Costa Rica Real Estate – A Booming Decade-But Are The Boomtimes Over?

One of the smallest countries in the world, Costa Rica is known throughout the world for its sandy beaches, picturesque coastal landscape, and its wonderful diversity of plants and animals. In fact, though it is only about the size of West Virginia, nearly one of every five plant and animal species on the face of the globe are found in that little country. Tourists flock to it in droves annually making it one of the hottest tourist destinations in Latin America. Most visitors are from America and Canada, of course, but there are also thousands of travelers from South America, Europe, and the Far East. In order to cater to the booming tourism industry, resorts and hotels, restaurants, pubs, shopping malls, and other tourist attractions have popped up alongside beaches and other hot spots. This in turn has caused a sharp rise in Costa Rica real estate value over the last decade or so since land is one commodity that is not plentiful in Costa Rica, a country with just one tenth of one percent of the world’s land mass.

This relative scarcity of available real estate in the face of development growing out of tourism has led to a boom in new condos and homes along the coasts, in the mountains, and in urban areas.

Increasingly, Americans, Canadians, and Europeans, Costa Rica is now recognized as the perfect place to spend their retirement years. With lots of sunny and sandy beaches, nearly 800 miles of coastline and most beaches virtually deserted, beautiful mountains always close at hand, nice weather, a stable and democratic political system, low crime rates, excellent medical and dental providers and facilities, and high human development indices, it is very attractive to retirees. An increasing number of investors from around the world have seen the potential of real estate development in Costa Rica and putting money into its real estate.

For many years now, Costa Rica has understood the importance of sustainability. The country has adapted to its tourist patronage by developing and welcoming the international community. Development of condominiums, single family homes, and subdivisions catering to expats accelerated dramatically in the last 10 years, particularly along the northern and central coasts of the Pacific. With that boom came increased land prices, though still far, far lower than in comparable areas in the United States and Europe.

The severe economic downturn in the States and Europe has affected Costa Rica as well. Condo and subdivision development have slowed dramatically and in some parts along the Pacific coast, American second-home buyers, strapped for funds, have been forced to sell at very large discounts. One person’s challenge is another person’s opportunity.

Every contraction sets the stage for recovery. Costa Rica is expected to boom again due to the continuing tourist influx into the country, the high returns that real estate investment yields here, and the increasing scarcity of land in some places. Over the last decade, many investors have seen the value of their investments soar, though there is in fact a pull-back today in some areas because of the worldwide recession. Even many small investments have proved to be lucrative. Tempering the future boom a bit, though, may be that the fact that property in highly desired areas is becoming increasingly scarce. On the other hand, this may lead to increased investment in prime real estate inland.

The largest rise in property prices and the steepest decline due to the recent recession have been along the Pacific coast. The beautiful Caribbean coast remains largely undeveloped so the run-up in prices was not as rapid. And home prices in the Central Valley containing the largest city, San Jose, and some 40% of the country’s population have not been significantly affected because of the acute shortage of available land and continuing demand as more and more Ticos move to the urban areas.

The author, Victor Krumm, writes about tropical Costa Rica and has an informative websiteCosta Rica Vacations. Check out the prettyCosta Rica Real Estate