May 13, 2023 in Tips for Sellers, Tips for Buyers, Real Estate in Costa Rica

The South Pacific Costa Rica real estate market continues to thrive in the third quarter (July, August, and September) of 2022. More people are visiting our region and staying in vacation rentals. Construction grew exponentially as turnkey property inventory dwindles and more buyers are purchasing land and building new homes as new contractors arrive in this area. Additionally, our office has noted that it appears that average property values are at their highest value in around 15 years. With the rise of remote work, people are choosing to move to areas that bring them joy rather than moving somewhere because of work. Costa Rica’s inviting Digital Nomad Visa makes this process more simple and opens the door for more remote workers to move to our coastal destination. The arrival of high-speed fiber optic internet to most neighborhoods in Costa Ballena in the last year was a big game-changer that is growing the real estate markets in Dominical, Uvita, Ojochal, and the surrounding areas significantly.   A good way to analyze if a market is growing is to take a look at the net migration pattern, or how many are moving out versus moving in. Costa Ballena is in a positive net migration pattern where we are seeing more people coming in than leaving, creating increased demand. 

Third Quarter Market Results For Costa Ballena Real Estate

Eighty-six new listings came on the market in the third quarter of 2022 and seventy-two listings had successful offers in the Costa Ballena region at that time. Of those deals, 53 closed in this quarter for a total of more than $51 million, which is the highest total for the third quarter we have on record, and the biggest quarter so far this year. Of the total deals in the third quarter, 43 homes were sold and 22 lots. There were also four commercial properties with successful deals and three large farms over 20 acres in size. Micro markets, like luxury real estate that is truly turnkey, are the types of properties seeing the most appreciation in 2022. Currently, there are 308 properties for sale in Costa Ballena. 114 of those properties have homes on them with the majority for sale in Uvita. There are also 156 vacant lots for sale, 60 businesses (including hotels and Bnbs), six condos, and 22 farms available to purchase right now. In total, Costa Ballena saw over $51.6 million in sales in third quarter of 2022. This is a significant increase over the second quarter (April to June), which saw $44 million in sales. Even in the traditionally busiest first quarter (January to March), totaled less than the third quarter, with just over $50 million in sales. The third quarter of 2022 more than doubled the $22 million sold in the same time period in 2021, despite having more numbers of closings last year in the same quarter (99 deals between July and September 2021 versus 72 this year). The main reason for this increase in total values over last year is that home prices have significantly increased in 2022 and because this area is attracting more high-budget, luxury buyers due to more modern, top of the line constructions on some of the best ocean view properties in Costa Rica. The average sold listing value in the third quarter was $717,000 USD, which is nearly double the average selling price in the same quarter of 2021 ($346,000 USD). This is the highest average sold price that this region has seen in more than 15 years. The second quarter average sold prices this year were $659,000 for 71 properties and the first quarter saw property values average $607,000 across 104 property deals. These values equate to a more than 8% rise in values every quarter in 2022 so far. Vacant land that sold in Costa Ballena in the third quarter totaled $6.1 million and averaged $293,000 per lot across this coastal region. Farm sales (land over 20 acres in size) totaled more than $1.7 million and garnered an average of $589,000 for these larger, more raw parcels of land. Commercial properties were the second most valuable market, with $6.8 million in sales and averaging $1.7 million per commercial venture sold. Houses continue to be the biggest market for buyers in this region, taking in more than $37 million in sales for the quarter. Home values averaged $838,000 in Costa Ballena between July and September 2022.

Time On Market

As mentioned in previous market reports, the number of days that a listing spends on the market in Costa Rica is not an accurate depiction of the quality of a listing. Costa Rica is predominantly a destination real estate market. Buyers need time to plan a trip to see properties for sale in person. The newest homes get snapped up the quickest, with many brand-new, modern constructions going under contract within a month of listing. The oldest homes (those over 15 years old) spend the longest time on the market.  The average days on market for listings in Costa Ballena in the third quarter was 362, with a median of 131 days. The average is skewed significantly because some homes spend years on the market, only to one day sell to the perfect buyers who finally made their way over. Not every buyer wants a brand-new modern home and many still appreciate the character and charm of an older Spanish colonial construction on a mature property with an established garden. The ten properties that sold the fastest had deals within 28 days. Three of these were lots for sale and seven houses. The values of these properties that sold quickly were between $89,000 USD and $1,750,000 USD. This shows that there is no one price bracket that is moving in today’s market.  All of the homes that sold within a month were at least three bedrooms in size with at least two bathrooms and they averaged 3000 sq.ft. in size. Pools and established landscaping both factored into the quick sales of the fastest-sold properties (95% of the top 10 sold homes had these qualities), as did ocean views (8 out of 10 had big ocean views). Of the properties that took the longest to sell, these were mostly older homes or land that is located in not as popular areas (those without ocean views, rivers, or close to town).

List-To-Sold Price Ratio

The average list-to-sold ratio was 92.9% for the third quarter. The highest-value home that sold between July and September went for 114% of the asking price was a luxury residence in the prestigious Las Olas development near Dominical. This property sale turned into a bidding war within two weeks of listing and the home garnered an extra $250,000 on top of the asking price. The properties that sold for the closest to the asking price in the third quarter of 2022 were mainly located in Ojochal and Dominical. All of the properties that sold for 100% of the asking price were house listings that featured pools, landscaping, modern/contemporary design, and with luxury ocean views. Newly-built homes are the easiest to price accurately because there is a clear correlation between the land price, the cost of construction, and the market value. The properties that sold for much less than the asking price in this quarter were small lots and large farms. Older homes on more established properties have a less-quantifiable value because different buyers see different values depending on their wants and needs.

Construction Costs in Costa Ballena

According to a quote from a local architect in South Pacific Costa Rica, to build a premium quality (not luxury) turnkey home is around $1575 per m2 ($146 per ft2). To renovate an existing structure with a new kitchen, windows, tiling, and the works can run between $1100 and $1350 per m2 ($102 to $125 per ft2), depending on the existing building condition. Luxury home builds with top-of-the-line finishes and furnishings and built in the most high-end construction style will cost between $1880 per m2 and $2420 per m2 (around $175 and $225 per ft2). Builders in Costa Ballena normally charge around 8.5% of the total budget for the design, construction plans, and building inspection, plus tax. Buyers may be able to save money by buying an existing home that is older and bringing it up to more modern or even high-end standards and many choose this option because some of the most beautiful properties in Costa Ballena were occupied by homes built more than 15 years ago during the last real estate boom in this area. The price of land in Costa Ballena was around $25 per m2 ($2.3 per ft2) on average of the vacant lots including luxury ocean-view land sold in the third quarter of 2022. Ocean view land alone averaged around $27.70 per m2 ($2.57 ft2) while mountain view averaged $14.50 per m2 ($1.34 per ft2). The average price per square meter of the three farms sold between July and September was far lower at $1.60 per m2 ($0.15 per ft2), or around $6,600 per acre. Many unfinished homes were sold in this period based on renderings and site visits. Buyers enjoy the opportunity to pick out their own finishes and furnishings while not having to go through the challenging process of managing a home build. There is also a backstage economy of developers selling unlisted homes before they even have a chance to be brought to market. Realtors in the know can help broker these deals so it is essential to find a good agent who knows the different developments happening in the area.

