www.CostaRicaTicas.com :: View topic - Who Is Watching CR Real Estate Prices?

If you watch the properties at CR-home.com (a fellow Minnesotan) he has said that people have been offering him condos for 15-20% less than they paid for them.

Think the best way is to find your area(s) then just have to question people up then visit local tax office. Maybe with small propis they could help you out.

I've been looking at properties in different parts of C.R. for 2 years now and I still see some of the same houses I saw listed a year ago and in most cases sellers have not lowered their prices (I think they're in denial).

Couple of things to remember. There is no licensing of real estate agents in CR. Print up some business cards and presto you are a realtor :shock:

There is no MLS. All listings are pocket listings. :shock:

Real estate sales people routinely get a Tico to give them a sales price and then double it to the buyer giving the Tico what he asked for and pocketing the rest :shock:

There are no legitimate "comps" in CR :cry:

the sales price listed in the documents is the lowest possible, to reduce taxes, and has no bearing on the true sale price :roll:

You have to live here at least six months before you have enough knowledge to even begin to look.

Always remember: The one person who will absolutely always screw the gringo is.........................................

ANOTHER GRINGO :!:

Author:	Foos [ Thu Jul 17, 2008 10:29 pm ]
Post subject:	Who Is Watching CR Real Estate Prices?
On my last trip in feb 08 everywhere we went we saw hundreds of for sale signs on properties, both homes and condos. The towns around the area we liked the most (Playa Flamingo) had literally every house with a sign. My belief is that the US economy is making a lot of people who invested in CR real estate very nervous as the prices seem to be dropping. If you watch the properties at CR-home.com (a fellow Minnesotan) he has said that people have been offering him condos for 15-20% less than they paid for them. My feeling is that in 1-2 years the prices may be back to mid 90's levels. What is your opinion? and why? BTW we never saw any sold signs at all. Foos Trip 1 CR jan/feb 2007 7 days (way too short) Trip 2 CR jan/feb 2008 17 days (still too short) Trip 3 CR Jan/feb 2009 one month Trip 4 CR 2010 hopefully a snowbird for the winter

Author:	Puro Party [ Thu Jul 17, 2008 10:52 pm ]
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I don't know for certain today but in one of the pybs (Tico Times, AMCR etc.) they mentioned how RE sales are not recorded/tracked like they are in the US so very hard to track. Think the best way is to find your area(s) then just have to question people up then visit local tax office. Maybe with small propis they could help you out.

Author:	Nucknfuts [ Fri Jul 18, 2008 12:05 am ]
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The best advice ever about buying property is , LIVE there at least six months before you even consider buying. Tha Nuck

Author:	LAdiablo [ Fri Jul 18, 2008 12:34 am ]
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classic ripple effect. have heard beach areas are getting hit a lot harder. then again there has been too many builder/speculators in recent years overbuilding the coast. imo the american market is going to continue to decline and even if it hasn't had the same hard declines, costa rica is bound to have some bargains in the next few years. i plan on just paying attention like the op.

Author:	BondTrader [ Fri Jul 18, 2008 12:47 am ]
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The U.S. market is "efficient"...that is..it's relatively easy to determine what the real value of a home is based on sales records etc. The C.R. RE market is "inefficient" and it's far more challenging trying to determine whether a house that's listed for $300K is worth that or $250K or $175K. We've all heard the stories about Gringo pricing vs. Tico pricing. Given that the soaring home prices over the last decade have been driven in large part by Americans and what appears to be massive overdevelopment (take Jaco for instance), I have to believe values must be SIGNIFICANTLY lower than they were a year or 2 ago and that one who takes their time and does their homework can likely find some great bargains. I've been looking at properties in different parts of C.R. for 2 years now and I still see some of the same houses I saw listed a year ago and in most cases sellers have not lowered their prices (I think they're in denial). With patience I'm confident one can or will find some real values.

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Author:	Bilko [ Fri Jul 18, 2008 1:06 am ]
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I think there will be a trickle down (up?) effect eventually, but what I see advertised is still pretty overpriced. The scene here is so chaotic and unstructured it's very hard to decide what is a bargain and what isn't. In the USA the prices are falling fastest in the low end, especially in Florida, California, Nevada and a few other bubble areas. Foreclosures are making up over a third of existing home sales, much more in some areas. Prices are falling but not as fast in the top end neighborhoods. I would say a lot of the stuff down here that appeals to Gringos isn't low end. Low end here is still cheap. What I find hard to take is how outrageous land prices are here. I bought 2 and a half acres in California for under 20k in the late 90s. Here, 20k won't even get you a tiny lot on most areas. Especially in Gringo developments you can pay more for a lot where the utilities or roads are 'coming soon!' I have dim hopes of buying a nice place away from San Jose but I don't see prices as being a good deal, not yet at least. I do think that as prices fall in the USA, which I suspect will continue a few more years, eventually the market here will catch up and get realistic again. Or maybe I'm doing a bit of wishful thinking.

