Why the Costa Rica Real Estate Market outperforms U.S Real Estate

From the Desk of Michael Simons

People always ask me how the Costa Rica real estate market is doing, is it stable, did we see a big fall out like the USA?  I believe Costa Rica has one of the most stable markets in the world for a couple of reasons.

    1.  99% of our clients paid cash

    2.  There is no formal MLS in Costa Rica

People can blame whoever they want for the crash of the real estate market in the USA. You can say it was greedy real estate agents, pushy mortgage brokers, banks looking the other way. You can blame it on one President or another or the law that was passed to allow easier access to housing which opened the door to non-qualifying loans. And all of these might be true. But the real reason for the decline of the housing market was individuals buying homes, who should NEVER have been buying those homes.

How come nobody blames the buyers? How come nobody takes responsibility anymore? When you sign a contract it is your responsibility to make sure you can live up to that contract. Not the mortgage brokers.  He didn’t put a gun to your head.  So when those mortgage payments came due, and people couldn’t pay them, they just walked away.  Of course, they would, they only had 5% in the game.  But when you have 100% skin in the game, you don’t walk away.  You are going to be much more reluctant to unload that property.  Since almost all of our clients paid cash for their properties here in Costa Rica, they were going to be much more resilient in finding a way to keep it.  Since carrying costs are so low here, about 20% of what it is in the USA, people are able to ride the storm out much easier than they would if they owned the same priced property in Florida for example.  For that reason, we didn’t see a huge drop in prices and we didn’t have near as many foreclosures to drive the values down.

Liberia Airport Expanding in response to overwhelming increase in passenger arrivals

Liberia Airport expanding much quicker than expected.  We have been telling people for years that the Papagayo region is primed for another big push.  As is normal the wave of tourists comes first and the real estate investment follows.  The number of passenger arrivals into the Liberia Airport have increased dramatically over last year to more than 30.5% more than this time last year as reported in the Costa Rica Star.

In response to this increase the airport terminal is set for another expansion to the tune of $10 million that will begin this year.  Here is the link to the Tico Times article about the expansion.

Don’t wait until there is a buying frenzy again!

COME ON DOWN BABY!