Why the U.S. Market Matters More Than You Might Think
One of the things I've learned after years of selling real estate in Costa Rica is that our market doesn't operate in a vacuum.
Costa Rica has its own economy, its own construction costs and its own peculiarities when it comes to buying and selling property. But when it comes to the international real estate market—particularly the lifestyle and higher-end market—the economic mood in the United States matters enormously.
And right now, I think that connection helps explain something that anyone actively involved in Costa Rica real estate can see:
There are plenty of properties for sale. Buyers have become more cautious. And properties are taking longer to move.
The Costa Rica Market Is Slow
The latest Coldwell Banker Costa Rica market report gives us some useful numbers to put behind that observation.
Through August 2026, the Coldwell Banker network recorded 207 single-family home sales, an increase of 10.7% over the same period last year. At first glance, that sounds encouraging.
But inventory increased even faster.
There are now 1,591 single-family homes actively listed, up 13.3%, while average days on market has increased to 382 days.
That's an important distinction. Sales activity has improved, but the supply of homes for sale is still growing faster than sales.
The luxury market presents an interesting variation. Luxury sales have increased sharply from last year's relatively weak comparison period, with 59 sales through August. But there are also 493 luxury homes currently for sale, an increase of 22.3%, while the average luxury sale price has declined slightly to approximately $1.46 million.
These are Coldwell Banker network statistics, not comprehensive statistics for every real estate transaction in Costa Rica. Costa Rica still lacks the kind of comprehensive MLS data available in the United States, so they need to be viewed in that context.
Nevertheless, Coldwell Banker has a broad geographic footprint, and the numbers provide a useful window into the international-facing portion of the market.
The Central and South Pacific
In my part of Costa Rica, the numbers are particularly telling.
Coldwell Banker's Central & South Pacific region currently has 518 single-family homes listed for sale, an increase of 13.6% from last year.
Average days on market has climbed another 15% to 458 days.
That's roughly 15 months.
For comparison, average days on market in the report are 364 days in Guanacaste/Nicoya and 370 days in the Central Valley.
So while sales nationally have improved somewhat from last year's numbers, I don't think the best description of the current market is simply that it has "momentum."
I would describe it differently:
Costa Rica has an absorption problem.
That doesn't mean we're experiencing a real estate crash. We're not seeing evidence of anything resembling the widespread forced selling or dramatic price collapse associated with a true housing crash.
Instead, we're seeing more properties competing for a relatively limited pool of buyers.
Coldwell Banker's own year-end 2025 analysis pointed to much the same phenomenon: rising inventory and longer absorption periods were giving buyers more choices and greater negotiating leverage.
The August numbers suggest that dynamic hasn't disappeared.
Why the United States Matters
This is where the U.S. housing market enters the picture.
A substantial portion of Costa Rica's international real estate demand comes from Americans. And many of those buyers don't simply wake up one morning with $700,000 or $1 million sitting in a checking account earmarked for a house in Costa Rica.
Their ability—and willingness—to buy here is often connected to wealth they already have in the United States.
They may need to sell a primary residence or investment property. They may have substantial home equity. Their wealth may be tied to stocks and retirement accounts. Or they may simply need to feel sufficiently confident about their financial future to make a major purchase in another country.
And there's another important distinction between the two markets.
For most people, housing in the United States is a necessity. Buying property in Costa Rica generally isn't.
A retirement home, second home, investment property or move overseas can usually be postponed.
That makes Costa Rica's international market particularly sensitive not only to wealth, but to liquidity and confidence.
When Americans feel wealthy, liquid and optimistic, Costa Rica benefits.
When they feel uncertain, they wait.
The American Housing Market Is Stuck
The U.S. housing market isn't collapsing either.
But it remains constrained by a persistent combination of high home prices and relatively high mortgage rates.
Millions of American homeowners still have mortgages carrying rates far below what they would pay on a new loan today. That gives them little incentive to sell, while today's buyers face significant affordability challenges.
