In working on a market report here to provide an overview of some of the present market drivers and conditions in the Manuel Antonio area, I took some time to reflect and discuss with our team the duality of a ROBUST market and volume of sales, combined with the reality that we have a lot of inventory which has been for sale for years and continues to languish on the market. The reality became clear both with discussion amongst our own team and with a host of colleagues in the area... BUYERS ARE THERE, FUNDS ARE IN PLACE, BUT THERE REMAINS A REAL DISCREPENCY BETWEEN BUYERS EXPECTATIONS OF WHAT THEIR MONEY WILL GET THEM AND SELLERS EXPECTATIONS AS TO WHAT THEIR PROPERTIES SHOULD BE WORTH.
Evidence of this phenomenon is clear, as we have seen very real and relatively quick sales of some turn key ready luxury estates which have the new design, high end finishes, style and “estate” feels in the 7 figure plus range in the past 12 months. Simultaneously, we have a solid inventory of homes on the market in his $995,000-$1,600,000 price range whose time on the market exceeds 24 months and in some cases even more. How can this be explained? It is a complex and maturing market and the promising news is that we seeing an increased volume of showings, interest and exposure on luxury estate properties and premier listings. Never before have we seen a more voluminous set of qualified buyers, connected with the area, focused on owning a retirement, vacation or investment property here and with either the cash on hand or the access to it to enable a purchase if they find the right property. An equally evident trend are sellers who have beautiful homes, iconic locations and some with good rental histories but whose layout, finishes, or decor perhaps is not matching up with clients visions and expectations for their “dream home”. What is true in any real estate market is that to procure sales, there needs to be a sense of exclusivity, value and urgency or buyers will stay on the sideline. This is especially true in second or vacation home markets where buyers typically do not NEED the home.. its about fulfilling a dream, and as we all know.. rarely do our dreams include sacrifices or settling.. :o). That could be an entire blog in and of itself which we will table for another time.
So, the real estate stand off begins. Buyers with cash, willing to pay for their dreams, sellers with beautiful properties, some with great cash flow, but that don’t fit the vision of the buyers. How is this “stand off” being resolved?? In some cases it isn’t, sellers who are enjoying their second homes, making solid returns commit to holding and hope that the market conditions and values in the area grow so that while they wait for the perfect buyers, values will increase which will make their homes a “better value” and allow buyers who see the need for some remodel or vision work to undertake that responsibility and still feel that they have an upside. In other cases, sellers are lowering their prices so that buyers, who might not like the color, bathroom finishes, furniture etc can see the upside in purchasing and being able to remodel while still having a value in their end investment.
This second opportunity is what I really wanted to discuss as in the Manuel Antonio, where we have such a finite amount of real estate and much of the prime locations were purchased and initially developed 10, 15, or 20+ years ago, there is a very real market niche which is already emerging and where I think that there is perhaps the single largest element of untapped investment opportunity in this area….”the fixer upper”. Since 95% of investors do not “dream” of a project, a remodel, working with an architect, designers, shopping, etc in their own homes towns, much less in a foreign country, the reality is that we a lot of homes with great bones and locations which simply need some level of redesign, remodel or even just refurnishing to unlock the potential in their value both for rentals for sales pricing. Locally there are very few pure developers living full time (a lot of dreamers, but not a lot of capital) and the vast majority of potential investors just want the dream. There is a growing demand and very real opportunity for investors who have the vision and patience to take on these projects and end up with great value and immediately equity in their homes. While the process is not for everyone, if you have been considering an investment here, haven’t found what you are looking for or are trying to find ways to increase upside, talk to your local realtor about those unpolished diamonds.. built in yesterday but with good bones, views or locations. Our firm has sold 4 homes in the past 12 months whose new owners are reveling in the results and “blocking our calls” begging them to allow us to relist the properties. Is it easy.. no.. are there headaches and challenges along the way.. absolutely. BUT, there are a growing field of top notch professionals, architects, designers and new materials available which were not even to be dreamed of when many homes here were built and while it takes vision, capital and the will to see beyond the obvious, those attributes are very well compensated and the hardships easily forgotten when 4-6 months later you have huge equity in the investment.
Here are just a few of our top picks for these uncut diamonds, just waiting for the right buyer:
CASA MONO TITI