Buyer Profiles and Driving Forces

The foreign buyer pool contacting our office is shifting from around 80% from the United States last year same quarter to 38.6%, leaving room to include more Canadians at around 14% and Europeans mainly from France, Germany, the United Kingdom, Switzerland, and the Netherlands.  Japan, Russia, Mexico, and Spain are surprising new additions to the top 20 markets for researching Costa Rica real estate on our website. Web traffic from within Costa Rica (31.5%) represents the many realtors and buyers from within the country looking for real estate in Costa Ballena. This internal market includes expats already living in Costa Rica and interested in buying into the hot Costa Ballena real estate market. Osa Tropical Properties' web traffic in the third quarter of 2022 was down 5% from the second quarter, which is within the standard seasonal deviation as we enter the rainiest part of the year (September, October, November). However, our website’s traffic is up 20% on last year and 3.5 times greater than what it was in the same period in 2019 and 2020. Traffic on our website began to increase considerably with the dawn of Covid restrictions in 2020. The shift to work-from-home culture brought with it the notion that living in a foreign country is within the realm of probability for more people. Those wanting to work in the tropics and in a similar time zone are finding much affinity in beautiful Costa Rica. Politics, mounting social strife, climate change, rising prices, and family security all continue to be the top factors driving buyers to Costa Rica. This is a country that proved to be decisive and fair during the pandemic and solidified its image as a place of safe and stable politics during this tumultuous time. People from all over the world are wanting to escape the increasingly hectic and aggressive urban lifestyle in search of a calmer social dynamic. Costa Rica tops the list of escape destinations because of its pura vida ethos, which has captured the hearts of many who have visited or know others who have. Increasing climate catastrophes are also pushing real estate buyers out of the traditional destination real estate markets like Florida, Texas, and California, as has the increase in taxation and the everyday cost of living. The cost of living is a huge driving force for people living in high-cost-of-living cities. Home prices, rents, and income taxes factor into this. NY, California, Illinois, New Jersey are all at the top of the list of the most expensive in the United States for the cost of living.

Popular Destinations

The most popular destinations in Costa Rica continue to be outside of the Southern Zone. The top beach destinations are Santa Teresa, Tamarindo, and Manuel Antonio, which is only 30 minutes from Dominical. Guanacaste is still the favored province and Puntarenas is still not on the radar for many visitors and investors. However, we have noted a marked increase in buyers from within Costa Rica who are seeking out our quieter jungle beaches rather than the drier and busier beaches up north. Costa Rica's capital, San Jose, is still the most researched destination in Costa Rica.

Rental Market in Costa Ballena

Top rental homes in Costa Ballena are expected to be new, modern, and with amazing 180-degree ocean views from every room. Being located within close distance to a highway and amenities is key, and having separate luxury residences for multiple couples or extended families visiting gives more marketability. Popular construction features include high wooden ceilings, sliding glass doors opening to large covered terraces, luxury furnishings and finishes, spacious bedrooms with closets and full bathrooms, large kitchens with top-of-the-line appliances, and quality amenities like a lap pool and sauna. These types of homes will rent for over $5000 per month. Basic rental homes are expected to come with strong and reliable fiber optic internet, to have around two bedrooms, a private kitchen, and a bathroom, and to be in a quiet and peaceful location. Most renters prefer homes in well-maintained, good condition. These types of homes will rent for around $1000-$2000 per month, depending on the precise location and amenities. Christine Schiferl from Jaguar Property Management based in Uvita says that a lot has changed in her business in recent years. She says that her company had its best third quarter on record. Her company has been in business since 2013 and this has been its best year. In recent years, she changed the company’s business model to only accepting luxury vacation homes.  “Luxury rental homes are those that are three or more bedrooms – the more the better – with full ensuite, all ocean view, and with rooms of equal size,” says Christine. “These types of vacation homes rent for $400 a night or more if they have all the bells and whistles.  Jaguar Property Management receives the most inquiries for the Uvita area. “I think it provides the perfect blend of tours, activities, restaurants, nature, beaches, and it is very convenient for families because it has larger grocery stores, banks, shopping, and more,” says Christine. According to the way this year is tracking, she believes that the coming high season (December to May) will surpass the last high season’s records. “We are booking in the rainy season, which we have not seen very much in the past. We rarely got people staying in August, September, October, or November and now we have quite a number of people coming here and staying in the rainy season.”

New Developments in Costa Rica

Digital Nomad Visa

The digital nomad lifestyle is now being formally recognized by governments and tourism authorities. Costa Rica, Bali, Portugal, and Malaysia have introduced digital visa nomad visas in the last month to jump on this global trend. Under Costa Rica’s digital nomad visa program, holders of this visa can stay up to three months and then extend their stay for up to two years, according to the Costa Rica Minister of Tourism, William Rodríguez. They can open a local bank account, they do not need to pay Costa Rican income taxes, they can use their home country’s driver’s license, and they pay no import taxes on computers and other remote work equipment. Costa Rica’s population of 5 million people would benefit economically with less than a percent of the U.S. remote worker segment. “Our research says there are 3 million people working in the States from home,” said Minister Rodríguez. “If we can have half of one percent of that, we are done. We are aiming for that number.”

Continued Growth In Tourism

Although it is difficult to accurately estimate the number of tourists who will arrive by the end of 2022, the Costa Rican Tourism Board (ICT) predicts that it is very likely that Costa Rica will close the year with more that 2 million tourists by air. Tourism figures for Costa Rica are showing a rapid regrowth this year from the height of 2019 numbers. All entry points in Costa Rica show 1.6 million visitors from January to August 2022, which is still down by 27% from 2019 numbers. But when comparing visitors arriving solely by air from North America and Europe, we can see that the numbers are closer to 2019's highs (90.6% and 94.8% of 2019, respectively). Costa Rica is considered one of the premiere destinations for ecotourism in recent years, and this naturally beautiful country is more than 50% forested. It has been part of the Happy Planet Index for several years, and has high-quality infrastructure established for global tourism. Tourism in Costa Rica is all about well-being in nature. The traveler type visiting Costa Rica has also changed in recent years. According to ICT, before the pandemic, the majority of visitors were made up of entire families. Now there is a higher concentration of couples or single travelers. Their studies note that the majority of tourist arrivals are from North America (71%), with the United States the bulk; followed by Europe (19.2%), South America (4.4%), Central America (3.7%), and the Caribbean (0.3%). Tourists who spend a vacation season in the country consider that they leave as better people, according to studies by the ICT. In their surveys of travelers carried out in national airports, visitors noted that Costa Rica is home to a “valuable society“. “Those who visit us consider that after spending a vacation season in Costa Rica they leave as better people, which has an incredible value from the point of view of communication, positioning, and other things that are essential to decide where we put our resources. tourism,” said William Rodríguez, Minister of Tourism.

Are we entering a market recession?

With high inflation and rising interest rates fueling speculation that a global recession is on the horizon, it may come as no surprise that realtors in Costa Rica are hearing concerns from their clients. Costa Rica real estate is not a financing-based market for foreign buyers. There is very little option for financing other than potential private seller financing so people are usually able to sit on their paid-off property in Costa Rica to wait out a bear market. Nevertheless, the push factors actually bringing people to Costa Rica appear to be growing in intensity as more and more foreigners from all over the world are looking to buy real estate in a more peaceful and less expensive location. Costa Rica real estate is generally considered to be a long-term hold and therefore potential buyers should consider that buying real estate in what may be a recession is not about trying to time the market but about the value of what type of property you can buy that fits with your lifestyle and is sustainable for hopefully 5-10 years.

Why Choose Costa Ballena Real Estate?

People appear to be interested in Costa Rica with renewed vigor. Nothing fuels the desire to buy a vacation home quite like the end of summer and the third quarter of 2022 showed us that many people envision a second home in Costa Rica as a source of family memories, wealth, rental income, and other lifestyle benefits. Property prices in Costa Ballena are set to rise, steadily driven by demand from foreign investors. With the many initiatives to continue growing tourism to this country and with the growing popularity of this region with families and digital nomads, we anticipate another record-breaking quarter to finish out 2022 with little sign of slowing next year. *Please note that we are not financial advisors and the contents of this article are only our opinions and not financial advice.

May 13, 2023 in Tips for Sellers, Tips for Buyers, Real Estate in Costa Rica

There is no official MLS in Costa Rica. Many companies have tried to create a true Costa Rica MLS (Multiple Listing System for real estate) but none are a true success. A number of real estate companies in Costa Rica have been able to gather many listings from around the country for their websites but none delivers on the promise of offering a full purview of what is available for sale in Costa Rica real estate.  Our Osa Tropical Properties website, however, is a very reliable source for listings available for sale in the South Pacific Costa Rica region known as Costa Ballena, which includes Dominical, Uvita, Ojochal, and the surrounding satellite towns. It is the closest website to an MLS in this region and is the most detailed, up-to-date, and user friendly in the Dominical, Uvita, and Ojochal real estate markets. *Stay tuned for exciting upgrades to our Osa Tropical Properties website coming up in the near future!

