There are many tropical destinations where people can move or invest but few tick as many boxes as Costa Rica. Buyers today are looking for larger spaces with more distance from neighbors and Costa Rica presents some intriguing options. It is far less expensive to live here and buy real estate than in more traditional tropical beach destinations like Hawaii, and it is one of the most politically stable nations in Central and South America with one of the lowest poverty rates.  The beauty of Costa Rica is mesmerizing and the more time that people spend here, the more confident they become in their desire to move to Costa Rica. Recent road improvements have meant that the Southern Zone is now easily reachable, yet restrictions on development mean that it will stay boutique. By owning the right property, you can tap into an already large and growing demand for rentals in our popular Costa Ballena communities. More than a quarter (28%) of Costa Rica's environment is protected by marine and terrestrial national parks, reserves, and wildlife refuges. The rich ocean waters are warm all year and home to whales, dolphins, and turtles. The coastline is a long stretch of sandy beaches, natural, unspoiled, and uncrowded. All this is why the Southern Zone is compared with Hawaii and Tahiti — without the high price tag.

Market Research For First Quarter of 2022

Listings in Costa Ballena in 2022

Total sold and under contract: 104 Sold properties: 69 Under contract: 35 Houses sold: 61 Land sold: 39 Commercial properties sold: 4

New Buyer Leads

Potential new buyer leads visited our website in the first quarter of 2022 at a slightly lower rate than the same time frame last year. However, the page views per user have increased. People currently visiting our website are more serious buyers looking at multiple properties at a time, making comparisons and staying connected with the market movements. However, traffic to our website has increased by 16% over the last quarter and 74% over pre-pandemic levels. This indicates that more people were not traveling last year and were looking at properties dreaming of when they could actually visit.

Listing Time On Market

The average time on the market for properties sold in this quarter was 363 days with a median of 154 days (the median number takes into account some of the more obscure properties that take years to sell and bring down the average). This has decreased from last quarter by 15%, meaning that buyers in the first quarter of 2022 were making offers on properties at a higher rate. The properties that sold the quickest at the start of 2022 were all priced under $1 million. These properties also tended to have great views, privacy, and good amenities, like a well-maintained pool. The properties sitting on the market for the longest amount of time were often in remote locations and had many more fixer-upper qualities.

List-to-Sold Price Comparisons

Costa Ballena’s list-to-sold price ratio was an average of 95% and a median of 98%. This says to us that today’s buyers feel that the list price is true to the current market value, especially when considering that the time on market for many types of listings speeding up. Many more buyers in the first quarter of 2022 offered the asking price to avoid getting into a bidding war with competing offers. The property with the highest list-to-sold ratio went for 7% above market valuation because the home was relatively inexpensive for the location (Dominicalito) while also being quite sizable and with an amazing ocean view. Those that sold for closest to the asking price had large spaces with clean and modern aesthetics. Three-quarters of the properties that sold for their asking price were built in the last 5 years. Some of the largest and smallest homes in the Costa Ballena spent a longer time on the market at an average of about 8 months for both categories. Nevertheless, these homes still sold for an average of 98.5% of their list price. Large farms take longer to sell at around 1.5 years on the market and sold for around 91% of their list price in the first quarter of this year.  The lowest list-price-to-sold-price comparisons were in remote locations with a lack of services like power and water on the property. Although the market for self-sustainable living is growing, the vast majority of buyers want the safety of a community around them, even if they value privacy. 

Property Values In Costa Ballena

Costa Ballena is the name that we locally use to refer to the towns of Dominical, Uvita, and Ojochal and the residential communities that surround them. Each town and the communities that branch out from them have their own special characteristics that make them unique from one another and attract different clients with their specific sets of needs and desires. Dominical is a surf town with lots of high-end residential areas surrounding it that attract a lot of luxury tourism. For this reason, you will find many new and modern luxury homes in communities like Escaleras, Costa Verde, and Dominicalito. Uvita is the commercial hub of Costa Ballena with the biggest amount of services and amenities. Lots of families choose Uvita for the ease of getting around on foot and the many schools and activities available for families. Ojochal is the more international town where many languages are spoken. It is the most quiet and tranquil of the three and is the mecca for people who want to live amongst the raw beauty of nature and surrounded by great people.

