“IF you build it, they will come,” intoned Kevin Costner in the film Field of Dreams. But in the context of Costa Rica, you can almost hear Jerry Maguire’s Cuba Gooding Jr. crying out, “Show me the money!”
Recent announcements by the Costa Rican government that three long-awaited highway projects might finally get off the ground this year drew a mix of optimism and skepticism from area real-estate experts.
“Project is a big word,” said Ivo Henfling of Go Dutch Realty, part of the American-European Realty consortium.
“The promise is not enough.”
The endeavors in question whose jump starts appear most imminent are the expansion of the 68 kilometers between San José and the western Central Valley city of San Ramón; the construction of a new 30-kilometer highway between San Ramón and Ciudad Quesada in the Northern Zone; and completion of 77 kilometers between San José and the Pacific port of Caldera, via Orotina (TT, Jan. 23, Feb. 6).
The government is presently evaluating a bid for construction of the San Ramón highway. Funding has been acquired for the other two projects.
“POSSIBLY, yes, it is going to increase prices,” said Emilia Piza, president of the Costa Rican Chamber of Real Estate Agents. However, she points out, two of these projects have been on the drawing board for three decades. “We’ll have to see.”
Even though the Caldera highway has been “stewing for awhile,” Les Nunez of RE/MAX First Realty acknowledged there already has been an effect on prices, most notably in the far-western suburb of Ciudad Colón, at the end of the presentPróspero Fernández Highway
The government has announced that highway construction will begin in July and be completed from Ciudad Colón to the Pacific coast by the time the President Abel Pacheco leaves office in 2006.
“The last three years were the first wave, and much of the land has been spoken for already,” Nunez explained, referring to the 2001 building of three bridges being connected by the new highway. He adds that speculators started moving in about five years ago.
SOME of the land remains in coffee growers’ hands, according to Nunez. They’re waiting to sell when the price is right, he said, calling it a phenomenon of “highest and best use.”
Nunez said land near Ciudad Colón now sells for $25-40 per square meter that sold for $8-10 per square meter three to four years ago.
Land in the city’s Barrio Trinidad is now advertised for $65 per square meter, he said, and some land in the vicinity is being advertised as high as $140 per square meter.
Nunez projected a 10-18% price increase in coming years in Ciudad Colón and nearby Atenas, situated between the Caldera highway and the San José-San Ramón road.
The prospect of easing the commute into San José and out to the beach – once complete, travel time to the coast is expected to take an hour – will be a strong selling point in real estate listings for both communities.
HENFLING remains cautious, however. “Everybody talks and raises prices. But does anyone want to buy?” Henfling explained that the market has responded this way before in response to highway project announcements. Once people realized construction was not going to proceed, land values dropped again.
“It’s a gamble, just like going into the casino,” he said.
Another area poised to benefit from the coastal highway construction is the Central Pacific beach community of Jacó.
Henfling said development there will be more likely to occur in response to ventures funded by the private sector than announcements by the government of impending projects.
Real estate took off in Jacó with the construction of the Los Sueños Marriott hotel-marina-condominium-golf course complex, he said. An outside private initiative always instills more confidence in Costa Rica than a government announcement, he added.
Still, Henfling admits that this time, the road construction projects look more certain than they have in the start-and-stop days of the past.