Having just completed a webinar with some of my colleagues from around the globe in Who’s Who in Luxury Real Estate, some important clarity and insight became remarkably clear to me.
One of the undeniable realities and results of the current pandemic is that there has been an enormous SURGE in investment, real estate interest and migration to areas which have traditionally been resort markets OR more rural areas. The quarantine and resulting effects have shown much of the world the enormous blessings and quality of life that having open spaces, connectivity with nature, activities, and wellness brings to your life and that of your family. As we dialogue with brokers from metro centers where real estate sales, closings and movement are almost uniformly WELL below averages, demand in more rural or destination markets across the USA are on FIRE. Top Brokers like Brian Hazen from Aspen, Colorado, Monica Monson from Scottsdale, Arizona, and Nancy Tallman from Park City, Utah all outlined record-breaking volume, shortages of 50% or more in inventory and ongoing demand from clients seeking opportunities in these region market places.
Demand for international markets has also skyrocketed, but that demand and interest has not yet converted into the same shortage of inventory and rising prices which is now the norm in many, if not most of these regional destinations within the USA.
International Living, a well-known information site for US and Canadian investors looking ot invest or relocate abroad has seen an increase in more than 500% in its web visitors since May first and more and more North American look to move beyond its borders seeking a better quality of life. These international investors are in most cases, focusing on destinations whose natural setting and lifestyle mirror some of the aforementioned US cities where space, connectivity with nature and activities are part of the lifestyle, but also represent an increasing number of US citizens who are looking to live outside of the political and social environment which seems to deteriorate daily.
The GOOD news and one of the epiphanies for me as we conducted the webinar is that while demand and interest is up in all of these market places, destination markets which require international travel or even domestic destinations like Hawaii, that require special quarantine or other measures have TOTALLY UNIQUE market conditions. These international or island destinations, on the call was Tom Tezak from Maui, Ian Hurdle from Turks and Caicos and myself from Costa Rica, and each of our firms have seen tremendous interest, but with border closures have seen virtually ZERO physical clients in the past 4 months. Sure there are some virtual sales, but the zero tourism environment has and continues to put tremendous pressure on sellers who are not enjoying the lucrative rental income and buyer demand is pent up and building like a damn, just waiting for travel to open.
There is NO DOUBT that we are going to see in many of these destination markets a very strong BUYERS MARKET in the next 6-12 months. Costa Rica’s 4 month border closure, now set to end on August 1st, with aperture to UK, European Union and Canada, has impacted the tourism industry immensely and even with aperture, most experts are not predicting any kind of robust recovery for another 12-18 months until vaccines and travel confidence rebounds robustly. This virtual freeze on income has owners of many condos, villas, boutique and resort hotels who have been considering selling for years or been priced at top of the market levels due to the strength of their businesses and income reconsidering and getting aggressive. VALUES combined with the intrinsic draws of natural beauty, peaceful living, wellness and ecology are creating opportunities like we have not seen in years in Costa Rica. With the first border aperture we will see the first cracks in the pent up demand and with the US border opening in the coming months, there is little doubt that we are going to see some of the most advantageous investment opportunities Costa Rica has seen in decades.
Only questions are when the waves of investment come in and how early in the process are you in taking advantage of this unique cycle….