headed. We need to also remember that construction costs will not fall by more than a few percentage points. So… is it worth the gamble to save five grand on a property that you love? Maybe… but only you can decide that. I do not feel that we will see wholesale declines. Remember, where we are, most of the time we are dealing with coffee farmers and landowners who really have no idea of world events.
So…go slow, be selective and do not be pressured into buying. If you think a price is a good one…ask questions and make certain that you are receiving value. The one thing that we at CR Home feel is inevitable? … That more and more boomers (and now, even more than before!) will continue to move to Costa Rica. There will be hiccups along the way…but it will happen. It is escape but, for Rhonda and I, it has been the best thing that has ever happened to us.
Call us… ask questions…and know that we will be there for you.
Randy and Rhonda… and all of us at CR Home