Longtime buyers’ markets are shifting to sellers’ markets off the Caribbean coast of Honduras.
Roatan Is Largest & Most Developed of Bay Islands
Roatan, approximately 32 square miles, is one of three among the Bay Islands (Utila and Guanaja are the other two) sitting about 40 miles north of Honduras’s Caribbean coast.
Known for the Mesoamerican Reef that surrounds this island, the largest barrier reef in the Western Hemisphere, Roatan is an international destination for scuba divers that “…has not been fully discovered yet,” according to Matt Esfahani, owner of Roatan Sotheby’s International Realty.
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The island with its history as a British colony is, on the whole, an English-speaking island. Rustic Caribbean charm, gorgeous beaches, temperate climate and few hurricanes attract tourists and buyers alike. Additionally, the island’s infrastructure and services have continued to improve in order to accommodate increasing interest from the outside world.
Buyers’ Market Now Transitioning to Sellers’ Market
Due to its longstanding low profile among Caribbean Islands, housing prices have been contained up until the last year or so. According to the MLS of the Roatan Realtors Association, home listing prices increased approximately +15.7% from 2009 through 2021. However, in 2022, prices have grown +15.2% y/y.
Haydee Munoz, owner-broker with Mayoka Realty in Roatan’s West Bay section, said that increased demand is depleting inventory. “Prior to the pandemic, very little sold at asking price. Now, properties are selling quickly at listing price or well above…(sales) are booming, and we’re wondering if we’ll even have a slow season this year.”
Steve Hasz, co-owner and broker with Roatan Life Real Estate, said new-home construction is quite active on Roatan since there is still a lot of available land. “Beachfront lots range from $275,000 to around $600,000. Lots off the beach start at $50,000, with view lots commanding more.”
Hasz estimates current building costs at $130/square foot for luxury wood construction and concrete at $150/square foot.
Esfahani with Roatan Sotheby’s International Realty said that typically, condominiums range from $200,000 to $800,000. Houses go from $200,000 to $1.8M.
Esfahani pointed to the most developed areas of the island (West Bay, West End, Sandy Bay, Lawson Rock, Palmetto Bay, Blue Harbour, Parrot Tree and Camp Bay) as being the most popular with foreign buyers.
With the island’s obvious draw being the spectacular Mesoamerican Reef, most Roatan buyers are interested in scuba diving and snorkeling. Foreign buyers tend to be retirees and/or investors who intend to rent out their homes when they aren’t using them.
Esfahani said that Americans and Canadians are the two dominant buyers among foreigners while investors from Italy, Holland, Spain, Denmark and Spain round out the edges. Esfahani added that there is “a large and growing population from the Czech Republic.”
Foreign buyers are limited to one property of up to three-quarters of an acre of land per person unless foreigners set up a corporation. Establishing a corporation in Honduras requires a one-time cost of $1,200 – $1,500.
Local lawyers are recommended. Legal and notary costs run about 2% of the home sale price. Remaining closing costs run about 4%.
Most sales are transacted in cash (US dollars) though some deals have owner financing available at 40-50% down, 5-7% interest and payoff in 1-5 years. Hasz, however, explained that owner financing is “getting rarer and rarer in this market.”
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Thanks to The New York Times.