The Costa Rica Real Estate market for the investor is largely driven by tourism. Your return on the investment is from the tourist that rents your condo.

With the USA downturn, it is certain that tourism will have a setback as well. As we all  work our way through this major financial problem, it is heartening to know that Costa Rica has been chosen three times as then top tourist destination by the USA tourism industry.

For the Costa Rica Beach investor, it probably will lead to lower returns for a while, but with our reputation and being the number one choice, it follows that Costa Rica will get a large share of what is out there.

The following is reprinted without non text images.

The United States tourism industry comprised of 180,000 readers
belonging to organizations such as travel agencies, hotels and tour
operators chose Costa Rica as the #1 tourist destination in Latin
America again. This is the third year that Costa Rica has received the
honor after doing so in 2004 and 2006. Magazine Travel Weekly delivered
the award to the Costa Rica Tourist Board (ICT in Spanish) and presented
to Minister of Tourism Carlos Benavides at the International Tourism
Fair, held in Spain.
The ICT was created in 1955 and is an autonomous institution of the
government, responsible for regulating tourism activity and promoting
Costa Rica’s tourism attractions and destinations both at a national
and international level.

During 2007 Costa Rica’s national tourism industry increased by 11.5%,
with 1.9 million international tourist arrivals. Revenue generated by
international tourists reached a historic high of US$1.9 billion, up
US$300 million from the previous year. In January of 2008, tourism
increased again by 13.7% in tourist air arrivals according to data
gathered by the ICT.

Expansion began last year with U.S. and European airline companies
including Spirit Airlines, Frontier, Champion Air, Sunwing Airlines,
First Choice, Air Caraibes, and Air Comet serving Costa Rica. Hilton,
Marriott, Crown and Express are among some of the hotel chains that
decided to invest in Costa Rica’s tourism industry.

For US travelers, Costa Rica is an exotic destination that is much
closer to the U.S. mainland and therefore more affordable in comparison
to European and Asian destinations. Visitors from the U.S. represented
54 percent of the overall 1.9 million tourists who came to Costa Rica
last year.

For more information regarding the state of Costa Rica investment properties, contact us at COSTA RICA RETIREMENT VACATION PROPERTIES
OR CALL 1 888 581 1786

If you have been confused about the USA election, wondering where all this is going, what does the future hold and how will it impact on you, then read on for a serious amount of information that will tell you how fast change occurs in this point in time.

This will renew everyone’s perspective no matter what your field of endeavor. It is the most riveting thing I have seen in a long time in one place.
Go HERE  and watch this video that was produced for Sony executives in June of this year.

Costa Rica Retirement Vacation Properties feels this is a good watch for everyone.

An observation by Homes Overseas magazine

Now is a good time to negotiate a property purchase in Costa Rica, in light of the slow market, according to Gary Sheriff of property agency C.R.UK. Global.

Fueled by rising tourism and retirees from North America, Costa Rica’s property market has boomed over the past decade, with prices recording up to 300% growth over the past decade across some parts of the country.

However, with a number of new-build residential developments nearing completion, coinciding with a significant fall in demand, in light of the economic woes experienced in nearby America, the country’s property market has come to a shuddering halt.

With no direct flights operating from the UK, Brits have often overlooked Costa Rica as a holiday home and retirement destination. However, Sheriff, a Brit who now lives in Costa Rica, says that Brits are missing out on a better way of life.

“Costa Rica offers fantastic year-round good weather, a stable government, wonderful food, and low cost of living – not to mention excellent education and health care.

“There are a number of new high-end housing developments coming onto the market across Costa Rica, and yet there is now a lack of buyers. This presents potential purchasers with a great opportunity to negotiate a discount on a Costa Rican home bought now.”

Sheriff says, Costa Rica  Real Estate markets to watch are, the Guanacaste province and San Jose Central Valley as great places to buy a holiday or retirement home. However, he warns people to steer clear of the North Pacific, where there is now “an oversupply of properties.”

Mortgages in Costa Rica are currently available to foreigners at a maximum 70% loan-to-value.

There is no doubt that Costa Rica Real Estate market will be impacted to some degree on what has happened last week. That came right out of left field.

Since their is no mortgage crisis here and our Country is not tied to the major USA financial institutions, we stand a good chance of weathering this storm quite well, in fact better than others. We need to focus on good Costa Rica Real Estate value for our clients. (that applies to all price ranges)

In case you didn’t see this article from our Tico Times, I have published it for your viewing.

