You’ll find regular commentary on real estate markets in Costa Rica, Panama, Nicaragua and Belize in mainstream press. But it’s Costa Rica that racks up the highest amount of coverage on the blogosphere. Costa Rica has been a destination for vacation home buyers for decades and is now home to an impressive array of hospitality brands. The other markets are newer and at an earlier stage in their development cycles.

The image counts the number of real estate blogs per country according to Technorati.com, the blog search-engine. The results broadly correspond to the relative number of online searches for real estate. It’s a useful proxy for the maturity of, and buzz around, the different real estate markets.

Central America continues to attract investors and tourists alike.  But not all countries have the same pulling power. 

The graph below shows which countries rack up the highest number of searches for real estate online based on the generic country-followed-by-real-estate search phrase.  As you can see, there are more searches made for “costa rica real estate” than for “el salvador real estate.”  And every day the search term ”belize real estate” is typed into search engines more times than “guatemala real estate.”

The results that underpin the graph above are for July 07.  But the trends have stayed the same for a number of years.  Perhaps we will see the numbers of searches for “Panama real estate” and “Belize real estate” catch up with “Costa Rica real estate.”  At the moment though, Costa Rica is the leader for real estate searching online.

The real estate opportunities available in Central America span a range of risk / reward profiles.  There is real estate on offer to suit different investment goals.  Properties that are good candidates for short term capital appreciation exist as well as properties in lower risk environments with the promise of an immediate rental income. 

Of course there are markets within markets so the graphic provides only a general representation of relative position of the country as a whole. The Costa Rica real estate market is the most mature, Panama and Belize real estate represent classic middle markets - not quite emerging and not quite developed - with Nicaragua, Honduras, El Salvador and Guatemala at earlier stages of the development curve.  We plan to dig a little deeper and highlight the relative positions and profile of different real estate areas within each country.  More on this to follow…

National real estate associations exist for most counties in Central America.  And, given the sharp growth of real estate investment in the region, these bodies seem to be getting more active. There are some big ticket items on the table not least the question of licencing, code of ethics and ultimately (maybe) development of an MLS.   The associations are as follows:

• The Costa Rica Chamber of Real Estate (CCCBR), Costa Rica Global Association of REALTORS® (CRGAR),
• Camara Salvadoreña de Bienes Raíces (CSBR),
• Asociacion Nacional de Agencias de Bienes Raíces de Honduras (ANABIR),
• Camara Nicaraguense de Corredores de Bienes Raíces (CNCBR),
• Asociacion Panamena de Corredores y Promotores de Bienes Raices (ACOBIR),
• Camara de Corredores de Bienes Raices de Guatemala (CCBRG)
• Association of Real Estate Brokers of Belize
• Federation of Real Estate Associations of Central America and the Caribbean (FeCePAC) - an umbrella organisation that ties the other bodies together with a focus on integration and networking.

The recent activity is a good sign.  The FeCePAC and CNCBR conference held in Managua, Nicaragua last week had a strong turnout with some key action steps to take for more regional integration of real estate approaches and standards.  We were also pleased to see the recent announcement that the Association of Real Estate Brokers of Belize will be working together with the government to establish a code of conduct and general property industry standards.   The US National Association of Realtors (NAR) currently has bilateral agreements with real estate associations in Costa Rica, El Salvador, and Panama and is affiliated with the Federation of Real Estate Associations of Central America.

It isn’t easy to find fractional real estate for sale in Central America.  Not right now.   But the market is steadily evolving and fractionals are destined to become a hot trend in future years particularly in the vacation home sector. 

For fractional buyers it is often not a matter of being unable to afford a vacation home, but a case of not wanting the hassle and expense of maintaining a home 52 weeks of the year when they are likely to occupy it only for two or three weeks each year.  It is simply a matter of cost-justifying the limited use of their home, especially if they have multiple second home/vacation properties. 

At the same time, buyers do not want to compromise on questions of value, equity and other benefits of second-home ownership.  That is why, unlike time share, the fractional real estate product has evolved to include fee simple deeded ownership complete with title insurance.  This ownership can be passed down through the generations in perpetuity or resold in the same way as general real estate.  

The key to the success of fractionals is their professional management. Most are operated by well-respected hospitality companies known worldwide. Among them are Ritz Carlton, Four Seasons, Starwood, Intrawest and Millennium, brands known for their five-star services and amenities. Part of the appeal of fractionals is that they are completely hassle free. To date there have been very few fractional resort developments in Central America positioned at the luxury end of the market (with the notable exception of the Four Seasons at Papagayo in Costa Rica).  

We are still at the beginning of it all in Central America.   And fractional real estate products are just one example of more sophisticated product offerings that are beginning to emerge in Central America.   Have a look at the Ground Floor for a broader discussion of fractionals alongside destination clubs and condo hotels.

There are no two ways about it, Costa Rica is booming and its property market is already an unmitigated success story; but fear not for there are a whole host of factors, including some about to come into play for the first time that will ensure that Costa Rica’s property market success will continue in 2007.

Despite the fact that Costa Rica has had an exciting property market for the past decade it is still considered to be an emerging market because of the record gains that are still achievable and also because its real estate market success has not yet been duplicated across the entire country.

While it remains an emerging market and yet one stable, secure and with so many factors ensuring its appeal, high gains will be made on properties bought and also on land banked in 2007.

Read the full article here…

Most indications point to the investment climate in Costa Rica remaining strong: latest reports indicate that the country is on target to notch a 6.5% growth in GDP for 2006 beating earlier predictions; Intel and Hewlett Packard plan to expand their Costa Rica operations over the next 18 months; and a plethora of new luxury banded real estate developments are ready to launch to accompany the existing Four Seasons and Marriott ventures. There is a real sense that the early risks have been taken and the ‘big boys’ are moving in. Costa Rica has more real estate projects by established international property companies backed up by high quality international marketing campaigns than any other country in Central America. A momentum has been building over the last three years, particularly in the Guanacaste province in the north of the county, with luxury launch following luxury launch, all in relatively close proximity to Liberia international airport.

Perhaps a little unexpectedly, tourism for the last 12 months to October 2006 is slightly down according to la Prensa Latina. For now, though, Costa Rica does appears to warrant its label in the CIA World Fact book as a ‘Central American Success Story.’