Comparison shopping: An analysis of purchasing destinations for Nicaragua real estate
July 14th, 2009
The Nicaragua real estate market is hard to generalize on a national level. It’s made up of many micro or sub-markets. In this article we deep-dive into some of Nicaragua’s most important sub-markets or ‘purchasing destinations’ to draw out the kind of data we hope will help buyers and sellers make more educated decisions.
In Nicaragua the main purchasing destinations are located on the south western part of the Pacific coast. In particular the town of San Juan del Sur, the area south of San Juan del Sur to the border with Costa Rica, the Tola Rivieria & Popoyo region and the Central Pacific Coast, due west of the capital, Managua.
Together these four areas have 80% of all real estate developments in Nicaragua catering to the international buyer, making them a logical basis for comparison.
Mingle enough with real estate investors in Nicaragua and you’ll hear them expounding on the relative merits of different areas and asking questions like: “Is the town of San Juan del Sur with its local cafes, bars and restaurants a good place to invest. Or is Tola with its master planned resort-style communities a better option?”
Ranking purchasing destinations by price
The Central Pacific Coast of Nicaragua tops the list for median price/sqft for both serviced lots ($11.75/sqft) and condos ($206.30/sqft). Several large scale resort communities are planned in this area, including 3 championship golf courses.
The area South of San Juan del Sur, towards Costa Rica is the most expensive for single family houses ($173.03/sqft), followed by Tola Riviera & Popoyo ($164.78/sqft).
San Juan del Sur receives the most press and has the most international tourist visitors. But it is not the most expensive purchasing destination for any property category. (It comes a close second for condos.)
San Juan del Sur has certainly seen a rush of development in recent years and is home to 1/3 of all real estate projects in Nicaragua focused on the international market. Perhaps developers have been doing the math on buying a lot in the San Juan del Sur area (5th most expensive location) and developing this into condos (2nd most expensive location).
What about trends over time for San Juan del Sur?
The median price for lots, condos and single family homes has fallen in San Juan del Sur by more than the average across the country. For lots, the overall fall in median price between 2008-9 for the country was -3.53% (in San Juan del Sur the median price fell -9.38%), for condos the overall fall was -6.40% (in San Juan del Sur the drop was -9.90%) and for houses -3.41% for the country compared to -11.98% in San Juan del Sur.
Some buyers will see this as a clear buying opportunity given San Juan del Sur’s continuing status as the pivotal center for real estate development in Nicaragua. Others a sign of over-supply. What do you think? Let us know in the comments below this post, or leave a review for San Juan del Sur.
From Reveal Real Estate - charting international real estate trends in Central America.
The real estate market in Central America: In graphics
March 28th, 2009
Whether you’re in the market for real estate in Central America, or you are selling, market data matters more than ever. Without data how can you determine fair value, track where the market is heading or feel confident that you are making the right investment decision? Trouble is, in Central America market data and comps are not readily available from property institutes, registries or central bank databases.
To try and fill this data gap, we’ve collected data from real estate developments in Panama, Costa Rica, Nicaragua and Belize and put this information online. As part of our research we also collected country-level indicators that shed light on the investment climate. Here are some highlights from what we have found:
Real estate developments targeting the international buyer
Costa Rica has the largest number of real estate developments that target the international investor, with 34% of the total in our database. No surprise really. It’s been on the international real estate map for longest. Panama follows close behind. This is largely due to the explosion in condo projects in recent years in Panama City.
The price for an ocean view condo
The order from most expensive to least expensive country to buy an ocean view condo is Costa Rica - Belize - Panama - Nicaragua. The data looks at median price per sq.ft.
The ordering is what you would expect given the different levels of maturity of the markets and level of infrastructure. But did you think the differential between Costa Rica and the other countries would be greater? We did.
The average size for an ocean view condo in Costa Rica tends to be larger than in other countries, which may explain part of this. We’ll be publishing more data in later posts to dig into the comparatives further.
Internet searches on Google
There were more searches for ‘Costa Rica real estate’ on Google than for ‘Panama real estate’, ‘Belize real estate’ and ‘Nicaragua real estate’ combined. We predicted the order, but again were surprized by the differential between Costa Rica and the other countries - this time in the other direction.
Cost of living
Nicaragua stands out as offering the lowest cost of living. Using purchasing-power-parity (PPP) data we can determine what US$1,000 ‘adds up’ to in different countries. In the US $1,000 has the purchasing power of $1,000, but in Nicaragua it has a purchasing power equivalent to $2,629. We have to be careful not to draw too much from these averages as they don’t apply to all product categories. But for day-to-day goods and services your dollar will stretch further in all four countries than in the US.
Completed golf courses
There are several golf courses planned or under construction in the region. At least 3 in Nicaragua and 3 in Panama. The data below is for completed golf courses that can be played on. Before seeing the data, would you have guessed that there would be more than 2 completed golf courses in Nicaragua?
The data is drawn from research done in 2008, see notes to the data for more information. We’ll be updating for 2009 and charting the trends. Dig into our main site, run some searches, and check out the property hotspots and country indicators for Nicaragua, Panama, Costa Rica and Belize.
What’s your reaction to this data. Any surprizes for you?
Tell us about your real estate investment in Central America. Was it a triumph or a mistake?
March 19th, 2009
We’re looking for the inside scoop, your investment story. Why? Because we think personal insights, reflections and information direct from other investors will help those who come after make more informed decisions. It’s all about increasing market transparency and providing an additional lawyer of information to people researching the region.