Special to The Tico Times….. also read below this article on value in Costa Rica

As world financial markets whirled from the latest crises in the U.S. lending and insurance sectors, Costa Ricans’ recent eschewing of Wall Street troubled sectors appears to have paid off.

Following Monday’s bankruptcy filing by investment bank monolith Lehman Brothers then Tuesday’s near demise of insurance giant AIG, stock markets in the U.S., Europe, Russia and Asia dropped to decade lows as central banks funded billion dollar bailouts.

Costa Rica, meanwhile, was calm.

“The Banco Nacional doesn’t have any investments with Lehman Brothers,” says Violeta Fernández, the bank’s corporate relations director, underlining Costa Rica’s financial independence.

Some international banks linked to Lehman have recorded multi-million dollar losses.

“Costa Rica is lucky,” says Rudolf Lucke, an economist at the University of Costa Rica. “We’ve been slow to get involved in the American stock market, and that’s why we’re not in this hurricane. Chile, Argentina, Brazil and Mexico will be more affected. They’re much more linked to America’s financial market.”

Eric Vargas, strategy director at Aldesa, an investment consultant firm in Costa Rica, says that he has steered investors to more low-risk, long-term investments like Procter & Gamble, Colgate, Wal-Mart and U.S. treasury bonds.

“Since the credit crisis began in August 2007, we’ve been advising our clients to stay away from American financial stocks,” Vargas says.

Lucke is also realistic. “The possibilities are very high that certain Costa Rican institutions have investments related to Lehman. But that’s not something you talk about,” he says.

On Tuesday, the Costa Rican Stock Exchange (BNV) rose 0.34 percent. “We haven’t seen a direct reaction in the BNV,” confirmed Silvia Zúñiga, the press secretary at the BNV.

“The BNV is affected more by the domestic interest rates than by the American stock market,” says Lucke.

“One possible consequence of the crisis will present itself if international investors abandon emerging market debt (EMD) bonds for more stable instruments,” predicted Zúñiga. EMD bonds are issued by companies in developing countries, like Costa Rica. They are traded on the BNV.

Second round effects of the bigger markets’ troubles, however, are inevitable. Costa Rica’s economy depends largely on North American investment, trade and tourism. The U.S. is Costa Rica’s No. 1 market for exports.

Domestically, the lending market has never been very liquid, but now, as the Central Bank tweaks the interest rate to catch up to an estimated 15 percent inflation – the highest since April of 1997 – borrowing money is expensive.

Yet a conservative monetary policy may have saved Costa Rica from the speculative lending crisis in the United States. Here, stringent limits have been set on the amount of money banks can lend in proportion to their reserves. Costa Rica’s federal reserves, for example, total about $3.9 million. This is the highest they’ve been since December, when they were at record levels.

Vargas expects to see even more spending paralysis. Currently, domestic interest rates are lower than inflation. Consumers feel they are better off spending their money than saving it. This can create inflationary pressure that, coupled with an undervalued dollar, leads to more importing than exporting. This threatens the Central Bank’s reserves. The Central Bank’s reserves diminished about 20 percent in the last five months. Foreign direct investment – fast becoming a precarious last resort – had helped fill this gap.

Vargas envisions higher interest rates and an adjusted exchange rate, measures that might help bridge this discrepancy in the long run but will likely have short-term malignant effects, like a recession.

“It’s cleaning up everything that was wrong in a very harsh manner,” says Lucke of the financial crisis.

The Municipality of Jaco, in cooperation with the Central Pacific Chamber of Commerce and the Association Procultura y Desarrollo de Jaco beach, launched its promotional campaign called Jaco Land of Adventures and City of the Surf.   Jaco’s Mayor, Don Marvin Elizondo, members of the city council and the chamber, representatives of the Federation of Surf and members of the community were on hand last week for the kickoff of this campaign. Jose Ureña, President of the Federacion de Surf de Costa Rica talked about the importance of the Billabong 2009 World Surfing Games that will be held in the central Pacific in Playa Hermosa July 31-August 9.  Last week, the Municipality held an extraordinary session to talk about the necessities of the community of Playa Hermosa in preparation for next years World Surfing Games.  Better lighting for the streets, more trash cans, more security measures, more water hookups and reparation of the beach accesses were among the topics the Vecinos de Playa Hermosa asked to discuss.  Local business members and residents alike were in attendance to begin the process of preparing for the event.  This event will be one of the largest ever held in Costa Rica.

