As of late, the talk is “how high can the cost of construction materials rise?”   The costs of steel and concrete, partially controlled by the government of Costa Rica, have risen well over 30% the past two weeks and are scheduled to go even higher.  The government posts the dates of price increases which allow builders OR anyone with money to “stock up” or pay in advance for materials to save money.
We have seen our construction costs rise from the $35-40 per sq. foot level to the $45-50 level.   And virtually all of that is material costs although labor costs are rising as well.   Remember, though…homes here are much better built than in the States with the standard being concrete and steel with very little sheetrock and wood beams being used.   That may change soon and most likely will.
So…what do we foresee for the “boomer influx” that has just started?   How will the rising land and construction cost affect the literally thousands that are projected to exit the States or Canada for economic or other reasons?  Will people that are currently stretched “to the limit” financially already be able to afford to live in Costa Rica and improve their life styles in their retirement years.

We see:   smaller pieces of land satisfying retirees… we see slightly smaller homes and perhaps a few downgrades of materials ( frankly, only those who would know the difference are those that live here now )…Remember, adjustments are already being made by everyone who uses products dependent upon oil or anyone who eats food ( obviously everyone) …costs  are up hugely and have affected pricing everywhere and everyone’s way of life.   We all have to make adjustments.   The things to remember , at least from our viewpoint…. even if Costa Rica were priced the same, the beauty, diversity and virtually endless list of daily activities makes it a superior place to live for many….
Both Rhonda and I truly believe that , at least for us, Costa Rica has become a “quality of life” issue.    Economic issues aside, life ( again, for us) is better, less stressful, and much more enjoyable here.   Medical care is decidedly better…and there is nothing more enjoyable than literally watching your flowers and trees grow right in front of your eyes …or sitting on your terrace and listening to the parrots and watching the literally hundreds of species of birds and butterflies.  

The past two weeks have been great for CR Home… although sometimes frustrating.  Offers on properties that would have been accepted in a heartbeat 2-3 years ago are rejected and sometimes asking prices are even raised.   The perception is still that “gringos” have money trees back home and will pay almost any asking price….and that we are really too stupid to know the difference.  Word of the economic slowdown and financial problems of many have not really made it to the newspapers in Grecia yet…and probably never will.   After past comments of problems with sellers here and responses like “ just have your sellers sign contracts”  I have to reiterate that people here absolutely refuse to sign contracts of exclusivity…and even if they did, they would not be binding.   We are in the process of now asking all sellers to at least sign a paper stating that they will hold their selling prices for 90 days…but our attorney tells us that even that it non binding.   These attitudes will ultimately backfire for some sellers ( and already has as we will absolutely not even talk to them again after they change prices ) but in the meantime…all we can say is that it is frustrating.   We DO have definitely the best pricing in this area and , unless you want to pay 50% more…this is a price for doing business the old fashioned way…and the same way that the real estate market has operated here for decades.   For anyone to represent that it is different simply is not true. 

One last note before going to new listings and offerings…we are being shown a large number of upper bracket homes and do not carry many on our website.   We believe very strongly that everyone looking to buy here should know what building costs are before buying an existing home that is for sale.   We have seen a fair number of gringos recently offering their homes for sale that have recently been built for well under $130-140,000 (total cost including land and infrastructure)only a year ago and are now being offered for over double those costs.  While this is an individual choice and many ARE willing to pay a large premium for an existing structure, we feel everyone should know how much of a premium they are paying.   If you are paying an extra $100,000, you should at least be aware of it.  
A couple of notes about past listings:

1.     We have decided NOT to pursue our coffee shop as the owner of the building has decided he wanted an extra $10,000 deposit before renting to us ( contrary to his earlier verbal agreement) AND the managers have changed their terms on us as well.    Wa walk for now.  

2.    We have also decided NOT to pursue the “waterfall property” as an investment participation.   While this is one of the best properties we have seen we believe that our time and energies could better be spent on other projects.    See below for our “Del Webb knockoff project”.    This property represents a fantastic buy for someone , either as an investment to do what we had proposed OR for a fantastic home with extra land that can be sold for a great profit later on if desired.   Prices, depending upon he amount of land purchased, range from $125,000 to $150,000.  This is the only piece of land in Grecia with a waterfall of this size by a factor of probably 3x1.   It is gorgeous.   If you want privacy, views, jungle and a gorgeous river and waterfall…this is it.   