Costa Ballena North

Just north of Dominical is Hatillo, where three homes sold for an average of $462,000. These homes are more remote but all have nice ocean views. Around the center of Dominical, ten properties were sold in the first quarter of 2022 at an average of $536,000 per property (lots and homes included in the average). Up the highway towards San Isidro are Baru, Lagunas, Platanillo, and Tinamastes, which collectively saw five closings since the start of this year. This number is modest but this mountain valley region is still growing in the perception of the real estate community. It is a wonderful location for the still niche market of buyers who want large properties at higher altitudes, which are better for self-sufficient living. Escaleras is the most upscale part of the Costa Ballena, with homes sold in the first quarter averaging $1,412,000. The second most upscale region just south of Escaleras is Dominicalito, where properties (including vacant land) sell for an average of $780,000. This entire region saw around $23,000,000 in property sales so far in 2022.

Costa Ballena Central

In the area uphill from central Uvita, homes and lots sold for an average of $467,000. There were fourteen closings in this region in the first quarter. Bahia, the lower altitude area that is closest to the Whale’s Tail and other popular tourist activities saw five brand new homes purchased for use as vacation rentals. The average price that these properties sold for was around $360,000. And in the Ballena area just south of central Uvita, there were four closings consisting mainly of vacant ocean view land averaging around $300,000. The central region of Costa Ballena grossed around $9 million in total sales in the first quarter.

Costa Ballena South

The village of Ojochal had by far the highest number of closings in the Costa Ballena region (40 closings in town with 10 more in the surrounding communities). The popularity of this area with expats is evident in the visible growth in construction. Turnkey homes sold in this community for an average of $775,000, showing a market increase in Ojochal’s high-end homes. Ten minutes south of Ojochal is Tres Rios where ocean view properties near rivers and waterfalls sold for an average of $607,000 in the first quarter of 2022. Further back in the mountains, Chontales had three properties sold, averaging around $372,000 per sale. In all of Costa Ballena South, properties sales totaled around $17 million. Property sales for the entirety of the Costa Ballena region (Dominical, Uvita, and Ojochal) reached almost $50 million in the first quarter of 2022.

Popular Qualities in Properties Sold in 2022

Costa Ballena real estate buyers are looking for a variety of property types and construction styles for their ideal Costa Rica homes. Newer modern homes top the list for sought-after qualities, as well as incredible views, and increasingly, an on-site water source.

Construction Styles

High-end luxury homes accounted for 6.5% of the market in the first quarter and is the smallest market in the region, although responsible for a large portion of the total sold value for the region. The most popular construction types are mid-range priced contemporary and modern homes, representing almost 60% of the local real estate market share. Colonial homes and simple constructions are still significant parts of the market, showing 24.5% of sales and 11% respectively.

Sought After Views

A basic ocean view is what the majority of buyers still want, although these properties are more scarce and are increasing in value. Standard ocean view homes in Costa Ballena accounted for 31% of properties sold. 12.6% of buyers settled for a nice ocean view window at a lower purchase price. Around 9% of buyers splashed out for a premium priced luxury ocean view of the Whale’s Tail or in the cliffs above Dominical. Another 18% of buyers saw the magic in the mountain view and chose their Costa Rica property for reasons other than a nice ocean view. Thirteen percent of buyers found their perfect income-generating properties in lower-lying areas that are closer to town and amenities. And nearly 10% of buyers preferred the peace and remoteness of a property surrounded by jungle with nature as their primary view.

Prices for high-end view properties sold in the first quarter of 2022 in Costa Ballena were:

• Luxury ocean view home from $950,000 - $3,100,000
• Luxury ocean view land from $599,000 for less than an acre up to $2,500,000 for 3.5 acres of the most premium views in Costa Ballena.

Trends in Costa Ballena Real Estate in 2022

Digital nomads are still waiting to be legalized to stay for extended periods in Costa Rica. However, many young foreigners awaiting the regulation to be issued are buying properties now before more people come to settle here when the digital nomad legislation goes active. Strict control is being maintained over the environmental impact of tourist and residential developments, fostering a sense of exclusivity. Our Southern Zone region is especially known for protecting the environment and the sense of being one of the last to get to be here is really driving the market. Retirees who are being drawn to Costa Rica in 2022 are looking to simplify their lives while affluent buyers of Costa Rica real estate are making more health-driven lifestyle choices to improve their quality of life.  Families moving to Costa Rica have been one of the hottest segments of buyers, especially in Ojochal and Uvita. Two new educational facilities have opened in Ojochal in response to the increase in demand: Life Project Education and Osa Jungle Academy.

