THE real estate market in the Central Valley is looking stronger than it has in years, according to industry representatives. Any trace of a post-Sept. 11 slowdown has all but disappeared in the area, say real estate brokers, and prices continue rising steadily.
“Things are certainly on the upswing again, based on the last quarter of last year,” said Les Nunez, president of RE/MAX First Realty in San José. “Things are starting to take off again. We certainly have a lot more foreigners coming back into the country.”
One indicator of the increased foreign interest in real estate is participation in the Association of Residents of Costa Rica. Real estate seminars held by the organization last year had an attendance of about 30 people, but last week’s session drew 65, Nunez said.
The population of foreign residents is not only increasing in number, but also decreasing in age.
“EIGHT years ago the market was all retirees, but now we have some of the people who made it in the dot coms, and others who have just made some money and decided to cut out of the States early,” he said. “So now you find a lot of people in their 40s or younger. Some still work on projects for their employers up north, in technology or graphics. So it is a far more flexible crowd.”
Finding anything under $100,000 in the neighborhoods where most foreigners want to live is becoming increasingly difficult, particularly in gated communities, said Nunez, whose company works predominantly with foreign buyers.
Real estate appraiser Angela Jiménez says prices are rising faster than they should be in some areas of San José. But Emilia Piza, head of the Costa Rican Chamber of Real Estate Agents, said she believes home prices in the Central Valley are headed toward a period of stability.
THE price of a 190-square-meter (2,045-square-foot) condominium in a gated community with two bedrooms and two bathrooms varies greatly in price from area to area, according to Nunez.
The asking price in Escazú, an upscale neighborhood west of San José, would average about $200,000, he said. The same condo in San Pedro, on the east side of San José, would be about $150,000 or more, while in Heredia, the provincial capital located at the north end of the Central Valley, the price would probably range between $90,000-120,000 and Alajuela, northwest of San José, would be about $10,000 less than Heredia.
Escazú is and has been by far the most expensive and popular place to live for citizens from the United States. Construction of new condominiums in Escazú and Santa Ana, farther west, has been booming, Jiménez said.
She said she is worried about the effects so much development will have.
“I can tell you that in Escazú something is going to happen in the short term with so many condominiums being built. I don’t think the services are being taken into consideration – traffic, water, municipal services…” she said.
PRICES in Escazú are generally 50% higher than elsewhere, Jiménez said. For example, $100,000 can buy a 150-squaremeter (1,600-square-foot) home on a 300-square-meter (3,230-square-foot) lot in Sabanilla, Heredia, Ciudad Colón and Alajuela, but in Escazú a similar property sells for about $150,000.
A 200-square-meter (2,150-squarefoot) home on a 500-square-meter (5,380-square-foot) lot would cost $200,000 in the other neighborhoods and $300,000 in Escazú.
Piza said that in her experience, European investors often prefer less warm temperatures than those in Escazú, and turn to other areas.
Communities east of San José, such as San Pedro, San Bonilla and Tres Ríos, also are becoming increasingly popular, according to Nunez.
IN Lomas de Ayarco, east of San José and south of San Pedro, a wide range of homes can be found. For example, a look at recent real estate postings at www.therealestate.net reveals a 93-square-meter (1,000-square-foot) house with two bedrooms and two bathrooms in a gated community of Lomas de Ayarco costs $55,000.
A 232-square-meter (2,500-squarefoot) two-story condominium with three bedrooms and two and a half baths in the same area costs $160,000.
And $450,000 will buy a 418-squaremeter (4,500-square-foot) home on a 1,278-square-meter (one-third acre) property with three bedrooms, two baths, maid’s quarters, office and swimming pool with a guesthouse in north Lomas de Ayarco.
“IT is difficult to give a price per square meter, even in general, because it depends on so many things, not just the neighborhood, but the street, the house next door…” Piza said.
Whether the home is on flat terrain or a hill can also make a difference. When it comes to paying for land, the more you buy the cheaper it is, Jiménez points out. For example, in the hills of Escazú, one could expect to pay $50 per square meter for a piece of land with a view measuring more than 5,000 square meters. But a property that is more than 9,000 square meters would be priced closer to $25 per square meter.
The cost of homes in Costa Rica varies widely not only because of the land, but because of the wide range in price and quality of materials used, Jiménez said.
“And the cost of some materials depends greatly on the international market because they must be imported,” she said.
WHILE Costa Rican real estate does not have the same dramatic swings that it can have in the United States, few agents are ready to speculate on the future.
“It could get better, it could get worse,” Piza said. “It depends on the stability of the country and even more what happens with globalization, which will have an enormous impact.”