Osa Tropical Properties Costa Rica MLS

OsaTropicalProperties.com is our company’s local real estate MLS that we have invested a lot of time and money in for the benefit of buyers and sellers of real estate in Costa Ballena. Our South Pacific Costa Rica MLS consists of hundreds of qualified real estate listings from realtors all over Costa Ballena who share listings with us to in turn share with our extensive database. We receive listings from independent real estate agents from all over Costa Ballena, and we also post our own clients’ residential and commercial properties for sale. Other MLS systems in Costa Rica deal in residences for sale, short and long term rentals, lots and land for sale, commercial for sale, and commercial leases. This is a big point of difference from our Osa Tropical Properties Costa Rica MLS because we do not deal in rentals or leases, nor do we list for sale by owner listings. We do not have a subscription fee and so any listing we add must fill our requirements. Our Osa Tropical Properties web portal is managed by our independent local brokerage. We create detailed listings for our clients, including sophisticated property descriptions, professional home photography, drone photography, and video tour of our clients’ property for sale, along with the legal property plans and other relevant information. There are exceptions of properties that we will not choose to list, which may have issues such as a lack of access to utilities or improper title, or even something like an unrealistic sales price. These deal-breaking issues make certain properties virtually unsellable until resolved and we choose to spare our buyers the heartbreak of putting their hopes in a property that cannot be ethically sold in the state that it is in currently, even though it may still be listed for sale by owner or by a company with less professional integrity. Our OTP team of realtors will verify the properties we list with Costa Rica’s National Registry. We are bound to a code of ethics through our certifications with the Costa Rica Real Estate Board (CCCBR) and we have standard contracts and practices, which allow for other realtors to present our listings to their clients without a conflict of interest. Our office offers high exposure to listings for sale through a network of strongly ranked real estate websites and those who use our MLS have access to our high-powered search capabilities and well-defined filters that make finding the perfect property in Costa Rica much easier.

Finding A Great Realtor in Costa Rica MLS

The best option for learning about properties in Costa Rica is an experienced realtor who comes highly recommended by past clients. They may not be “certified” but experience is the most valuable qualification in Costa Rica’s nuanced real estate markets, which all differ by area. This is why buyers should spend the time to find a great realtor to help in their search, rather than expecting to find the right property for themselves on a Costa Rica MLS. Our office is populated with certified, knowledgeable, and experienced real estate professionals who are intimate with the pulse of South Pacific Costa Rica. Our client database has special benefits, including being the first to see new listings, video tours, and read articles on our website. After that, everyone is privy to access the listings on our website – largest verified property database in all of South Pacific Costa Rica. Our property listings are automatically translated into English, Spanish, and French languages and we offer world-wide reach through our network of real estate partners. We share our clients’ listings for sale with other brokerages in Costa Ballena to list on their websites, as well as on various MLS sites in Costa Rica and internationally. Even though we value the power of our proprietary local Costa Ballena MLS that we deliver on our website, we recognize that we do not want our clients’ listings to miss any opportunities for finding the right buyers so we take it upon ourselves to share our office listings through every viable avenue. We in turn take listings from other offices in the area. Our Osa Tropical Properties website has a curated list of many of the available properties for sale in Costa Ballena. A common worry when looking for real estate in Costa Rica is that buyers feel they must contact several realtors to get an accurate depiction of the properties available in the area that interests the buyer most. Our network of in-house agents will find you the property you're looking for without having to call every realtor in the area, which invariably adds confusion and uncertainty to the process. 

What Makes The Costa Ballena Real Estate Market Different

Comparable Market Analyses are what real estate markets are founded on. A property for sale can only be valued by comparing it to what other similar properties sold for in that area. Because Costa Rica does not have a central MLS system that includes all of the listings for sale, there is no standard of comparable properties for sale throughout the country. Every region’s market is reliant upon the established real estate brokers to keep an accurate portrayal of what is for sale and what has sold in the region, with their individual predictions on where the market is tracking. Osa Tropical Properties is one of the few companies in all of Costa Rica that produces quarterly market reports showing the state of our local real estate market, including sales figures, average prices, and our predictions for the coming months.  It takes an experienced eye with years of practice to know how to value a property for today’s real estate market in Costa Ballena. Our office has listed thousands of properties since we opened in 2004. Currently, there is no algorithm that could replicate the knowledge base of a good local agency that has ample experience like ours. 

May 13, 2023 in Tips for Buyers, Tips for Sellers, Real Estate in Costa Rica

Our recap of 2021 in real estate and some of the trends we are seeing for 2022 in our South Pacific Costa Rica Real Estate Market Report. 2021 was by far our biggest year for sales and for website traffic. In the first week of January 2022, we are already seeing a 6% increase in web traffic over last year at the same time and our biggest months still lay ahead of us (February to May). Properties that sold in the least amount of time in 2021 were varied in nature but still share a few qualities. Newer builds were most popular, as were homes with three-plus bedrooms, large acreages, and amazing ocean views with lots of privacy.

Costa Ballena Market Highlights

The average time on the market in Costa Ballena throughout 2021 was about 180 days, or about six months.. However, the average price of sold listings increased from around $346,000 in the third quarter to $547,000 in the last quarter. The average list-to-sold price increased as well, from 93% of the list value to an average of over 95% towards the end of the year. Only two ocean view homes sold for under $500,000 in 2021: one with highway noise for $300,000 and the other for $500,000 after two years on the market waiting for someone to overlook the large number of renovations needed. Two-bedroom ocean view homes in Dominical, Uvita, and Ojochal basically start at $550,000 in 2022, and even those are slim pickings,” says Kevin Champagne, owner of Osa Tropical Properties.

Comparing Days On Market

Properties in Costa Ballena that spent the least amount of time on the market tended to be newer homes with an array of the most favored qualities like privacy, ocean view, modern, new or well-maintained, and stylish.

3 days on the market

Uvita modern home, brand new build, small lot, three bedrooms, pool, no view, walk to the beach. Makes a great rental.

21 days on the market

50-acre property with amazing views and 4 big building sites in Platanillo.

30 days on the market

2018 build, modern, Uvita, good privacy, large pool, and amazing ocean view.

33 days on the market

  4 bedrooms colonial home in Lagunas that is older but well-maintained and was priced right. Conversely, properties that have been on the market for the longest amount of time (three-plus years) tend to be older properties that need lots of work or luxury homes over $2 million, for which number of potential buyers is still quite small in this newly-discovered region. However, there were a record amount of closings of these more challenging properties in Costa Ballena in 2021.

3.5 years on the market

Built in 2000, 5 bedrooms, located in Tres Rios. Features an unpopular indoor swimming pool, colonial architecture, and yellow walls that no one could get over.

4 years on the market

Located in popular Escaleras, this two-story home was too much for most buyers, priced at $2,350,000 although the views are worth it.

4 years on the market

A 10-acre farm in Tres Rios with not much view at low elevation but still 3km from the highway.

4 years on the market

A strangely laid out home that is not well maintained or styled.  “Style and upkeep matter,” says Osa Tropical Properties realtor, Katherine Apsey. “Clients need to hear that. Most people who buy here want clean, easy, and turn-key! Most buyers are not interested in using their imaginations to see what a home can become with a bit of work and money. Buying a home in Costa Rica is complicated enough and buyers want immediate satisfaction afterwards.”

Property Resale Value Significantly Increased

Comparing properties that sold in 2019 (our previous busiest year on record) and again in 2021, we noticed a huge increase in the prices of homes, averaging around a 36% increase in value. This may sound like an impossibly large increase for those accustomed to reading horror stories on expat forums that they are likely to sell for a loss when they inevitably leave Costa Rica.  It is important to note that many of the resold properties in 2021 underwent some type of renovation or maintenance work between buying and selling. However, it is also important to mention that of the properties that were significantly updated, one, in particular, was resold in 2021 at a 262% increase in value (this percentage was not included in the average as it was purchased in 2017). Another property on this list was bought and sold twice this year alone at a 24% increase on the resale just six months later. Katherine is sure that this is increasing buyer confidence in 2022.  “Because the market was so active in 2021, clients really had to narrow their focus and be prepared to act when the right property became available.”