Increased Tourism Creating Higher Demand

Buyers looking to make rental income who do their research and pick the right property for them are finding great success in 2022. Buyer demand for second homes is up significantly, while other areas of the market are normalizing, according to a recent report from Redfin, Costa Rica is almost without direct competition for luxury tourism. Celebrities visiting Costa Rica are often in the news and bring even more notoriety to the country’s eco-tourism scene. Costa Rica has developed a mature luxury market with a wide range of high-end properties in a variety of settings that attract foreign buyers from around the world. The country has become a haven for yachting and sailing communities as well as for surfers and sport fishing enthusiasts. The topography of this region and proximity to tourism activities keeps this region strong in the rentals market. People visiting here want to feel secluded in nature with amazing views of the coast, the lush, jungle-covered mountains, and the green valleys. Airline passenger numbers entering Costa Rica edged closer toward pre-pandemic levels in the first quarter of 2022, despite the Delta and Omicron variants' surges. Globally, business travel has slowed in the last two years, but a new kind of traveler has helped fill the gap: remote workers, who are coming to Costa Rica in droves. Working from anywhere means leisure travel is no longer limited to vacation. Some have even become full-time digital nomads, traveling from one location to the next without keeping a permanent home. Rather than cramming vacations into a few months in the summer and a few weeks in the winter, untethered travelers are now expanding the green season in Costa Rica (May-November), when leisure travel usually dips. The peak travel season has become flatter and broader in our region of Costa Rica. Tourist and accommodation businesses are enjoying a longer high season, and vacationers are competing feverishly when booking accommodations for the rest of the year. Booking sites like Airbnb and VRBO are seeing higher demand for spring and summer leisure travel despite added costs to plane tickets and road trips from rising fuel prices. Oil has soared to over $100 a barrel as Russia's invasion of Ukraine jolts global markets. But U.S. carriers Delta Air Lines, United Airlines, and American Airlines all recently reported a strong rebound in travel demand after the blip caused by the Omicron coronavirus variant. AirDNA data said the booking pace for travel in the northern hemisphere spring is 49% higher than this time last year and 26% higher than pre-pandemic 2019.

Rental Market Report For 2022

According to AirDNA (an AirBnb rental analysis website), rentals in Escaleras (the most upscale part of Dominical) received an annual revenue of $46,000,000 USD in 2021, with an average nightly rate of around $400 and average occupancy of 57% in 2021. The average nightly rate for a rental in Uvita was $270 with an expected occupancy of about 48% during this time period while the average daily rate for a rental property in Ojochal was around $150 with a 43% expected occupancy rate for the month of June in the off-season. Nearly all rentals in the Costa Ballena were between 90-100% occupancy in the high season between December 2021 and March 2022. Vacasa, which is a leading vacation rental management platform that represents more than 35,000 vacation homes throughout North America, Belize and Costa Rica, shared in a recent Vacation Buyer Report that 42% of buyers are looking to purchase a vacation home in a beach destination. “Forty-two percent of buyers looking to purchase a vacation home chose a beach destination as the market type they’d be most interested in investing in and for good reason,” said Daned Kirkham, Senior Director of Real Estate for Vacasa. “While beach destinations will nearly always draw in a steady stream of guests, buyers can also earn more on homes with the amenities that guests seek most such as beachfront or beach adjacent, a private pool or hot tub, and being pet-friendly. Guests can enjoy working and living from any location largely due to remote and hybrid work environments. Homeowners also benefit from increased income from these longer stays, which often occur during shoulder seasons when there tends to be more availability.” Record-setting momentum continued for short-term rentals (STR), with year-over-year bookings not only exceeding 2021’s numbers but 2020 and 2019’s pre-pandemic numbers as well. Short-term rental demand is greater than ever before in Costa Ballena. Many factors are driving this trend, like the North American and European tourism habits of traveling to beach destinations in the winter months.

