Current State of the Costa Rica Real Estate Market

1st January 2024
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"We all had the momentum; we were riding the crest of a high and beautiful wave…

So now, less than five years later, you can go up on a steep hill in Las Vegas and look west, and with the right kind of eyes you can almost see the high-water mark–that place where the wave finally broke and rolled back."

Hunter S. Thompson, Fear & Loathing in Las Vegas


As 2023 comes to an end, I feel an apt way to describe this past year would be somewhat akin to how Hunter Thompson described the end of the summer of love…

For sure we’d been riding high on the crest of a mighty Costa Rica real estate wave during 2021 and 2022. However, that wave seems to have crested, broken and is now receding back to normality —

Or is it?

Granted that my real estate practice is focused exclusively in the “southern zone, so my opinions will of course be biased by what is going on in my market. Nevertheless, I would surmise to say that what’s happening in our zone will at least be reflective of the rest of the country to some degree.

I’ve always regarded the southern zone as being two distinct markets – mountains and beaches. The beach market is much like other beach markets across the country and is largely driven by tourism and second or vacation home sales. The mountain market is less touristic driven and buyers attracted to it are generally moving lock, stock and barrel to Costa Rica.

I do deals in both of these markets, but honestly I am more focused in the mountains, as that is where I live and socialize. Most of my personal listings are in the mountains. A typical year for me will usually be divided between mountain and beach deals, with a slight majority of those deals favoring the mountains.

2021 and 2022 were record years for me, as they were for the agency I work for (Coldwell Banker Vesta Group). I believe that many agents from other agencies would tell you the same thing about those 2 post-Covid years.

2023 has also been a good year, but not a great one – at least not stacked up against the outliers of 2021 and 2022.

What drove the market to stratospheric heights in those post-Covid years?

Several factors, among them being red hot U.S. and Canadian real estate markets, a soaring stock market, historically low interest rates and basically folks having more cash than they knew what to do with. Coupled with that was the Covid-related phenomenon of folks switching from working in an office to working at home.

Then in 2023 all that red-hotness came to a head with soaring inflation and as a result soaring interest rates. That put a damper on the real estate markets in the U.S. and Canada and with Costa Rica being a predominantly cash market, folks all of a sudden didn’t have the wherewithal to buy that they had in 2021 and 2022.

Things were a bit different in the luxury markets, which remained pretty strong throughout 2023. But mid-market sales did slow down and the slow down intensified in the 3rd and 4th quarters of 2023 as inventories rose dramatically while demand cooled. I have been seeing a lot of price reductions throughout our southern zone market lately.

What’s likely to happen in 2024?

While I am concerned that the slow down will continue into the 1st quarter of this new year, overall I’m optimistic…

And here’s why —

The reasons why folks wanted to move to Costa Rica that drove the market to dizzy heights in 2021 and 2022 haven’t gone away. And the political division that many were trying to escape in those years will only reach its zenith in 2024 with a presidential election looming.

Meanwhile, the economy in the U.S. isn’t really as bad as political opponents of Joe Biden say it is. Inflation has come way down from nearing almost double digits in early 2023. The Federal Reserve is signaling a series of rate cuts in 2024, which will bring mortgage interests rates down. That should shore up the U.S. housing market. And the financial markets are at record highs.

Unemployment is at record lows and the phenomenon of work from home is only growing.

I know many “economists” have predicted recession in 2024, but from my vantage point, it seems that prognostication is becoming less and less likely – barring some unforeseen event like a major shock in the energy markets.

Therefore, if the motivation for moving to Costa Rica remains strong and may even increase and the wherewithal to actually make that move actually gets stronger, why would 2024 be anything but another “good” year for Costa Rica real estate?

Of course, as a realtor I tend towards an optimistic outlook (in order to maintain my motivation and sanity). There are a multitude of ‘risks” looming out there that could create havoc in the world and in Costa Rica, which, last time I checked, is still part of that same world – even though sometimes it's easy to forget that fact down here in paradise!

One particularly bothersome trend has been this year’s historic appreciation of the Costa Rican colon against the dollar. This is a bit of a head scratcher for me to figure out, but suffice it to say that Costa Rica’s central bank needs to step in and stem the downward slide of the dollar. Otherwise, this will weigh against the prospect of continued growth in both Costa Rican tourism and foreign investment. I don’t think the Costa Rica government wants that to happen, so I’m pretty confident that in 2024 the exchange rate will find more stability.

Oh and another positive development in the real estate world down here is that more and more Costa Rica banks are offering conventional mortgage loans to expats or nonresidents. I know of three banks who have gotten into that game with fairly decent loan terms: ScotiaBank, Lafise, and BCT. If interested leave a comment and I’ll be glad to provide more info.

The ability for nonresident buyers to actually get a loan in Costa Rica, on acceptable terms, (outside of the historically limited availability of short-term “seller-financing”) would be a major boon to the market here.

So, while I’m cautiously optimistic that 2024 will be another good year for Costa Rica real estate, I am also painfully aware that there are risks looming that could result in “flat surf.”


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