Types of Buyers in 2021

2021 has seen a huge influx of digital nomads in Costa Rica and beach towns like Dominical, Uvita, and Ojochal are practically rented out entirely with long-term renters looking to escape the nine to five corporate lifestyle. Freedom is an important value to these young workers who would gladly exchange a stiff office environment for more greenery and the sound of the surf. Retirees who were drawn to Costa Rica in 2021 wanted to simplify their lives while affluent buyers were making more health-driven lifestyle choices to improve their quality of life.  Families moving to Costa Rica have been one of the hottest segments of buyers, especially in Ojochal and Uvita. Two new educational facilities have opened in Ojochal in response to the increase in demand: Life Project Education and Osa Jungle Academy.

Push and Pull Factors in Costa Rica Real Estate

In 2021, we noticed that the reasons for buying real estate in Costa Rica were shifting and more buyers were being pushed rather than pulled towards Costa Rica. Living in a city during the Covid-19 pandemic has been challenging for many people. Intensive lockdown measures have kept people living in populous areas so confined that they are feeling they need to escape. And the political circus of trying to deal with this health crisis among others has people yearning for something new. Yet, in spite of this, it is nearly impossible to buy a residence anymore in big cities like Toronto, Vancouver, Los Angeles, and New York. Buyers are being outbid and priced out of an equivalent quality home, even when considering moving to something smaller. They are finding that they can sell their expensive city residence and buy a gorgeous ocean view home in Costa Rica for a far more reasonable price with money to spare. OTP realtor, Rebecca Rowntree, says that most of her buyers in 2021 were avoiding lockdowns and cashing in on high real estate values for their family home. “The Canadians are going into lockdown again. And those who wanted to buy but didn’t last year are kicking themselves and kicking their plans for buying in 2022 into high gear.” Canadian buyers were her biggest market in 2021 because of both the intensity of the country’s lockdown measures and the record high real estate prices. “Right now, I’m working with more Canadian buyers than I am American buyers actually," says Rebecca. "And I'm also getting quite a lot of inquiries from European buyers. I did not have as many European buyers last year contacting me but I'm getting quite a lot now.” Canadians have been hesitant to buy in Costa Rica in recent years because of the uncertainty of the Canadian to US Dollar exchange. Costa Rica properties are valued in US Dollars so although a Canadian may sell their home for a high value, they are typically still buying less expensive properties so that they still have money to live on while trying to figure out what their lifestyle is going to be here. Rebecca says “whereas before people were thinking ‘I have to have a plan for what I’m going to do for work and to live here. Now, people are throwing caution to the wind and saying ‘we’re out’ and they are leaving home with the mindset that they will figure things out once they are here. Kind of like it can’t get any worse.” She cautions her buyers that now is the time. “My Canadian clients who were sitting around waiting for the exchange rate to get better and sitting and sitting and sitting. Now they are realizing that it may never change so what else are they waiting for?” Another interesting push factor being mentioned by people wanting to move to Costa Rica is to get away from the convenience of American life. Costa Rica is presented as a country where you can get back to nature and live a simpler life. Some buyers in 2021 have mentioned that the conveniences available in other parts of the world like Uber Eats and Amazon Prime have made them sedentary and left them feeling unhealthy and detached from nature and other people. The attention is on Costa Rica as an escape destination from people in high-pressure societies looking to move to a place with more natural beauty, peace-loving ethics, and a great sense of community. This attention has new sellers of in-demand properties in Costa Rica feeling encouraged by the amount of very quickly sold properties in the area, despite only experiencing about one-third of the tourism traffic of 2019.

Trends in Costa Rica Real Estate in 2021

The United States continues to be the biggest market for properties in Costa Rica. However, our website traffic indicates that Canadians and Europeans from France, UK, and Germany are all growing markets that will likely continue to expand in 2022. Australians and Israelis were two new markets that were showing strong interest in Costa Rica real estate in 2021 and are likely to continue growing. 2021 saw a shift in our real estate market towards favoring sellers, with sold prices reflecting this trend. This has attracted significantly more buyers to purchase properties in Costa Ballena sight-unseen in 2021 than ever before. Of the roughly 300 properties that were for sale in 2021, 17 were taken off the market by listers who decided to keep their properties after all. The most typical reason for this was that they wanted to keep the property for themselves after seeing the value of the property in light of the pandemic and the resounding international interest in Costa Rica.  Not all buyers are willing to spend big money to buy real estate in Costa Rica. OTP realtor, Nelly Reusse, says that she has been working with many land buyers towards the end of 2021 and now into 2022 whose budgets are not in-line with the market. “We still have many people inquiring about buying land. Most want ocean view land with privacy and under $100,000.”  Of the four ocean view lots that sold for under $100,000 in 2021, three were under an acre with very little privacy and one does not have a legal water source. “It is a near impossibility to find a good ocean view lot for that price in 2022,” says Nelly. Between ocean view and privacy, privacy seems to win out — but just barely. “It’s good to have both and hardly anyone wants to settle on one or the other,” she adds. Another trend we noticed in 2021 was buyers pushing forward their travel plans, feeling the pressure of the hot market and wanting to get in before they are priced out of their dream property. OTP realtor, Marcia Oro, said that a number of the clients she worked with in 2021 changed their flights to an earlier date because of how quickly listings are being sold. “They were concerned that everything they liked would be gone by December and they purchased the first property that they saw and liked, not wanting to wait and miss out,” she says. Extra bedrooms are popular, being used as legitimate home offices for the increasing number of working professionals moving to Costa Rica. High-speed internet will continue to draw in the younger professional crowd and Costa Ballena has risen to the task.

“Why are there still so many for-sale signs if it is a seller’s market?”

There are a number of properties in South Pacific Costa Rica that are special and require the perfect person to see them and fall in love. These types of properties include jungle view lots, one-bedroom homes, and properties with minimal privacy, among others. By putting for-sale signs on these properties, sellers are giving themselves the best chance of that “perfect buyer” seeing the property. In the meantime, that sign may be up for years, adding to the appearance of everything being for sale. Because the market for real estate in Costa Ballena has increased in popularity and price, more people are putting their properties up for sale so as to capitalize on the market value increase. There are also many listers who experience unforeseen circumstances, like a birth in the family requiring grandparents to be around, or a family member has inherited a property in Costa Rica that they prefer to sell rather than keep. With a large population of retired expats, these scenarios are inevitable and properties come onto the market regularly for these reasons and not necessarily because everyone is tired of life in the tropics.

New Investments In Costa Rica

A few of our clients in 2021 sought out investors to help them make their dream business happen. Investment groups have been finding their footholds in Costa Rica for years and they are finally finding their way into the South Pacific in larger numbers.  The newest large-scale investor project is currently breaking ground in Chontales (just south of Ojochal). A recent Costa Rican news publication cited that a development company is going to build up to two thousand homes in the South Pacific zone of Costa Rica. We have gathered that they are speaking about Ventanas Del Pacifico, which is responsible for having developed a large majority of Ojochal and the communities south of it. Their next phase of large-scale development will be in Chontales and an investment group based out of South Florida that has been involved with a number condo developments in that area over the last decade will be selling spec homes in Chontales for between $500,000-$1,500,000 and developing the infrastructure of this area to support this increase in traffic. Those interested in getting ahead of the curve in Chontales can contact our team to learn about turn-key properties available for sale in this up-and-coming South Pacific village. The Costa Rican Investment Promotion Agency (CINDE) reported 103 new business investment projects in 2021 – 30% more than 2020. 41% of new projects come from countries other than the United States and include investments from Canada, Switzerland, Spain, Israel, India, South Africa, Brazil, and Chile. Companies such as Bayer, Amazon, Roche, Intel, Concentrix, Firestone, and Terumo announced expansions in Costa Rica in 2021.  Eric Scharf, President of the Board of Directors at CINDE, commented, "Results from 2021 show that Costa Rica continues to grow and consolidate internationally as a destination for sustainable investment, in line with our value proposition based on people, planet, and prosperity.” The country showcased its capacity to establish a coordinated response to avoid shutdowns and ensure business continuity in support of the needs of the foreign trade sectors. Thus, it proved the resilience and response that Costa Rica can offer to investors as a reliable destination for their global business strategies.