Retirement in Costa Rica Rated Second In The World in 2022

While there are plenty of great places to retire in the U.S., Costa Rica offers cheaper housing, better healthcare, and excellent tax incentives, as well as incredible beaches, jungles, and wildlife.  The 2022 Retirement Index from International Living is an annual list of destinations where a retired couple can live comfortably on as little as $2,000 a month. Now in its 31st year, countries are quantified across 10 categories: Housing, Benefits & Discounts, Visas & Residence, Fitting In/Entertainment, Development, Climate, Healthcare, Governance, Opportunity, and Cost of Living.  The top 10 countries for 2022 are a mix of cultural hubs in Europe and outdoor havens in Central and South America and Costa Rica is yet again near the top, in second place. It is rated highly with retirees for its nature and its established communities of expats who love the pura vida lifestyle and the more relaxed, outdoor-oriented pace of life and ease of travel.

Threats to Costa Ballena Real Estate in 2022

With the sales growth of 2021 leading into 2022, new landowners in Costa Rica are encountering problems to find builders for their project, or even to receive a quote for construction. Building permits are lagging due to volume and wait times for ordering materials (as well as increased prices) are all make it more challenging to build your dream home in Costa Rica at this time. Many more potential buyers are backing out of deals in 2022 because the stress of competition is too much for them with multiple competing offers more prevalent this year. With so many more tourists and investors coming to Costa Rica, people are seeing the growth of this region and are speeding to make offers on real estate, later second-guessing their choices. These buyers will often lose out on the property to the next buyers and will continue making offers on other properties as they become more accustomed to the idea of owning real estate in Costa Rica. With the increase in real estate transactions in 2022, prices continue to rise, both in properties and in the cost of living, pricing more potential buyers out of the market.

New Buyers in 2022

The United States continues to be the biggest market for purchasing properties in Costa Rica, accounting for 35% of new website leads coming into our office. Canadian buyers represented around 18.5% of our new leads and France nearly 4%. This has changed from pre-pandemic times when the U.S. accounted for more than 41% of our market and France was just over 1%. Our website traffic also indicates that UK, Germany, and Switzerland are all growing markets that will likely continue to expand in 2022. Australians and Israelis are two new markets that are showing strong interest in Costa Rica real estate in 2022. Last year saw a shift in our real estate market towards favoring sellers, with sold property price increases reflecting this trend. This has attracted significantly more buyers to purchase properties in Costa Ballena sight-unseen than ever before as people rush to get into the market before prices increase further. The overall number of listings for sale at the start of 2022 fell by 13% compared to last quarter. Of the over 300 properties that were for sale in Costa Ballena at the start of 2022, 17 were taken off the market by listers who decided to keep their properties after all. The most typical reason for this was that they wanted to keep the property for themselves after seeing the increasing value of their property in light of the travel restrictions during the pandemic and the resounding international interest in Costa Rica creating high rental returns.

Expert Advice For Our Clients

Our Osa Tropical Properties team of expert realtors want prospective buyers to know all of the ins and outs of our market. We have the knowledge and the tools to help those looking to invest in Costa Rica and will offer detailed one-on-one service from start to sold and beyond. Here are just a few helpful tips to get you started in your property search in 2022:

• Listen to your realtor. Our goal is to advocate for you with all of our accumulated knowledge and experience. You will be our future neighbors one day and we have no interest in deceiving you.
• There are no dumb questions. We know how scary it is to buy real estate in a foreign country and that you will have a lot of questions about the process and what your life here will be like. We have probably answered every question a hundred times before and we are happy to do so every time. We want you to feel completely secure in your decision to move to Costa Rica.
• Hire a property manager if you don't plan on living here. You will want to have someone you trust to check on your property periodically, making sure that there is nothing that needs maintenance and that your property is secure.
• Buy the land around your property to ensure privacy from neighbors if this is something you value. With the increasing number of sales, properties that have been vacant for years are being sold and many have been surprised by the amount of new neighbors that they have.
• Home insurance is invaluable in case of theft or emergency. It is not expensive and it will give you more peace of mind in the security of your assets in Costa Rica.

To learn more about the intricacies of our real estate market, contact our team via the form below.