3.    1000 sq. meters of 360 degree views…the mountains, volcanos and Central Valley…overlooking Grecia and only 10 minutes from town.  Planted in coffee and fruit trees.  This property is being offered at less than $25 per meter while the surrounding land ( less than 10 meters away is being sold at $40 per sq. meter.   Buy for investment for a relatively quick turn or hold.   This is WAAAYYY under market price. 

4.  One manzana ( 1.75 acres ) gorgeous view property…fantastic  area and neighborhood…only 150 meters from utilities and good road to the property.  Nearby river.  Divorce sale.                               Only  $55,000

5. We are selling an additional two lots in Ventanas San Mateo...they will each be 1/4 acre or 1000 sq. meters.   They will not offer an ocean view but rather are set privately in the midst of a jungle...fruit trees, teak, huge hardwood trees and flowers and flora galore.    white faced monkeys make their homes here as do toucans and parrots.   AND you are only steps away from the pool ( completion 2009 ) and rancho, jacuzzi and walking paths.   Each lot includes all utilities and of course, participation in the teak production AND all amenities. 60% of the first two phases are currently sold .
We are offering each of these lots at $35,000 with $15,000 down and the balance to be carried by us over a three year period (amortized over ten
years ) .  
Prices are going up soon.    Phase three prices will be at least 15% higher and construction of the first model home has already started.  

6.     This is the offering that we think will be oversubscribed almost immediately.   It is not large but we believe it will be hugely profitable.   We call it the “Del Webb knockoff” project.   ( hey, gotta name it something).   A “baby boomer community” which will be completely turnkey.  Many boomers are afraid to move here because they simply do not know “where to go or who to call” with problems or questions.   Problems such as “who will watch my home when I am gone?” or “how will I get from the airport to my home?” or “ how do I get my medications?”  or “ how do I find a good dentist?”.  These are all questions that we know we can get answers to…but we don’t really know how.  And if you are moving to a foreign country and don’t speak Spanish you absolutely have to know SOMEONE.  This community fills that void.  It is completely turnkey ( well, maybe not completely…but pretty close).  The community will consist of six homes…a gated and secure area, common area consisting of pool, exercise room and “rancho/party room” as well as the entire area being landscaped and each having room for a separate garden area.   One of the reasons Santa Ana and Escazu are both so popular is that they have areas similar to what we are proposing except with virtually no land.   And the problem with those areas in today’s market is of rising crime ( in that area ) AND increasing problems with infrastructure.   The areas near Grecia, Sarchi and Naranjo are safer and offer more security as well as a rural atmosphere…at yet they are only a maximum of 45 minutes from shopping, the airport and all conveniences.    Everyday needs are met easily and hospitals are only minutes away as are all professional services and shops.   We propose to offer complete services such as delivery, concierge ( obviously not called that here ), maid service, maintenance, a “hotline” that can be called 24/7 and questions answered and services arranged.   In this way, a total package with answers to literally everything is there.    We are not simply selling a house or land and walking away.   This is a total lifestyle and turnkey package.
Each home  will sell for $190,000.   Initially the land will be purchased with enough land available for a minimum of 1000 sq. meters or ¼ acre and a large common area ( don’t forget the pool, etc )  .   Each home will offer all amenities and contain approximately 1500 sq. feet.   One home will initially be built to serve as a model .   The area will be laid our , landscaped and the pool and auxiliary buildings will be completed as will a gate and nearly all infrastructure.   We estimate a total sales time of approximately two years.  We also plan on a minimum holding period for each investor of five years and anticipate completing three similar projects during that time frame.
Projected profits are phenomenal.   By the time this reaches you a more detailed proposal will be ready.    Total being raised is  $250,000 and minimum investment is $50,000.   Investors will retain all collateral and the general partners will retain 50% of the profits but not until realized.    A total projected P and L statement is available.    We believe that this project will be oversubscribed almost immediately as it has already been discussed with several potential investors… so please indicate your interest as quickly as you can.

hasta luego…call, write or stop in…
Randy y Rhonda;  Steve and Marzena; Char, Rodrigo, dolan and Logan; Liffer and Yolanda; Albert and Francini, Pedro Coto, David, Russ and Chuck ( Stateside ) and Alvaro, the woodpecker.  ( actually , we have a lot more that help us indirectly too that should be mentioned:
Tomata , our chief foreman in San Mateo, Coqui ( Playa Azul ), Albert Jr. ( maintenance, Grecia ), Marta, Maria, Cuny, Carlos , Ajic, Carlos 2, Henry and probably a lot more that I have forgotten.   We depend on all of them in one way or another.