Ojochal, Dominical, and Uvita Rentals Market in 2021

Rentals in Dominical, Uvita, and Ojochal were largely occupied by long-term guests in 2021. Foreign buyers looking for property, home sellers who are in between selling one property and building another, and digital nomads working from home in the tropics are the biggest market for rentals today, filling many of the available properties in the area. According to data from AirDNA (an AirBnb rental analysis website), rentals in the most upscale part of Dominical, in Escaleras, receive an annual revenue of $46,000,000 USD alone, with an average nightly rate of around $400 and average occupancy of 57% in 2021. The average nightly rate for a rental in Uvita was $270 with an expected occupancy of about 48% during this time period while the average daily rate for a rental property in Ojochal was around $150 with a 43% expected occupancy rate for the month of June. Stay tuned for Osa Tropical Properties' 2022 Rental Market Report coming soon. Sign up to our newsletter to stay up to date. The United States continues to be the main source of tourists, a trend that has been maintained in recent months with a total of 732,343 international arrivals by air from January to November 2021, or 63.8% of the same period in 2019. To date, 27 of the 29 airlines that were flying to Costa Rica pre-pandemic have resumed flights into the country, while also adding new routes to key markets in Canada, the United States, Mexico, and the United Kingdom. Travel experts forecast that the travel trends poised to shape the upcoming year include the desire for more nature, workcations, active holidays, and a return to socialization – all of which can be fulfilled in Costa Rica.

Costa Rica’s Government Bolstering The Real Estate Market

By the end of 2021, Costa Rica received around 1.3 million international tourists – about 40% of the visitors who crossed the border in 2019. According to Costa Rica’s Tourism Institute, ICT, this figure is likely to increase with the start of the high season, which began in the last week of November, and will conclude at the beginning of March 2022. “It is a very important percentage considering that the pandemic is not over yet and that world tourism is experiencing the most acute crisis in its history,” said Gustavo Alvarado Chaves, Minister of Tourism and Executive President of the ICT. “The route of the reactivation and recovery of the tourism sector is gradual, and most international experts foresee that the return to the levels of 2019 will occur within approximately two years,” added the Minister. Costa Rica’s growing popularity can be directly tied to their growing reputation as a green leader in the world. In 2021’s Cop26 gathering of world leaders to talk about the environment, President Carlos Alvarado Quesada was the star attendee. Schmoozed by the likes of Leonardo DiCaprio, Jeff Bezos, Boris Johnson, and Prince William, it seems that everyone was eager to speak to President Alvarado and bask in Costa Rica’s green glow. Costa Rica is the only tropical country that has successfully halted and reversed deforestation, a commitment dozens of others made at Cop26 but are far from achieving. It is aiming for total decarbonization by 2050 – not just a net-zero target – and is helping lead the world in efforts to protect 30% of the Earth by the end of this decade. ”In 2020, 99.78% of our energy has been generated from clean sources,” President Carlos Alvarado announced. “We are at six consecutive years of generating more than 98% of our electricity from renewable sources. We advance in the line of decarbonization, which protects the environment and generates economic benefits.” According to the Tico Times, in 2020, Costa Rica has generated 72% of its energy from hydropower, 14.9% from geothermal sources, 12% from wind and 0.54% ​​from biomass and solar panels. In October, Costa Rica was among the five inaugural Earthshot prize winners for its policy to pay citizens to protect standing forests and restore ecosystems. Next on the agenda for Costa Rica is a vast new marine protected zone. All of these factors are hugely influential for real estate buyers who are impressed with the actions of the Costa Rican government, especially when compared to those of their home countries.

Cost Of Living In Costa Rica

Costa Rica is not an expensive country to live in, despite what some say. Comparing the prices of goods and services, Spain is 11% more expensive to live in than Costa Rica, the United States is 51% more expensive, and the UK is 54% more expensive. Many Latin American countries are cheaper to live in than Costa Rica but the quality of life is incomparable to the clean, peaceful, and green landscape of Costa Rica.  Although financing is limited for foreigners to purchase real estate in Costa Rica, some are able to take equity on their assets at very low interest rates in their home country and then pay cash for a home in Ojochal. Our property buyer clients are most impressed with the very low property tax rate in Costa Rica, which is 0.025%. "That is one-quarter of one percent," says Katherine, who says her clients are flabbergasted when she emphasizes this. "That is maybe a few hundred dollars a year for most home owners." However, the cost of developing a property in Costa Ballena increased in cost by about 30% by the end of 2021. OTP realtor, Richard Owens, says "material and labor shortages are responsible for this high increase due to the amount of projects that are in construction right now." https://www.youtube.com/watch?v=ls9ItRpnez8 Interview With A Builder In Costa Rica — Richard Owens Talks To David Lopez in Ojochal, Costa Rica

Advice For Buyers Of Real Estate in 2022

In a seller’s market, it is important to have an agent that’s highly responsive and efficient. You don’t want to miss an opportunity because your agent dropped the ball. Also, it’s essential that the agent has the local expertise to help you distinguish between a fair-priced and overpriced property. They will also regularly update you on new listings as soon as they hit the market and help you make a competitive offer when you are ready to buy. Our Osa Tropical Properties realtors are also armed with a number of pocket listings that have not yet hit the general market for a variety of reasons. "There are great opportunities right now," says Marcia, "to get something without the competition of being a general listing." 

May 13, 2023 in Selling Process, Buying Process, Real Estate in Costa Rica

2020 has been quite the year, no less in Costa Rica real estate. Our Osa Tropical Properties year end market review has shown our team that people still decidedly want to move to Costa Rica and their intention is only impeded by logistics. As such, like many other real estate teams, we took to a more digital approach in 2020 that has proven to help many clients of Costa Rica real estate find their way here. We know that people are very enthusiastic about moving to tropical, luxury markets in coastal regions around the world for cleaner air and a more coastal-rural environment. Everyone is searching for their own little utopia in a laidback and sunny location. Below are some of the reasons why people chose Costa Rica in 2020, a general picture of what the majority bought, and what we see for real estate in Costa Rica in 2021 amid an uncertain future.

What sold in Costa Rica real estate in 2020

New construction luxury homes in key markets like Escaleras often sold prior to completion in 2020. Property investors in Costa Rica wanted larger and more luxurious homes. We saw a 50% increase in multi-million dollar homes being built in some developments in Costa Rica and larger new luxury homes sold fastest. Real estate buyers in 2020 wanted a home gym or a yoga studio and they plan to have family stay with them. These are also the places that are booked the most frequently by the more selective travelers in Costa Rica who were seeking the most exclusive relaxation experiences in 2020. Popular properties this year have also been well-built homes on acreages. New or old, these tropical refuges offer privacy and tranquility in a place away from others. Extra space was the number one thing that real estate buyers in 2020 were looking for and buyers have wanted homes that are already built and ready to go. Our Southern Zone region has extremely low crime rates and the safety, tranquility and beauty of this location attract visitors from around the world time and again. Tourists and expats love the blend of high-end amenities with a country lifestyle. The weather is lovely year round and there are a huge amount of leisure activities amidst lush, green scenery. Closing prices have grown close to asking as the market has gone down in inventory. Since the resale market in Costa Rica is historically so strong, sellers in 2020 saw their investment in Costa Rica property as an opportunity as a strongly valued asset that offers an improvement in lifestyle with the added benefit of lower property taxes. This year allowed many seller’s to reassess their stake in Costa Rica and many have held out for full asking price or decided to take their property off the market altogether. 

