Many Americans are looking for the best way to stretch their retirement dollars, and some are choosing to do it abroad. There are a number of attractive locations that are attracting retirees – and even some who are not yet retired – like moths to a flame. Frederick Haywood, a graphic designer and writer who moved from New Jersey to Costa Rica, recounted his move to CNBC.
“If I’m being honest, moving to Costa Rica wasn’t something I had planned. I wasn’t completely unhappy with my life in New Jersey. My job as a business-development manager for a software company was easy enough and I had a 9-to-5 schedule with weekends free.”
Haywood said his wife, Susan, sparked the move. After quitting her job of 25 years as a hotel executive and wanted to move somewhere tropical. The couple’s children were grown and they realized that they had few ties keeping them in place.
“I figured that maybe we’d have a better life, doing the things we love in year-round tropical weather. Within a few short months, we had sold our home, cashed in some modest investments, packed whatever we could into five suitcases, and boarded a plane to Costa Rica.”
Although property prices in Costa Rica have not really decreased as drastically as in other Latin American nations, economic conditions may be putting off international buyers who may be more interested in the strong recovery of the U.S. housing market. According to the National Association of Realtors, 14 percent of Realtors reported that they had a client seeking to purchase property in another country, more than double the 6 percent responding in the affirmative in 2015. Mexico – at almost triple the amount (13 percent) – generated the most inquiries about purchasing abroad, followed by Costa Rica, Philippines, Colombia and Canada (each at 4 percent). Due to the absence of official house price statistics, it is hard to assess the exact movements of house prices, but the trend is clearly upwards. One constraint can be utility prices.
In San Jose, the country’s capital, during the fourth quarter of 2016 the average listing price of houses increased 6.2 percent year-over-year to $1,201 per square meter, an improvement from a meager growth of 0.4 percent in the previous year, according to encuentra24.com. Condominium prices in San Jose rose by 3.6 percent from a year earlier, at an average of $1,685 per square meter. While the median list price per square foot in New Jersey is $161, the comparison can be apples to oranges, and price doesn’t seem to be slowing buyers. Shawn Ferguson of Coldwell Banker said the momentum in the country has been positive and it depends on the U.S. economy, which represents the highest number of foreign buyers.
“We’re definitely having an uptick in sales. As the U.S. heads up, so do we.”
The most expensive and fastest-selling properties in Costa Rica are in the Central Valley. In Santa Ana, a 3-bedroom single family home currently costs about $212,000, according to the well-respected www.revealrealestate.com. Ed Cusack and his wife, Jackie, moved to the Central Valley, at the base of the Central Mountains that form Costa Rica’s spine. He said the temperate climate, mountain views, larger towns and cities, and a more balanced mix of local people and expats piqued their interest.
“Our retirement to the Central Valley town of Sarchi has been the wisest decision we ever made. It’s taken us back to a simpler life.”
Gated communities and condominiums are particularly popular among expats and foreign homebuyers. In the last three years, 80 percent of sales in Costa Rica were at $200,000 and upward. It can be a more affordable option than Florida. According to Zillow, the median price of homes currently listed in Florida is $269,900. Robert F. Davey of Century 21 Marina Trading Post said the country is on the radar for many buyers.
“Costa Rica has proven attractive to investors for its relatively open investment and trade policies, as well as for being the most politically stable country in Latin America.”