Some real estate portals offer price trend tools for those looking for comparable prices. There are many reasons there are no comparable prices in Costa Rica real estate. Statistics don’t exist either. Therefore, a price trend tool is quite the opposite of what a user is looking for.
There are a few Costa Rica real estate websites, like Encuentra24, that have tried to give users price trend tools so it gives them comparable prices by m2. Unfortunately, since all properties are of a different size (land and construction), an average m2 price is not an honest nor correct comparison.
Comparable prices are the final sales prices of recently sold properties with similar characteristics that are used to help determine a fair market value of another property for sale.
For any of these price trend tools to function correctly, you need to compare apples to apples. If you don’t have apples to compare with apples, you receive very strange results from these price trend tools. Besides, it is important to understand that the price trend will only compare asking prices. It is also very important to note that there are many circumstances that might have a negative impact on certain property values.
A long story short: The National Registry does not publicize prices property sold for, so there is no price history available for comps. So does it make any sense at all to use price trend tools?
Research
If you have nothing better to do, go to the National Registry, pull every deed on every property ever sold in Costa Rica and you will be able to put statistics together. If you don’t have a property number or the name of an owner, you won’t even know where to start your search.
Mind you, any search would only show those deeds with a real sales price and others with an invented one used to undercut the transfer taxes.
Also, your findings would not include those properties that were owned by a corporation where the notary public has transferred the shares. That would include almost every property sold by a real estate developer.
You would need to know the property number of each property, to find all homes in one community. The only way to do so is to find all survey maps (usually they follow each other in number) and then do a search for the property number. A devilish job.
Apples to apples
Very few communities have the exact same home built 200 times, which is what you need to compare apples to apples. Most homes in Costa Rica are custom-built homes, so they’re all different. Therefore, sellers cannot look at their neighbors for comparable prices. Only condominiums built by the same developer in the same community are identical. But for all the above reasons, you might not be able to find any comparable prices within that community. This shows that you could use the price trend tools offered by the real estate portals if you only use the exact same properties to compare.
The pros respond
Let’s see what a few of our affiliates respond to the question if the use of price trend tools to compare prices and statistics in Costa Rica real estate makes any sense.
Jogi Gerner in Tamarindo
Jogi – Juergen Gerner, our Tamarindo affiliate comments: The price trend gives an indication, but be careful when you apply this to a home you like to buy in a beach area like Tamarindo. A price trend is not the same as statistics of comparable prices. You have to consider 3 main factors which are very important.
Land prices
The land prices depend very much on how close the property is located from the beach.
Beachfront properties in 2016/17 had been sold with an average of US$550 per square meter and now you have to be lucky to find an empty lot available to purchase. Further inland and just across the street from the beach road, the property costs about half of a beachfront lot.
Even further inland, within a walking distance to the beach, as less as US$100 per square meter. If there is a decent ocean view, it goes up again between 200-300 US$ per square meter. Location, Location, Location.
Construction design details
Construction design details quality and finishing vary a lot. All Tamarindo homes are custom built. Prices range from US$800 per square meter up to US$4000 or even more.
Some have high ceilings, surrounding concrete walls, marble floors, solar systems, state-of-the-art irrigation systems, amazing landscaping, water softeners, a smart home system to name a few more expensive components. Others sell turnkey with good quality furniture. Often homes have a large pool which is not considered in the home size measurement. Other homes may not even have one.
Asking prices and real sales comps
The prices advertised online in some portals, VRBO sites and similar plus even at some real estate websites, may not be very accurate and misleading. Often sellers are asking too much, much higher than similar properties have been sold for recently, for lack of comparable prices and statistics.
Find a trustworthy and reputable agent or broker, he/she will be able to help you find the best option. Ask a professional real estate agent for comps in order to make an educated decision.
Bettina Maag in Liberia
Bettina Maag, our affiliate in Liberia, comments: Encuentra 24 has made a price trend analysis of the sales prices of homes for sale in the Canton of Liberia. 367 homes have been considered for the statistics. The homes are from various areas such as Liberia district, Cañas Dulces, Curubandé, Nacascolo, Mayorga and Golfo de Papagayo. At this point in time, almost a third of the properties considered are from the Liberia district (134 homes). In all other areas, it is not clear how many properties have been considered for the statistics.
The average sales price per square meter is between December 2015 and October 2017 was around USD 1010. As one can see, there is a large difference of approx. USD 735/m2 between
- the highest sales prices in February 2017 (approx. USD 1510/m2),
- and the lowest sales prices in October 2017 (approx. USD 775/m2).
In other words: m2 price trend in February was more than twice as high as in October for the properties considered in the study.
The exact parameters and the approach for the calculation of these figures are unknown. The shift reflected in the statistics has potentially to do with a changing property portfolio over time (in February there were other properties in the portfolio than in October).
There can be large price differences for properties due to different locations (more desired/and less desired ones), different construction quality (structure, materials, finishing, etc.), the status of the property (new, well kept, run-down, etc.), infrastructure (incl. access) as well as the size of the land. Some properties come with a small land plot, while others are large parcels. In order to interpret these figures, one would need a bit more insight into the kind of properties that have been considered in each particular month.
Brooke Rochester in Jaco Beach
Brooke Rochester, our affiliate in Jaco Beach, comments: A price trend for the Jaco Beach area can be tricky since most properties don’t follow comparable guidelines. You’ll encounter a variety of property types such as beach, mountain, downtown, quiet cul de sac, etc. Properties have different shapes, sizes, and even types of construction. The real estate market around Jaco Beach features a mostly foreign clientele.
Without a centralized database tracking, true market availability can be difficult. It will always need to be followed up with on-the-ground R&D for accurate information. I have seen we’ve been experiencing an increase in more economically priced options featuring community-style living homes. This, in my opinion, from a statistical point of view, creates a broader per meter pricing bracket comparatively speaking.
In my experience, there has been tremendous growth both infrastructural (which is still in process) and profitability (through rentals).
Real Estate Board
At one time, the CCBR, which is the San Jose real estate board, was planning to start a property price index. We’re still waiting…
Who to ask?
We, at the #1 MLS, have an advantage over any real estate company in Costa Rica. We do have professional agents who can explain why we don’t have comparable prices here. It’s very unfortunate that there are no statistics to work with when buying or selling property in Costa Rica.
Looking for a professional buyer’s agent or listing agent who can assist you in your real estate business? Contact us now.
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