This is not going to hurt the Costa Rica Real Estate market. Playa Hermosa is one of the finest surf beaches anywhere.

As you may be aware, there has been a lot of speculation about prices being slashed due to the impact of the slowing USA market. 

It seems one has to distinguish the projects before making this observation just yet.

If a project had been dependent on bank financing or client financing through pre construction payment plans, who knows what kind of deal a project would make to keep things moving forward since our central Bank put a hold on construction funding to cool us off. However, a discount in this environment may lead to disaster in the end no matter how much it is.  There is a big difference between 50% off ( a good deal for the buyer) and a destitute project.

While we are watching how the impact of the US market is going to play out in Costa Rica, we are very cautious these days (for the fore mentioned reason) to include only  projects we  deem solid for our Property Scouting Tours .

Please read the report offered directly from the owner and President of Del Pacifico, a Costa Rica central Pacific project. We have been marketing Del Pacifico since they began.

I feel we need to wait and see how the better Costa Rica Real Estate projects fair in this slowdown before we jump to conclusions about fire sales.  Having said that, I am still convinced that even the best funded projects are going to look seriously at any offers these days as it is definitely slow.

We just received the following report directly from the president of Del Pacifico, one of our very large  projects that we market in the central Pacific.

Things are going gangbusters at Del Pacifico…..We now have over 260,000 square feet of construction either completed or underway! We have also sold 75 condos, houses and lots. There are over 100 people at work at Del Pacifico, but because a lot of the construction action is away from the highway sometimes it hard to see exactly what we’re doing. So here’s a quick update of what we’ve been up to in the last 45 days or so:

From a realtor’s perspective, sales and inventory are the most important topics. Let me say, as an overview, sales are quite strong and we have received 11 contracts or reservation for condos, townhouses, and lots in July and August. Even more importantly we have been raising prices, not lowering them.

Since sales have been strong, our available inventory is tight. In fact, we have only two of the 2 bedroom townhouses available and two of our 3 bedroom units. We also have only 10 of the La Prada town Center units available. The current pricing for these starts at $275,000 furnished. Of special interest might be the one “loft unit” which is available at $295,000 furnished.

Since we are nearly sold out of the three bedroom units, we have started a reservation list for our next phase called “The Portofinos”. These will be the same floor plan as the “Villas” but will be priced somewhat higher with prices starting at $300 per square foot. The last 5 units of the Villa Del Pacifico project sold at $550,000 furnished and a recent private resale of a front line unit has been reported at $650,000.

Here is a discount in our opinion - A currently re sale at Del Pacifico that is a luxury 3 bedroom condo with ocean view for sale at $485,000, which according to the inventory and recent sales is way under market. This the same one that is referenced above for $550,000 furnished.

For further information on Del Pacifico, please feel free to contact me, Robert Shannon at 1 888 581 1786.  Take one of our very thorough Property Scouting Tours and see where the best deals are in Costa Rica Real Estate.

For years more than 10 years on and off I have held Costa Rica Bonds and have been very pleased. I felt I should post this as it is encouraging to read this coupled with a previous post whereby Moody did an upgrade.
BEIJING, Sept 12 (Reuters) - China is secretly spending $300 million of its currency reserves to buy Costa Rica government bonds to reward the central American country for cutting diplomatic ties with Taiwan, the Financial Times reported on Friday.
The FT said it had obtained documents related to the deal after La Nacion, Costa Rica’s largest newspaper, won a court case a week ago Friday and a judge ordered the government to release the information to the public.
The State Administration of Foreign Exchange (SAFE), which manages China’s $1.8 trillion of reserves, promised to buy the bonds under the terms of a 2007 agreement whereby Costa Rica recognised China and cut links with Taiwan, which Beijing regards as a renegade province.
SAFE included a clause demanding Costa Rica take “necessary measures to prevent the disclosure of the financial terms of this operation and of SAFE as a purchaser of these bonds to the public”, according to the documents seen by the FT.
China’s Foreign Ministry said in a statement to the FT that the bond purchase and the related procedures abided by international business rules and conformed with related laws in China.
China bought the first $150 million of the bonds in January and is due to buy the second lot next January, the paper said.
It said SAFE, which does not comment on its investments, had set up a wholly owned subsidiary with registered capital of just HK$10,000 ($1,280) to receive interest payments on the bonds.
The disclosure comes against a background of concern among Western governments about a lack of transparency in the way some emerging markets’ sovereign wealth funds and central banks are investing their growing stockpiles of reserves.
SAFE has also quietly bought small equity stakes in a clutch of British blue-chip companies, according to recent media reports in Britain and China. The stakes are too small to require regulatory disclosure.
Beijing set up China Investment Corp last September and handed the sovereign wealth fund $200 billion of reserves from SAFE to manage separately.
Two-thirds of that sum represents money already invested, or earmarked to be invested, in domestic banks and other financial institutions requiring new injections of capital. (Reporting by Alan Wheatley; Editing by Ken Wills)