The result is a housing market with relatively weak transaction volume even though American homeowners collectively possess enormous amounts of equity.
That distinction matters for Costa Rica.
Someone can be wealthy on paper and still not be liquid.
A homeowner sitting on $500,000 of equity in a U.S. house doesn't necessarily have $500,000 available to buy a house in Costa Rica tomorrow. That money may become available only when the American property sells.
When those transactions slow, some of the money that might eventually find its way into Costa Rica gets stuck upstream.
Interest Rates—and Confidence—Matter
Mortgage rates ultimately connect to the broader interest-rate environment, particularly movements in U.S. Treasury yields and expectations about Federal Reserve policy.
Inflation, trade policy, energy prices and geopolitical uncertainty can all affect those expectations.
But for Costa Rica, the precise economic mechanism may matter less than the effect it has on the prospective buyer.
Someone considering a move here may still love Costa Rica. They may still intend to buy here eventually.
But uncertainty makes it much easier to say:
Maybe I'll wait six months.
In a market driven heavily by discretionary purchases, enough people making that decision can have a significant effect.
There Is Still a Lot of American Wealth
There is another side to this story, and it's important not to overlook it.
American homeowners are sitting on enormous amounts of equity, and years of stock-market gains have created substantial wealth among many upper-income households—the same demographic that disproportionately purchases second homes, retirement properties and lifestyle real estate abroad.
That helps explain why Costa Rica's market hasn't fallen apart.
There are still buyers.
Good properties still sell.
Cash buyers still exist.
And particularly desirable properties that are appropriately priced can still attract significant interest.
But the existence of wealth is not the same thing as the willingness to deploy it.
Right now, many buyers have more choices and less urgency. They can afford to be selective.
And that changes the balance of negotiating power.
What This Means for Costa Rica Sellers
The biggest mistake sellers can make in this environment is confusing asking prices with market value.
The fact that another property is listed for $1.5 million doesn't mean yours is worth $1.5 million.
In a market with increasing inventory and long marketing periods, sellers are competing against every comparable property a buyer can see.
And buyers today can see almost everything.
If two properties provide roughly the same lifestyle and one represents substantially better value, buyers have plenty of time to figure that out.
That doesn't mean sellers should panic.
It means they need to be realistic.
Pricing matters more in a slow market, not less.
What This Means for Buyers
For buyers, this is actually an interesting environment.
There is more inventory. There is less pressure to make an immediate decision. And in many cases, sellers are becoming increasingly realistic about negotiation.
That doesn't mean every seller is desperate—or that every property is overpriced.
Exceptional properties can still command exceptional prices.
But buyers have something they didn't have nearly as much of during the post-pandemic surge:
time and leverage.
That's especially valuable in Costa Rica, where proper due diligence should never be rushed.
So Where Does the Market Go From Here?
I don't expect the Costa Rican real estate market to suddenly stop.
Costa Rica remains extraordinarily attractive to people looking for a different lifestyle, retirement, a second home or simply a change of scenery. The underlying reasons people want to live here haven't disappeared.
But I do think the pace of the market will continue to depend partly on what happens north of us.
If U.S. mortgage rates move meaningfully lower, American housing transactions increase, homeowners unlock more equity and financial confidence improves, I would expect some of that liquidity to eventually find its way into Costa Rica.
If rates remain high, American housing remains sluggish and economic uncertainty persists, Costa Rican buyers are likely to remain selective.
Meanwhile, inventory here continues to accumulate.
And that brings us back to what I think is the most important takeaway from the latest numbers.
Sales are increasing. But inventory is increasing faster.
That's not a collapsing market.
It's not a booming market either.
It's a market trying to absorb considerably more property than the current buyer pool is prepared to purchase.
And until that relationship changes, the practical reality is pretty straightforward:
Buyers have choices. Sellers have competition. And the negotiating leverage has shifted accordingly.