Author:	Junkyard Dog [ Fri Jul 18, 2008 7:35 am ]
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A year ago and also last jan-feb I was seriously looking at condos in Jaco. Jaco and the extended area around it I perceive to be the best place to invest as its closer to the airport and SJ and has relatively decent infrastructure. The big plus is that the major condos there have the weekly rental programs to rent to the tourists a week at the time so it would be available to me 3-4 weeks a year and then theoretically rented most of the rest of the time. I looked at several of the under construction hi rises and was hit with the classic hi pressure sales approach "you gotta buy now or miss out". All of the agents exept one said that the USA slowdown has had no effect because the europeans were buying in droves. I kept gently prodding them that I thought the USA market had to have a effect on CR and finally one of the agents admited that it was slow and there really were a lot of unsold units. I decided to hold off as I cant see how without massive additional tourism that they can keep all these new hi end units rented. And their weekly rental fees are 25-30 % of the take which is far more than I was paying for my oceanfront condo rental in Va Beach until I sold it last year. I was paying 12% a week plus cleaning fee. I dont know the actual number but there are a LOT of hi end condos in constrution in Jaco and the surrounding area of which I beleive have the possibility of being bought cheaper unless the USA economy turns. And what appears to be the grandest of them all is the Sonesta Resort which I would not consider because it is a mile from the beach. I cant figure why they build it so far away. But then again I could be very wrong and in 5 years be sorry I was skeptical of the agents lofty claims. But once again I just cant see how the USA slow market with all the people who want to buy in CR cant because they cant sell thier property in the USA. But maybe I am nuts, wouldnt be the first time I missed a golden opportunity. JD

Author:	Georgee [ Fri Jul 18, 2008 10:11 am ]
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Quote: If you watch the properties at CR-home.com (a fellow Minnesotan) he has said that people have been offering him condos for 15-20% less than they paid for them. It's not easy to sell an older condo. Especially in Jaco there are so many condos under construction that makes it difficult to sell an older condo. I know of some people that wanted to sell theirs in Jaco and move to a quieter place, but they are not able to get a good price for it. So it is logical that they will loose at least 15% in an overdeveloped area like Jaco.

Author:	Complex09 [ Fri Jul 18, 2008 12:17 pm ]
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I do not think that prices will ever go back to mid 90's prices. The housing bubble was not limited to only the US but a world wide phenomenon. This was spurred by several causes - easy loans, speculators and plain "herding" stupidity. I would expect the prices to level out where they correctly should be, around 6% above the selling prices for 2001. How long it takes to get back there is going to be interesting, and as the magic eight ball says "too soon to tell, ask again later." I can not agree more than with F@ckNnuts above who recommended for you to live there for at least six months before buying. To do anything else would be perpetuating the real estate problem and potentially putting your investment money at risk.

Author:	Nucknfuts [ Fri Jul 18, 2008 12:45 pm ]
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The U.S. housing market has a loooooooong way down to go. It is simple arithmetic. The price of houses were selling for WAY more that what the people could afford. ( Giving out crazy loans "interest only") Now people have to really qualify for their loans. So either wages either need to go up. ( and in this economy I don't think so ) Or, The prices of houses have to come down to where people can afford them. ( Very likely ) Tha Nuck

Author:	Nucknfuts [ Fri Jul 18, 2008 12:56 pm ]
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One good story, A real-estate person I know went to Tamarindo area and looked into buying a condo. They were running about $450k She also looked into how much rentals were and did the math and it worked out that it was MUCH better to rent. You could take that $450k put it in an interest bearing account and have enough to pay for the rent and have a lot of $ left over. Don't get caught up in the GRINGO hype. Tha Nuck

Author:	Irish Drifter [ Fri Jul 18, 2008 1:36 pm ]
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Jester wrote: Think the best way is to find your area(s) then just have to question people up then visit local tax office. Maybe with small propis they could help you out. Property sales are registered at the registro. However that is no help in determining prices because no one reports the actual selling price to them in order to avoid taxes. There is no MLS so it is virtually impossible to find the real selling price of a property in order to get comps. BondTrader wrote: I've been looking at properties in different parts of C.R. for 2 years now and I still see some of the same houses I saw listed a year ago and in most cases sellers have not lowered their prices (I think they're in denial). There are many properties in Costa Rica that are supposedly for sale but in reality the owner has put a ridiculous price on his property hoping some uninformed gringo will come along and buy it. There is no incentive in that scenario to lower his price since the property is really not for sale in the traditional definition of that term.

Author:	Nucknfuts [ Fri Jul 18, 2008 1:46 pm ]
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Also, Make sure you deal directly with the owner. In Costa Rica there are Agents that find properties for X amount , then find Gringos and tell them they have found a GREAT place at a GREAT price then mark the HELL UP on the price ( there is no limit ) whatever they think that they can get away with. Say they find an owner that wants $50k for a piece of proprty and the agent tells you it's $115k and you buy it, the agent pockets $65k If they can get you to pay they keep ALL the extra. It is truly the wild wild west out there. Be forewarned.. Tha Nuck

Author:	Irish Drifter [ Fri Jul 18, 2008 2:02 pm ]
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I posted this in a thread last November and believe it is applicable to this thread. Irish Drifter wrote: Couple of things to remember. There is no licensing of real estate agents in CR. Print up some business cards and presto you are a realtor There is no MLS. All listings are pocket listings. Real estate sales people routinely get a Tico to give them a sales price and then double it to the buyer giving the Tico what he asked for and pocketing the rest There are no legitimate "comps" in CR the sales price listed in the documents is the lowest possible, to reduce taxes, and has no bearing on the true sale price You have to live here at least six months before you have enough knowledge to even begin to look. Always remember: The one person who will absolutely always screw the gringo is......................................... ANOTHER GRINGO

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Author:	PacoLoco [ Fri Jul 18, 2008 2:08 pm ]
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According to word on the street the HDR has dropped from 25 million to 21 million so yes real estate prices are dropping and this hotel is a bargain. If interested I want 20% commission.