Real estate recovering but slowly, professionals say

The real estate market is making a recovery and, since land prices have decreased, it is ideal for those who are interested in buying properties in Costa Rica, said Realtors based around the Pacific coast and metro areas.

However, the recovery is traveling at a slow pace, and sellers are having to settle for lower prices, they added.

These are the general sentiments based on telephone interviews with brokers.

“Buyers can ask for refinancing and they’d get it,” said Ryan Bishop of Cabo Velas Properties in Matapalo. “They can ask for a 20 percent reduction, and they’d get it. Sellers are not in a position to not negotiate.”

“But sellers are not as apt to take low ball offers anymore,” he added.

The majority of Realtors report that they have had an overall good year with the exception of the slow season.

One professional, Scott Cutter of 2 Costa Rica Real Estate in Escazú, Manuel Antonio and Jacó, said this is his best year since he opened. He attributes his success to the practice of pricing properties at a point where buyers will respond, being honest with the current value, and providing education to his sellers so they understand the current situation.

“We don’t waste our time or our clients time,” Cutter said. “There are bad realtors out there, and we get the reputation that we just want to make easy money. So we educate our sellers with real data.”

This is not every brokers story, and some report that business has been down.

One problem is the number of tourists reported coming in are not traditional tourists looking for property.

“Visitors, unlike before, are not buyers, they are just visiting,” said Roger Vlasos of Pacifico Realty in Playa del Coco. “Before they had a motivation to buy. Now they aren’t even looking.”

According to Linda Gray who is president of the Costa Rican Global Association of Realtors, the Instituto Costarricense de Turismo reported that there are 2 million tourists. This number is skewed, she said, and within this number are people who own property and live here part-time.

Also lumped in are perpetual tourists who renew their visas by traveling to places such as Nicaragua and return.

A.M. Costa Rica also has reported that the institute annual figures include some 460,000 Nicaraguans.

This means there are less persons here for perspective business than anticipated.

Ms. Gray said that everyone is trying to make the best out of the situation and calling the economy a buyers market is one way of making the otherwise negative outlook a positive.

Most brokers are working to get their sellers the best price, and won’t work with persons who are unmotivated and willing to settle for the first thing offered, she added. She is an owner of Coldwell Banker Beach Properties in Playas del Coco.

The future state of the market seems to depend on a variety of factors that include the upcoming United States elections and the worldwide economy.

“No matter who gets elected, there might be a mass exit from those who don’t have economic faith in the government,” Ms. Gray said.

The next wave of immigrants are predicted to be the baby boomers. Also, there have been Europeans, Spaniards, Canadians and Chinese developing projects here, although Ms. Gray says she hasn’t seen a lot of Chinese developments in the beach region.

In terms of the economy, these people need to feel secure and comfortable enough to make investments, because those who buy beachfront properties in Costa Rica are looking for a second home, said Ms. Gray. Home buying is not a necessity, so perspective buyers have to have a strong desire to buy, she added. The increased value of the dollar will also increase property values.

Other factors that contribute to the market is the increase of taxes, difficulty to receive bank loans and the long time it takes to get building permits in Costa Rica.

Until these get better, the professional agrees that the market will remain hard for those who wish to sell property. This could last anywhere from two to five years, they predicted.

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