Why the Costa Rica Real Estate Market outperforms U.S Real Estate

From the Desk of Michael Simons

People always ask me how the Costa Rica real estate market is doing, is it stable, did we see a big fall out like the USA?  I believe Costa Rica has one of the most stable markets in the world for a couple of reasons.

    1.  99% of our clients paid cash

    2.  There is no formal MLS in Costa Rica

People can blame whoever they want for the crash of the real estate market in the USA. You can say it was greedy real estate agents, pushy mortgage brokers, banks looking the other way. You can blame it on one President or another or the law that was passed to allow easier access to housing which opened the door to non-qualifying loans. And all of these might be true. But the real reason for the decline of the housing market was individuals buying homes, who should NEVER have been buying those homes.

How come nobody blames the buyers? How come nobody takes responsibility anymore? When you sign a contract it is your responsibility to make sure you can live up to that contract. Not the mortgage brokers.  He didn’t put a gun to your head.  So when those mortgage payments came due, and people couldn’t pay them, they just walked away.  Of course, they would, they only had 5% in the game.  But when you have 100% skin in the game, you don’t walk away.  You are going to be much more reluctant to unload that property.  Since almost all of our clients paid cash for their properties here in Costa Rica, they were going to be much more resilient in finding a way to keep it.  Since carrying costs are so low here, about 20% of what it is in the USA, people are able to ride the storm out much easier than they would if they owned the same priced property in Florida for example.  For that reason, we didn’t see a huge drop in prices and we didn’t have near as many foreclosures to drive the values down.

Tank Tops Flip Flops Newsletter edition no. 88

Quality Time Left.  I was recently in the USA and Canada again visiting some friends, watching sports; the only reason I really go back anymore truthfully. I do my best to avoid North America from October to April as I just flat out, despise the winter. But the NHL and NFL are played in cold weather and they are two of my favorite sports so I suck it up for the sake of satisfying my cravings, and I try my best not to complain. My friends are all tired of hearing how awesome my life is, how gorgeous the weather is, and what an amazing place Costa Rica is to live, and they really hate when I bash the city they happen to live in; “What a dump!”  But heh; that’s their problem, not mine. They could come join me in paradise, just like you can, but for some reason, so many people just postpone. It is incredible how many people email me, looking for info, inquiring about properties, that I know are NEVER going to come here. There are so many of them that just keep torturing themselves, week in and week out, pretending that someday they will live the life, but never put a plan into place. Maybe they don’t have the fortitude, or the guts to pack up and come; maybe they are all talk and no action; I don’t know. But they keep scouring my website, reading my newsletters, sending me posts; “Don’t give up on me yet, Michael, I am coming.” Dreams just don’t COME true people; you have to MAKE them become a reality. Every time, it is one excuse or another; kids, college tuition, work, the Canadian dollar; blah blah blah. Thanks for the update, I tell them, and I go back to living the dream. They are in the bottom of a rut and won’t ever get out. But as I found out this past week, it can all be over in a minute. Would you be satisfied with your life if it was?