Evaluating a property here in Costa Rica is a dicey prospect, and “comps” as often as not, are based on what someone else is “asking” for their property, and not so much in what something comparable has actually sold for. The problem is, there may have been a gap of time since a nearby property has sold, and what the seller calculates his property to be worth now. This is based on the word-on-the-street about land value appreciation here. Or there may be an anomalous sale somewhere in the zone that can be referred to. So there is often a huge disparity between what the last nearby property sold for, and what the seller thinks his property is worth.
To sell a piece of property here, a seller needs to appeal to the needs of the real estate agent. Those of us who have offices are busily working our leads, and updating our websites (hopefully) and meeting with clients that have questions about how to build and so on. We spend a lot of our time, perhaps the lion’s share of it, working with listings. When we have a ready-to-buy client, and hopefully have his/her best interest in mind, we have a number of properties that come to mind in response to what they tell us they are looking for. We are in this business to make money, plain and simple. So we want to show the prospect something that fits what they are looking for, as well as is a good value.
The Type of Sellers We are Seeing:
Developers that got into the game here, just a little bit late. The accounts of big money being made on buying up a large tract of land and subdividing it to make enormous returns percolated out into the global community of developers.
The value of the large parcels was going up at a higher rate than the value of the individual lots, so that the margin for profit was shrinking for these developers. There was still enough in it for it to be irresistibly alluring so the big tracts kept selling. This is not to say that the single family lot prices weren’t going up, they were, but just not as fast, proportionately, as the large parcels. By the time these late developers got their single family lots to market, the big land grab slowed down some due to higher prices.
The most common request I used to get for land was for an ocean view lot for under $100k, and we had them. I remember tracking the number of such lots and watching them dwindle down to nothing. Almost to the day the sale of the last under $100k ocean view lot can be established. Sure, there are a couple out there still, but they likely have a price mitigating feature of some kind. I’m here referring to general market, ready to build, ocean view lots.
Our bread basket moved into the Ocean View Lots for $125k, then up to $150k and so on to where we are now. I don’t think that you can start looking for a decent ocean view lot in Uvita for under $200k now (although, I do know of one :o)
So the easy sale moved into normal-type real estate business. Obviously the higher prices knocked a good sector of our buyers out, or moved them into the still a great value category of non-ocean view lots.
The result of this has been a number of developers who have had to wait too long to recoup their initial capital, and many of them have investor groups back home that are waiting for the big returns that the front runner had talked about with them 2 and 3 years ago.
These developers are ready to deal. Have cash in hand and you can negotiate a pretty attractive price on an ocean view property. Package a couple of their lots together and you can further enhance the potential for getting a deal. Of course, you need to know that the “asking” price was fair to begin with. This is a function of your real estate agent to help you to know.
I know about such scenarios right now in specific properties in Hatillo, Lagunas, none in Escaleras at present, Uvita, and several in the Ojochal and south zone.
The area south of Ojochal is being impacted right now by the construction of a golf course. (I am personally involved in this.) The affect on land desirability there is being affected and there is a quite a bit of speculation going on around this project. The project itself is offering some pretty low buy in prices right now since it is in a pre-development phase. I think that we’ll see this area do some macro-cosmic growth in the coming years.
There are still a lot of buyers around. We have lost a big chunk of our equity buyers. They have been replaced by Europeans, Canadians, and Ticos (Costa Ricans). Selection is good, and there are deals to be had.
So things are good in our little neck of the Costa Rica real estate marketplace. I am building a list of buyers that would like to be notified of the “Good Deals”. I’m calling this list “VIP Deal Seekers”. The requirements to be on the list are that you have ready cash available, and can arrange your affairs to make a quick decision. This usually involves a trip to Costa Rica to view the property. A distressed seller will accept below market offers for the promise of a quick closing. If you would like to be on this list, please let me know. I’ve structured my contact page to accommodate the request.