So what makes a good review?
Reviews vary in tone and approach. Some deliver hard facts and quantitative data while others focus on softer attributes like the feel of a place or its reputation. Although there’s no single formula to follow, there are some content topics that we see in the best property reviews:
- Informed judgments based on real-life experience
- Comparisons between different options
- Examples (perhaps even with photos) of previous investments made and how they have performed
- Specific information on the kind of investor that would be be most suited to a particular area or property type
- Coverage of how a particular place or region has evolved over time
On Reveal Real Estate you’ll find reviews organized by property hotspot - the areas generating the most attention from international real estate investors.
Study after study has shown that people who read reviews say that their purchasing decisions have been influenced by what they have read. Your review may help someone confirm that an investment in a property hotspot is the right decision for them. Or it may result in them changing their mind about a buying decision.
And, over time, we want to highlight the people behind the best reviews and build a network of expert reviewers. If you are interested in joining the network, please contact us.
So, write a good review, upload a photo of an investment that you have made, demonstrate your expertise, and you’ll be helping those who come after you.
Tags: Ambergris Caye, Belize, Golf, Real estate tour, Reviews
Posted in Property news, Site development | 1 Comment »
One thing is clear, change is coming
January 25th, 2009
In these difficult financial times we know a lot of people are re-thinking their investment and retirement future. Some are concerned about losing their jobs, others have been hit by severe stock market losses, and many are anticipating receiving retirement checks that will be far smaller than they had planned.
One thing is clear, change is coming.
But at the same time we’re remembering that with change often comes opportunity.
We’re seeing this in our users - people interested in researching real estate in Central America. There’s a renewed willingness to explore new options and an increased openness to reinvention and change. Some are actively seeking destinations that offer a lower cost of living and more affordable healthcare, while others simply wish to move a percentage of their assets outside the US.
In these turbulent times it’s more important than ever to access reliable information for decision making. Yet people often don’t get the information they need.
The basic problem in Central American is the lack of consistent and objective data on property prices. Market comps are hard to come by and there’s not much in the way of data available from property institutes, registries or central bank database. You won’t find the equivalent of zillow, redfin, or trulia serving up market comparatives, neighborhood statistics and price trends. This means that investors often have to rely on information supplied by self-interested, and sometimes ill-informed, vendors and real estate agents.
Filling the data gap in international real estate
It’s into this information gap that investor guide sites like Global Property Guide and expert weblogs such as the Panama Investor Blog and Overseas Property Blog have launched. And it’s in response to the lack of reliable market data in Central America that we built our database of real estate developments in Panama, Costa Rica, Nicaragua and Belize with standardized price comparisons; collated market data and reviews of overseas property hotspots (see for example for San Juan del Sur, Nicaragua and collected country indicators relevant to real estate investing (see for example for Costa Rica real estate.)
The International RE.net has still got a long way to go, but the good news is that the improvements are coming at the right time – just when finding good value, in the right location and within budget is more important than ever. Armed with better information than before, international real estate investors can make decisions with more confidence.
Increased transparency is coming to real estate in Central America and that kind of change can only be a good thing.
Can you find what you are looking for in international real estate?
January 16th, 2009
Introducing a smarter search for real estate developments in Central America. We’ve added some extra options to the commonly used price range and location searches:
- map based search (still rare for property in Central America)
- driving time from closest international airport
- paved/unpaved roads from international airport
- public evidence of social and environmental activity (we plan to dig deeper in 2009)
- driving time from closest town with amenities (defined as hotel >10 rooms and a good sized grocery store)
- lifestyle choices from golf to surfing to diving - for example whether you can walk to a surf break, find one within a 1 hour drive, have access to a golf course or be close to a dive spot. Joel Burslem of FOREM, a leading blog on technology and real estate describes lifestyle search as the new black.
- amenities offered - and whether planned or completed
And once you can get there, you can compare median prices with the country as a whole as well as the revealrealestate average.
Many find international real estate murky and lacking in transparency. Unlike more mature property markets such as in Canada, the US or the UK, investors can’t readily draw on data served up by national institutes, registries or central bank databases. And without reliable comps it can be hard for an investor to make an investment decision with confidence.
So we took the task in-house. Over the past 12 months we’ve built a directory of real estate developments operating in Panama, Costa Rica, Belize and Nicaragua - with standardized price comparisons. Practically all the projects in our database target the international buyer seeking a second home investment or lifestyle buy.
We’d love your feedback. What search options should we add?
Posted in Market statistics and data, Site development | No Comments »
Real estate market information that investors need
June 29th, 2008
Our goal is to help real estate investors make smarter decisions by providing valuable data and information.
Costa Rica, Belize, Panama and Nicaragua have all come onto the radar of international real estate investors. But there is an information gap that we are planning to fill.
We’re working behing the scenes to provide the hard and soft market information that investors need. Armed with this information, investors can take action with more confidence.
We are in beta at the moment and will provide updates during the second half of 2008 as we start to build out the site. We don’t want to start with global coverage that feels in-complete. So the first phase will focus on Costa Rica real estate, Panama real estate, Nicaragua real estate and Belize real estate.
And don’t wait for one breakthrough launch. We’re going to be adding layers of information over time as we compile and analyze the data and build our network.
Posted in Site development | 1 Comment »