Costa Rica Vacation
Homes Hit By Crisis
By John McPhaul
SAN JOSE, Costa Rica
(Reuters) - The U.S.
mortgage crisis has hit
Costa Rica's once
booming vacation home
market, with sales
plummeting as Americans
who dream of buying a
tropical getaway
struggle to find
financing.
U.S. retirees and
vacationers often pay
for beach homes along
Costa Rica's
jungle-fringed beaches
by taking out mortgages
on their homes in the
United States, but
trouble in the banking
sector has made that
more difficult, realtors
say.
Prices for some vacation
houses and condominiums
in the Central American
country have dropped as
much as 40 percent from
their peak a few years
ago and sales have
slumped at least 30
percent over the past
six months, they say.
"Most of the sales to
Americans are in cash
after they take out a
second mortgage on a
property or mortgage a
property they have clear
title to," said real
estate broker Iris
Mailloux.
"I've only had seven
sales that were
(locally) financed in
the 15 years I've been
here."
Real estate agent
Sabastian Pecher said
sales are particularly
slow for less expensive
condos in the $100,000
to $200,000 range, which
typically have two
bedrooms and are within
strolling distance to a
beach.
"On the lower end we're
down at least 50 percent
to 60 percent," said
Pecher, who sells
second-hand homes as
well as new
condominiums.
Homeowners in the United
States are facing
foreclosures at a record
pace, according to the
Mortgage Bankers
Association.
As a result, U.S. banks,
many of which have been
burned by lending to
clients with poor credit
histories, have
tightened lending rules
to reduce risks.
Home sales in Costa Rica
are still strong to
visitors from Canada and
Europe, where banks have
been less affected by
the U.S. mortgage
industry slowdown, said
Mailloux.
Developers selling new
condominiums in Costa
Rica, which has a
reputation as a peaceful
amateurism paradise, are
trying not to cut
prices, even if that
means holding onto empty
buildings, said realtor
Murray Greer.
Realtor Mark Price said
realistic sellers are
cutting prices 20 to 40
percent compared with
three years ago, when
the Costa Rican market
peaked.
He gave an example of a
three-bedroom house in
the beach town of
Tamarindo selling for
$490,000, down from an
asking price of
$650,000.
As many as 60,000
Americans live in Costa
Rica, according to Linda
Solar, executive
director at the American
Chamber of Commerce.
The northern Pacific
coast in the province of
Guanacaste has become
particularly popular
since an international
airport was built in the
city of Liberia five
years ago.
Last year, foreigners
invested $664 million in
Costa Rican real estate,
according to the
country's construction
industry association. |