Who was buying real estate in Costa Rica

In 2020, densely populated cities became perceived threats to health and freedom. Many are choosing to flee their urban and even suburban homes in favor of a less hectic pace of life with more elbow room. Many transplanted urbanites have begun working from home, making their choice to move less complicated. And these urban and suburban home sellers are cashing in on their exit plan. Foreign buyers of property for sale in Costa Rica are looking for resort-like homes that are practical and sophisticated. Americans from the US were increasingly moving south in 2020 to places like Arizona, Texas, California, and Florida, where the luxury home market continued to see skyrocketing prices and sales activity throughout 2020. As a result, those who already lived there were offered a boost in sales prices, meaning that clients of ours who were selling in those key markets were able to come to Costa Rica with greater means than they could have in the past.  Retirees who were drawn to Costa Rica in 2020 came seeking to simplify their lives while maintaining independence. Costa Rica’s universal health care is an easy and inexpensive option with excellent public medical facilities and world class private hospitals that are still generally a fraction of the cost of private medical care in the United States. Those who are choosing to spend some or all of their retirement in Costa Rica want to live in an attractive setting that doesn’t feel like retirement. Ojochal, Uvita and Dominical all have a great mix of residents that include locals, young families, entrepreneurs, and retirees. Seniors who move to Costa Rica are looking to avoid a late-life crisis by staying active and healthy in a vibrant community. According to our web analytics, people are reaching our website via searches for Costa Rica versus Panama, what it’s like to own a vacation property in Costa Rica, and lifestyle topics like gardening and raising a family in Costa Rica. The practical aspects seem to be less important to online searches although these are the questions that our team of agents would most likely field. People don’t want us to tell them what they should like and want. They seek out our help with the main logistics for how to make their dreams come true. And reading our company’s testimonial page has convinced enough potential buyers that we are a great team to trust as being helpful and in the know.

How the pandemic affected the sale of properties in Costa Rica

The year 2020 started out strong in our local real estate sector with a lot of tourists visiting our region and plenty of interested buyers of Costa Ballena real estate. Around March is when the pandemic started to impede travel into and out of Costa Rica and offers to purchase that were on the table before that largely fizzled out. A lack of certainty in various economic markets and in the ability to travel took all of the growing certainty in the value of investing in Costa Rica out of the picture. But this year has also taught many people that a long time being forced indoors and away from others has given them a different perspective on their priorities. People who contacted us in 2020 knew that they wanted to be in Costa Rica. They wanted an escape plan, whether they were ready to move here full time or desired to have a place in reserve. A large reason for people wanting to secure a property in Costa Rica is because they have heard that this small country has handled the pandemic swiftly and with relative ease. There have not been huge spikes in cases like in neighboring Latin American nations. Panama, for instance has had 80,000 more cases than Costa Rica with almost twice as many deaths despite having only 4/5ths of the population of Costa Rica. Hospitals in Costa Rica have also been managing caseloads well. Costa Rica is also one of the first nations offering its adult population of citizens and residents the opportunity to receive the Covid-19 vaccine’s 2 doses before the end of 2021, although it will not be a requirement. Frontline workers, those over 58, and those with underlying conditions will be first on that list to receive the vaccine. In spite of Costa Rica’s relatively tranquil circumstances this past year and international borders opening completely in November, people around the world largely chose to hunker down and forego travel. The cooling weather and the new wave of virus cases have created stronger lockdown scenarios around the world meaning that even though people can travel fairly freely when in Costa Rica (while abiding by national sanitary requirements), they would be subject to stronger quarantine measures when returning home. This has resulted in most potential buyers hesitating to travel at the moment if they will be required to quarantine for a length of time upon returning to their home country.  However, those who are desperately seeking to live a better life on their own terms chose Costa Rica in 2020. This year heightened a strong global desire for more space. There have been mass exoduses from many urban centers all over the world and a big trend for people moving to suburbs and more rural areas. Those who can get away with taking things a few steps further via remote work or early retirement still chose to try a life in the tropics. During this pandemic, we learned in Costa Rica that if we keep things local and stay mostly within our small communities that we can retain a sense of freedom. Whether this pandemic lasts a few more months or years, those of us who have spent enough time in the South Pacific, especially this past year, feel fortunate to have been away from the majority of hysteria. Our universal health care system is not overrun with Covid cases and it seems that the fresher and healthier lifestyle that people in the tropics tend to live has helped our situations. The silver lining of coronavirus in Costa Rica real estate is that it has decreased the number of window shoppers. Both potential buyers and agents are taking extra precautions and so people touring properties are seriously interested in purchasing. Realtors and sellers know that they are potentially risking Covid-19 exposure and have been taking significant steps to stay safe, including wiping down all home surfaces. This has made realtors in Costa Rica more likely to qualify buyers before spending the extra effort to show properties, focusing instead on creating virtual property tours. These video showing of homes and lots in Costa Rica have helped potential buyers get a feel for walking through a property even though they can't physically be there.

What we predict for Costa Rica homes and lots in 2021

A Costa Rica realtor’s main role in 2021 is likely to continue to develop into helping buyers find a desired property, as well as negotiating a price. Clients are less interested in learning about a neighborhood from the agent, having already likely researched an area before contacting an agent. For this reason, we continue to find our weekly blog posts and our video tours very helpful in reaching potential buyers who want to get a feel for this region before reaching out to an agent. Alongside this more distant role, virtual tours and communication will continue to expand. Affluent consumers are making more health-driven lifestyle choices that will continue to share the luxury real estate market and fuel growth for residential properties that can improve their quality of life. Coming back to the city will be difficult after living in what was your second home. If people find that they can continue to work and socialize from home in a flexible way, it is likely that second homes will become the more permanent primary residence, at least until the pandemic subsides.  Realtors are predicting even more vacation home purchases in 2021. People are vacationing differently than they were before. There is a bigger focus on privacy, cleanliness, exclusivity and luxury. A good vacation home can provide the confidence and travelers will always return to a clean and safe place. And a good, consistent rental income can offset the expenses associated with second home ownership. This means that our second-home markets will continue to see buyers, even in the off-seasons. Work from home has allowed people new flexibility to enjoy perks of resort life on an ongoing basis, not just during vacations. Kitchens and bathrooms are helping to sell homes now more than ever and we predict that these qualities will only increase in demand. With people spending much more time at home, kitchens are becoming higher traffic areas. This has increased the demand in kitchen remodels, with many people favoring minimalist aesthetics.  For the same reason, extra bedrooms are becoming legitimate home offices and the stronger WiFi connections that you can have at home in Costa Rica will continue to draw in the younger professional crowd. Temporary sofa or kitchen table setups aren’t cutting it anymore and working from home takes on a whole, new, positive aesthetic when your workspace is in the tropics. People will also continue focusing on decluttering in 2021 due to spending more time at home and homebuyers are prioritizing more space for storage purposes. Organized spaces can help boost productivity and creativity while reducing stress and anxiety. Social distancing continues to inspire many to rediscover their love for nature. Decks and patios are being put to good use. Having a great outdoor space makes it possible to get a change of scenery without leaving the property. Garden spaces and outdoor entertainment areas will continue to rise in popularity while also making our homes feel like a safe sanctuary.  Costa Rica is poised to continue to be a place to flirt with your dreams and desires again in 2021. So much so that it was recently named the #1 retirement destination on the planet by International Living. Based on reports of our 2020 real estate clients, if you can find your way here, we can almost guarantee that you won’t want to leave. 

May 13, 2023 in Tips for Sellers, Tips for Buyers, Real Estate in Costa Rica, Life in Costa Rica, Discover Costa Rica

There are a few differences between homes used as Costa Rica vacation rentals versus the ones that people live in year round.

May 12, 2023 in Life in Costa Rica

On Saturday, August 1, 2020 a new phase began in the government's plan for tourism in Costa Rica, which will alternate openings and closings as a way of finding a balance between public health and the health of the economy. Costa Rica received its first international commercial flight in four and a half months on August 3rd, 2020. This is the first of a small number of flights planned to come into the country since a state of national emergency was declared by the SARS-CoV-2 pandemic. A gradual opening is being proposed with a limited number of flights coming into Costa Rica from the European Union, United Kingdom and Canada. The hope is that this limited reopening of the borders will bring optimism to the micro and small companies that depend on tourism in Costa Rica while taking measures to keep safe the Costa Rican population in these pandemic times. A negative COVID-19 PCR test from within 48 hours of flight time is requested of all passengers and crew members. Passengers and crew must wear masks in the terminals and on the flight, as well as keeping social distance where possible. Travel insurance is also mandatory to cover accommodation in case of quarantine and medical expenses for acute illness. Those arriving in Costa Rica are asked to fill out an epidemiological form and receive temperature measurements. As an exception to the rule, the Costa Rican Health Chamber donated 13 PCR tests to the tourists on this first flight, which came from Spain, who did not meet this requirement in their approach. The test was applied upon arrival on Costa Rican soil and an isolation order was issued for 24 hours until the test showed a negative result.