I felt I should give some real examples of the market as it exists in our life. To that end I have submitted the following for the editor to consider for publication.

To: Editor - AM Costa Rica:

I have been following the comments on the real estate and crime appraisal of your contributor. I wish to comment based on some facts I have at my disposal.

Please note, I do not plan to have an ongoing dialog here. This will be the only comments I offer on this subject as I am merely trying to relate our own experience.

While inquiries have slowed, we are still finding a number of serious buyers. We have seen no discounts at all in the central valley nor Atenas unless they are related to distress situations. In fact very recently in the central valley the following example are our experiences directly, one house sold for the asking price of $525,000 due to competition and another fell through, because of financing. The asking price on that one was $450 and the price agreed was $435,000. In Atenas, a lot was sold for the asking price, another house was sold for $450,000 which was very close to the asking price and these were in Atenas. These are just a few current examples.

What we  have seen is more caution, certainly, fewer inquiries and the mix at the moment is more upper income people such as Medical professionals interested in Costa Rica Retirement.

Remember what I am reflecting here is a short time frame and in no way should be construed as the profile of things to come.  I am merely replying to what I think is an extreme exaggeration of the Real Estate market. I have documentation to show these figures as well.

To asses the current market, one needs to take into account that there are  many Retirement in Costa Rica information sources that have popped up in the form of web sites. This makes the Real Estate market fiercely competitive and very confusing for the first time visitor interested in Retirement in Costa Rica. The confusion scares people, especially when they are receiving sensationalized information and this always results in less activity. The competition I speak of here is a large factor here and cannot be discounted.

In cases where a developer gets caught with the recent central Bank cutback on construction loans, I can see an issue here. Coastal overbuilding, I can see an issue here as well. Any underfunded product will always suffer when volume drops.

Developers that were thinly funded in the first place looking to pre construction sales payments is a situation whereby aggressive discounts may be applied. There should be focus placed on this kind of thing that surely affects the price discounting and more important the safety of the investor.

Astute Real Estate office won’t sell those projects and they can get desperate and prices could drop drastically to keep afloat putting our clients at risk.

Many coastal boiler room projects (USA call centerer operations) cease to exist for the moment. The drop in these sales can surely be a factor as well.

Finally, Costa Rica is no different than any other country that gets caught up in up markets. We have had that for years and we have our corrections like anyone else. With all the frenzy, maybe we are overbuilt. That can lead to slow down for sure. Worth a mention….Developer inquiries have slowed considerably.

The situation is clearly augmented by the slow down, but was coming anyway in those cases.

My focus these days is to firmly address the Costa Rica Retirement market as Costa Rica still part of the solution for many. The numbers haven’t changed and there are some 65,000,000 plus Baby Boomers becoming of age. Costa Rica is still the umber one destination for Americans retiring offshore.

Is cost of living a factor?  Cost of living is going up here, but it is everywhere. How can it not?

Would you be more comfortable living on whatever your budget is here and paying $200 taxes on your $350,00 or home or picking up a retirement condo in Florida very cheap now and paying all their future debt at God know what rate of all their different taxes. Then you have the health care factor, the Hurricanes to deal with and at least 3 years until there is some light at the end of the tunnel politically. We are still a viable solution for many.

I am aware that one can refute this in that Miami offer 4 major sports, south Beach and much more. Our clients are looking for retirement now and they want what we have with all our problems and mainly they want difference…. Continue Reading »

We are finding lower inquiries like most, but the specialized areas still suggest good interest.  Baby Boomers looking to retire in Costa Rica are  still a little way out, but the current thinking seems to be lock it in now for 1 or 2 years down the road.

For that reason, we seek only solid retirement projects that are underway, well funded and with the correct amenities. On that front we don’t see a lot of upside in the immediate future. 

Moody’s raises Costa Rica’s outlook on improved fiscal, debt position