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Real Estate Markets During the Pandemic

[vc_row][vc_column][vc_column_text] If you’ve driven down 34 through Dominical over the past year, you may have noticed something. It seems this sleepy town has woken up. Many large new homes have cropped up, while others are in

Construction of a vertical apartment tower next to another one

If you’ve driven down 34 through Dominical over the past year, you may have noticed something. It seems this sleepy town has woken up. Many large new homes have cropped up, while others are in the process of being built, all vying for their view of Bahia Ballena. It seems the pandemic has created a bit of a buzz for this little slice of Costa Rica, and expats are here to move, invest and live.

I spent about a decade selling real estate in New York City and as with anywhere else, it was cyclical. Financial crises would arise, taking with them consumer confidence, and subsequently, price per square foot. Eventually, would-be buyers would get tired of sitting in the same place, spring would bloom, and by May or June, we’d see concrete data showing contracts and closings were up, while inventory was suddenly and severely down.  This is again the case in 2021, when after a long, hard, covid-laced winter, buyers started their scramble to buy property at what they perceived was a discount. Hard data proved the market was back on the upswing.

With Costa Rica’s lack of closing information, tracking data becomes based on suggestion. Encuentra 24 offers glimpses into current price trends, but as we know, anything is only worth what someone will pay for it. For instance, it does not have pricing data for Dominical at all, but considering the quickly changing look of the coastline, we know there is a massive upward shift happening.

Current pricing trends for Atenas put the median asking price at $1274 per square meter. This is up from just over $1202 in July of 2020.

Santa Ana’s median price per square meter is around $1465 for the month of July, up from $1418 a year ago.

Being here, we are left to guess what a property would/could/did sell or rent for. Anecdotally, I can say that in my own Central Valley development I have seen a massive uptick in the purchase of lots and existing homes, mostly by expats. And whereas three years ago we were the first and only US expats in our neighborhood’s Automercado, I now meet an American or Canadian family almost every week.

With some digging, we were able to find the following quotes from Costa Rican professionals and leaders on the topic.

Here’s an excerpt from a recent article with La República, interviewing San Jose’s mayor, Johnny Araya.

“San José is preparing to attract more investment and foreign residents, in addition to promoting more business tourism”, according to Johnny Araya.

In recent weeks, a notorious interest in the capital real estate market has been reported to the mayor, by companies linked to the sector that are looking for places to invest, as well as people interested in retiring.

“Costa Rica has a very favorable image in terms of the sanitary management of the pandemic. We already had a very powerful brand in the world related to the protection of the environment, and now we add to it having a robust public health system ”, said Araya.

Those interested would be mainly from Canada and the United States and to a lesser extent from Europe, giving greater impetus to plans that the mayor has such as the Technological City and residential projects.

Regarding current market trends on rentals, Adrián Mora, president of the Chamber of Real Estate Brokers said this in an interview with Semanario Universidad, UCR’s newspaper:

“The sector most affected has been the sector for renting houses above $ 2,000 or $ 2,500. The most notable rental needs are low-income homes, $ 500 to $ 2,500.”

UCR’s research showed that “real estate brokers identify discounts on real estate, including up to 30% on rentals. These are the side effects of various economic problems, before and after the pandemic.” 

While I cannot back up my own guess at the market’s upswing with hard data like I could in the states, I do know this: three years ago, when I packed up and left the US for Costa Rica, my friends all thought I was nuts. Now I get regular phone calls asking for advice on how they can do this, too.

How about you? Have you noticed an upswing in sales where you live? Tell us in the comments below. We’d love to hear from you.

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nbari@outlierlegal.com

Nataliya Bari serves as the Real Estate and Business Development Director. Her educational background is in Communications and Real Estate. Prior to joining Outlier Legal, Nataliya spent over a decade running a successful Real Estate Brokerage practice in New York City and planned global events for the International Federation of Accountants. Nataliya is fluent in Russian, is a Certified Master Negotiator and approaches leadership with a sense of humor and humility.

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1 COMMENT
  • Christina Gioffre September 7, 2021

    Agreed. My family called me crazy and stopped talking to me 4 years ago. Now its completely out of hand with foreigners purchasing properties on the fly, no research. Will be lots of properties for sale and rent in two years.

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