A New Style of Tourism

Mass tourism will likely be a thing of the past and Costa Rica is changing its efforts to take better advantage of the country’s natural riches for this new tourism paradigm. The National Chamber of Ecotourism and Sustainable Tourism of Costa Rica (Canaeco) indicated that the country is ahead on this front, having declared 25% of its territory to be national parks and 50% of Costa Rica's landmass already reforested. Costa Rica also boasts a national energy grid that runs on almost 99% renewable energy annually, for which it is internationally acclaimed. The first big change that tourism in Costa Rica will experience is the need to guarantee sanitary security and protocols for tourists to feel protected. There will also be an increased demand for small lodgings, less crowded destinations, high expectations for clean and open environments, and private experiences. Tourists will be thinking more about how the dollar they invest benefits the communities they reach. Therefore, it will be important to show how different community sectors participate in tourism activities and the impact of the ecological footprint it generates.

Opportunity for Wellness Tourism

The crisis caused by the COVID-19 pandemic has created a golden opportunity for rural tourism entrepreneurs, especially those who can offer a wellness experience. There is a large niche of tourists willing to pay for these services and Costa Rica has great opportunities to project its strength in this area. Treatment centers, spas and tourist activities such as open-air experiences that take place on organic farms, chocolate or coffee tours, hot springs and forest baths are just some of the quality tourism experience that Costa Rica already has on offer. Companies that feature this natural potential will likely find that they have the biggest draw for tourism. Quality will be the differentiating element.

Differentiation is key

Mauricio Ventura, former Minister of Tourism of Costa Rica and President of Sinergia Consulting Group, says that the reactivation of the tourism sector is an essential issue. Opening of airports and aid to entrepreneurs are a start but we must look further. “COVID-19 transformed everything and makes us think that it is time to take advantage of the crisis. There are three phases: rescue companies, guaranteeing access to sources of capital; implement sanitary protocols permanently; and promote a national tourism campaign.” It will be essential that Costa Rica take advantage of the biodiversity, culture and the offers of small and medium-sized companies to attract tourists. Mr. Ventura suggests that the future tourism trends in Costa Rica are likely be:

• Sanitary and biosecurity protocols in the facilities
• Small lodgings and boutique hotels
• Personalized gastronomic experiences
• Personalized tours in social bubbles
• Incorporation of technology to avoid contact with objects
• Humanize experiences
• Show the social impact of the operation on the communities and the ecological footprint
• Less crowded destinations
• Outings in less crowded seasons
• Green tourism with sustainable certifications

May 12, 2023 in Buying Process, Real Estate in Costa Rica, Tips for Buyers

Real estate in Costa Rica may have slowed in 2020 like in almost every global market since the borders closed to world travel.

May 12, 2023 in Real Estate in Costa Rica, Tips for Sellers, Tips for Buyers

Home financing in Costa Rica is a topic that is being asked about more frequently by buyers contacting our Osa Tropical Properties real estate office. The thing is, there is not a simple and straightforward answer. Buying real estate in Costa Rica with cash is still the easiest and best option. Cash gives buyers the strongest negotiating position when presenting an offer. On the other hand, those expecting to buy a property in Costa Rica with a loan are likely to be disappointed by the term options, which all have high interest rates and short durations. But private home financing offered by the seller is a third option that falls somewhere in between and it can actually be favorable to both buyers and sellers in the right circumstances. Below is a detailed guide to home financing in Costa Rica for both sellers and buyers to discover if this approach is right for them.

The Advantage for Sellers to Offer Private Home Financing in Costa Rica

Costa Rica properties are in hot demand right now from people all over the world who want to move somewhere new that is charming and unadulterated. But these properties are not available immediately to everyone who wants to purchase them. Some potential buyers are stuck in a low liquidity scenario where they need to sell their current residence to purchase their dream property in Costa Rica.  Home sellers who are able to offer private financing are turbo-charging their listing for faster closings and better terms. These sellers are typically in a position where they are not reliant upon receiving an immediate influx of cash from the sale of their Costa Rica property. Sellers who finance are able to set their own terms that may include significant financial windfalls from the loan interest rates over a short amount of time but still be win-win for both parties.

Seller Expectations When Offering Private Home Financing in Costa Rica

Private seller financing became an alternate option for buying property in Costa Rica because the process for getting a mortgage with a bank in Costa Rica is arduous. To apply for any loan in Costa Rica requires the translation and verification of all of your financial records from anywhere you have lived. Sellers offering private financing tend to have lesser requirements for the type of documentation they expect to see. They will not likely request an evaluation of the asset because they know the value of the property that is being leveraged. Some sellers might request proof of income or a credit report, whereas others will not. Sellers who choose to offer financing as an incentive to close a sale are foregoing what would otherwise be a cash lump-sum sale. The flexibility of the seller’s financial position will determine the terms of financing that they are willing to offer, which can be more strict than a buyer may expect. The strength of the seller’s position, based on their property and the current health of the global financial markets, will determine if the seller’s financing conditions can captivate a hungry audience who need a small boost to make it to their pura vida.

Typical Terms of Private Home Financing in Costa Rica

Short-term private home financing is on demand with many buyers looking for the easiest way to buy their dream home. The typical terms of private home financing in Costa Rica that most buyers and sellers find agreeable are: 

• Somewhere between a 1 - 3 year term;
• At an interest rate of 5% - 8% (has been know to be up to 12% in other parts of the country); 
• With at least a 50% down payment. 

In almost every instance, the buyer will agree to pay full price or very close to full price in exchange for finance. Terms can include monthly interest payments, quarterly, bi-annual or annual. Capital payments are always due at the end of the term of the loan but a seller could also negotiate for them to be paid regularly throughout the loan period plus one or two “balloon payments” throughout the term. There is always a clause for penalty on late payments, which may include the property defaulting to the seller. It is common that the one receiving private financing in Costa Rica pays the mortgage costs. These are equivalent to 0.25% of the value of the mortgage in registration fees and 0.53% in documentary stamps. The notary will also charge a fee for drafting the mortgage, which can range from around 0.5% to 1.25% of the mortgage amount. Our office has also seen one zero-interest private financing loan that worked out favorably for both parties. In this scenario, the buyer agreed to pay full price on the property, whereas a cash offer was likely to be reduced, and the seller was in the position of not needing a lump-sum payout.

Other Ways to "Finance" a Property in Costa Rica

A home buyer can finance a property in Costa Rica by getting a line of credit in their home country and paying cash for their tropical house. This option will give a buyer cash in hand, which gives them a better negotiation position. Cash offers traditionally result in better discounts off of the list price of a property. There are also private financing companies like Loans Costa Rica, which offer loans to local and foreign individuals, businesses, and corporations on real property in Costa Rica. The terms and conditions of these loans vary slightly depending on the type of property, loan to value, and the use of funds.

Things to Consider Before Offering Seller Financing

Sellers of real estate in Costa Rica will need to know the truth about the buyer’s situation before agreeing to finance. They will primarily want to know if a buyer will be able to meet their payment obligations and how the buyer intends to use the property during the term of the deal. A seller would also want to make sure that the terms of financing are contingent on the buyer accepting the property “as is” after the due diligence period — with no exceptions. Sellers offering financing in Costa Rica will use a mortgage to secure the transaction (we have also heard of trusts being used but they are far less common). In case of default, the property either goes to auction or returns directly to the ownership of the seller.

Should a Seller Offer Home Financing as an Option?

Although our office has been included in a number of deals using seller financing, it is still a rare option to which a majority of sellers will not agree. But these numbers have increased considerably in the last two years and we expect to see more deals like this soon with the growing demand for properties in Costa Rica. With the right terms, financing makes a property more sellable, putting it more within the reach of buyers with low liquidity. This does not mean that offering private financing in Costa Rica is customary and it is not our goal to advocate for financing one way or the other. Seller financing is a creative process that varies in each deal. Our goal is to help buyers and sellers uncover their individual needs, to see if we can negotiate a win-win solution for both parties. 

