Richard is the owner/broker of Coldwell Banker Tamarindo, and the founder of the vacation rental company www.viptamarindo.com. Please get in touch if we can help.
Visit www.coldwellbankertamarindo.com for over 3000 beach properties, from all over Costa Rica. Make up your own mind and message me richard@cbtamarindo.com
Summary
A frustrating element of my professional life in Costa Rica is when people make sweeping statements about Costa Rica real estate being overpriced. Today we analyze whether this assertion has validity.
Nicaragua is half the price
Nicaragua/ Belize/Honduras/Peru property prices are much less than in Costa Rica. That said, very rarely have I lost a sale to them. Costa Rica has the rule of law, a robust property registry, stable government and low crime. These fundamentals are necessary prior to even considering a large investment overseas. Some promoters of Costa Rica fudge the prices, give headline pricing for beach properties with no amenities but paint the picture of a beach lifestyle which sometimes causes buyers to feel that they are not getting as much for their money as they had thought.
Half my time is advising buyers, half with sellers
About half my time is advising buyers, half with sellers. So I am in a privileged position, to understand the thought process behind property pricing.
Realtors don't set property prices, sellers do
It sounds obvious, but this is a common misconception. During the listing process the realtor will advise, but the seller decides. Often the seller’s decision is based on their personal circumstances- what they bought at +, what they need for the next step in their lives, at what price they heard that the neighbors sold. A key factor is the seller’s urgency to sell, and in general they are not in a hurry. My office policy is that we will not take overpriced listings, but many realtors will in order to win the listing.
How do you spot an overpriced property?
It is much more difficult to spot an overpriced property in a second home market. Architectural styles and build quality can vary much more in any given neighborhood. The indoor/outdoor lifestyle typical in Costa Rica means a cost per foot comparison is difficult. Historical actual sales prices are not publicly available. Days on market is a good indicator, though second home property days on market is much longer than in a first home market.
Flexible buyers
For 80% of buyers, Costa Rica is a second home that they plan to make their main home over the next few years. It is a cash market, so generally the buyers are financially astute, and have made their money by making good financial decisions. Budgets tend to be flexible, and it is far more about what they want, rather than what they need. For example one property for sale has steps down to a ‘private’ beach. For the right buyer this is a massive plus point, so the property will find a buyer even though it is, by other criteria, overpriced.
Prices today
It is a seller’s market today, inventory is low, and well priced properties are selling quickly. There is less negotiating room, and there is an urgency because buyers know that the property will not be available for long. Prices are steadily increasing, but the market is not overheating. There are still some deals available, but they are becoming less frequent.
Негізгі бет Don't buy Costa Rica Real Estate, it is overpriced
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