May 12, 2023 in Tips for Sellers, Tips for Buyers, Real Estate in Costa Rica, Discover Costa Ballena

If you’ve been receiving our newsletter about Costa Ballena real estate for longer than a year - firstly, thank you very much for subscribing and reading! We value our newsletter database immensely and we get a lot of great feedback so we hope you’ve enjoyed yourself and learned a few things about our real estate market along the way. Secondly, if you’ve been reading for a while, you may have noticed a significant uptick in the number of new listings coming out in the first month of 2020. That’s because we saw an increase of over 43% in new listings in the Costa Ballena over January 2019! This is huge news and a sign of seller confidence in listing properties in our South Pacific region of Costa Rica. Read on to learn about what might be inspiring growth.

Economic Confidence in Costa Ballena

For a period of about 6 months after last year's high season (December to May), new listings seemed to take a dip. Inventory was low after a big selling season and developers took the opportunity to build spec homes and condos in 2019. It appears to our Osa Tropical Properties office that developers and other property sellers in 2020 are taking the example of last year and listing their properties in Costa Ballena at the start of this high season. This will ensure that their property is positioned at the top of most local real estate websites and seen by the largest amount of new buyers.

Increased Tourism in Costa Rica in 2020

The growth in tourism in Costa Rica may also be a significant factor in inspiring seller confidence in our South Pacific Costa Rica real estate market. Throughout Costa Rica, 3.1 million tourists visited the country in 2019, signifying a 4.1% growth in tourism over the previous year. More than half of those tourists came from North America and the majority from the United States, which on its own experienced a 5.5% increase in visits here. And tourism from Canada represented more than 8% growth over 2018.  Half a million tourists in Costa Rica originated in Europe in 2019. The European countries that represent the highest contributions to Costa Rica’s tourism industry are Germany, the United Kingdom, France, Spain, and The Netherlands. Each of these countries has regular direct flights to Costa Rica and more are planned in the near future. Also in 2019, 2% of travelers to Costa Rica were from Asia and the Pacific.

Importance of Tourism Industry to Costa Rica

Tourism is one of Costa Rica’s economic pillars according to the government. Tourism accounts for 20% of Costa Rica’s total exports, which is why the government spent a record amount on international promotion throughout North America and Europe. Most tourists to Costa Rica arrived by air in 2019 and nearly two-thirds of those transited through Juan Santamaria Airport. The Costa Rican government plans to invest $160 million through 2020 to improve the nation’s largest airport’s infrastructure to support and increase this growth. Daniel Oduber Quiros International Airport in Liberia experienced an increase of 8.5% visitors transiting through in 2019, with the expectation of further growth in 2020 after several new flights are inaugurated in the coming months. Costa Rica’s growth in tourism exceeded the global average of 4% according to the World Tourism Organization. This growth comes in spite of unfavorable international economic scenarios like Brexit and strained US trade relations. President Carlos Alvarado stated last week that “Costa Rica is a world leader in the field of tourism, which is a fundamental pillar for equitable development, economic activation, and job creation.” Roughly 5% of Costa Rica’s population is employed in the country’s tourism sector in 2018. Foreign visitors in 2019 stayed for an average of 12.6 days and spent roughly $1,400 USD each. They came mainly to visit beaches, volcanoes, and national parks.

Rental Homes in Costa Rica

Rental homes are the most popular way that tourists are enjoying our South Pacific region of Costa Rica, according to Christine Schiferl of Jaguar Property Management in Uvita. She says that she has seen her business shift in the last year, moving steadily towards the luxury rentals market. In the last year, Costa Rica introduced new tax reforms, a new IVA tax, and digital receipts, meaning that business owners following the law have needed to increase prices. This has reflected in the type of tourists visiting Costa Rica. What used to be hippies and surf bums visiting the South Pacific have become luxury ecotourists. Schiferl has noted a particular increase in Europeans visiting, especially from Switzerland and Germany, with aesthetic sensibilities that primarily lean towards contemporary, with clean lines and premium details. "If you want to have a successful rental in Costa Ballena," says Schiferl, "you have to stand out in the crowd and have all of the right boxes checked. Think oceanview, close to town, private, and an all-around beautiful home." She believes that luxury rental homes in Costa Ballena that have all the right bells and whistles have the highest occupancy rates. "Our top three rental homes right now are seeing 90% occupancy rates and each of them has all of the things a guest could want in a luxury rental home in Costa Ballena."

Costa Ballena Real Estate Market in 2020

Our local Costa Ballena real estate market (including Dominical, Uvita, Ojochal and beyond) has been inundated with tourism at the start of 2020 with no appearance of slowing down. Local confidence in the market is being expressed by a number of new restaurants opening and by the number of potential buyers that we have contacting our office looking for income properties. Sold listings in the Costa Ballena last month increased by 12.5% over January of last year. The properties selling in our region in 2020 so far are mainly homes and lots under $250,000, showing that foreign market confidence is low for making large investments at the moment.  But following the typical pattern of new buyers in Costa Rica, the growth in tourism to our region bodes well for creating future demand for homes. Over the years, we have noted that the vast majority of buyers begin as tourists who fall in love with our region on sight and head home with the burning desire to return for longer, with a few committing right away to purchasing property sometime in the near future. If this pattern continues, we can expect an increase in property sales in our region in the coming year. 

May 11, 2023 in Tips for Sellers, Selling Process, Real Estate in Costa Rica

Since we have recently achieved a balanced market in Costa Ballena real estate--where sellers and buyers are now fairly equally numbered--we want to share with our sellers what it is that we’re doing to bring buyers to their property listing in Costa Rica.

We’ve been having much success with selling our office's listings in recent months. For instance, we have had five accepted offers in the last 4 days! Even so, we do regularly show the listings of other agents. And buyers are more regularly walking into our office, bypassing a multitude of our competitors in Costa Ballena real estate. What we think is bringing buyers directly to our office is our growing ability to communicate a 'local expat lifestyle' to them and a good business ethic from us. Let me explain...

A bit about our office

At Osa Tropical Properties, we are a team who are dedicated to selling our own and each others’ listings within our office. We are selective about the listings that we take as an office, knowing full well what we can and cannot sell. We preview listings daily and we discuss listings every week in our team meetings. Our goal is to make sure that the listings we do take fit the criteria that we know buyers want.

Our team's ethics

As a team, we practice honesty and integrity with our clients. We share with buyers all of the real details that we know about life here, and give them council about which properties we expertly believe will suit them best. And we show our sellers integrity by communicating all feedback about their property and providing regular, expert council about how to manage the listing. When it comes to things like pricing, we approach our sellers with the data to support how and why we have determined that a price is correct for the current market, or for the time frame that our sellers dictate.

In-depth market knowledge

We regularly share with sellers and buyers what is happening in the market. We write monthly market reports, share developments in the community, and regularly communicate with our clients directly about issues that are valuable to them and their investment. Our weekly updated blog is a great resource for buyers and sellers alike who want to know about what’s happening in Costa Ballena real estate. The Costa Ballena is a special market and updates from other markets in Costa Rica don't always apply--and you won't find another local real estate market report as regular and thorough.

Keeping an organized office

Real estate agents must be organized and consistent to be successful. We have a stacked marketing plan that includes calendars, due dates, and regularly schedules programming that keeps us busy every week. Our goal is to communicate the needs of our clients, which are primarily our sellers. When we have a roster of properties for sale that are priced and positioned well by us, we tend to find quick success with finding buyers for them because of our great marketing abilities. Buyers are being regularly updated with new properties for sale via our weekly newsletter to our database, daily posts on social media, lifestyle stories, interviews with local expats, digital flyers, magazine ads, agent walk-through videos, professionally produced listing videos, and lifestyle videos selling the area, which regularly feature our listings in them.

The business of real estate

As real estate agents, we don't earn a steady pay check. We earn our income as a commission based on our services. Like any good small business owner, we are tending to our existing clients and going out looking for new clients every day.   Our team is driven. Take a look at our recently sold page and you will see how many of your neighbors bought or sold through us. It is our business to council and help sellers reap the full benefit of their Costa Rica investment. And we make it our business to find the buyers who we know will love their lives in this region. We spend time, money and effort every day finding these buyers and learning how to speak to them in human and technological ways. Our SEO for real estate in the South Pacific of Costa Rica is growing fast.

Want to know more about the real estate market in this region and what our team can do for you? Contact our office by phone or email any time. We will cater a listing presentation at your leisure detailing all of the specific services that we offer our clients. We will work out a marketing plan that is right for your listing using all of the tools listed above, and more.