New York Times
The housing market in the San Jose region is strongly tilted in favor of buyers, though demand is picking up as the global pandemic recedes.
A Modern Four-Bedroom Retreat in Costa Rica
$4.1 MILLION
This four-bedroom home is built into a lush hillside in the canton of Escazu, an affluent suburb of Costa Rica’s capital city of San Jose. Constructed from concrete in 2003, it sits on 3.4 sloping acres with gardens and a pond in the mountainous San Antonio district.
The owner, a painter, designed the house around nature, arts and meditation — the three “pillars” that guide his lifestyle, said Alejandra Ibarra, an agent with Sotheby’s International Realty, which has the listing.
The house features a spacious art studio, a gallery for displaying art, and wellness amenities including a pool with a Jacuzzi, a gym and a steam room. Walking trails on the grounds are punctuated by sitting areas amid native plants. A natural spring supplies the home’s water.
The stone driveway leads to a large courtyard with a circular fountain. The two massive wood doors at the main entrance are from India, Ms. Ibarra said. Inside, the marble-floored foyer is slightly raised above the home’s central living area, a glass-walled space combining the living room, dining room and kitchen.
The living room is demarcated by a curved wall lined with sofa seating and bamboo laminate flooring. An intricately patterned brick dome built into the ceiling is both decorative and functional. “The owner likes to give parties with live music, and this dome enhances the sound of the music,” Ms. Ibarra said.
The kitchen, designed more for cooking than gathering, has marble floors, dark hardwood cabinets, a small island, and a breakfast bar facing the windows.
The art gallery, with built-in lighting and bamboo floors, is off the living room. A half level below houses the 500-square-foot art studio, which has high ceilings and glass walls.
“You feel like you’re in the forest,” Ms. Ibarra said. “It’s very inspiring.”
From the foyer, a spiral staircase leads down to one bedroom with an en suite bath. A marble staircase near the front door ascends to the third floor, which has a TV room and two master bedrooms, each with its own office area (one of which could serve as a fourth bedroom). One of the rooms also has a large private terrace with views of the Cerro Pico Blanco mountain area.
A few steps below the main living space, the pool area is encased in curved glass walls, offering panoramic mountain views. The area has a heated swimming pool and a whirlpool, along with a tiled exercise room, steam room and half-bath.
A separate guesthouse has two more bedrooms, a bath, kitchenette and living area.
The canton of Escazu, with about 60,000 residents, is known for its upscale shopping malls, fine dining and private schools. Located in central Costa Rica, about 15 minutes from downtown San Jose, the area has attracted a large number of Americans and Europeans who both live and work there. Several embassies and numerous ambassadors’ residences are also in Escazu. Much of the area’s social life revolves around the private Costa Rica Country Club, in the San Rafael district, Ms. Ibarra said.
Two popular tourist destinations within a 90-minute drive are Tapantí-Macizo de la Muerte National Park, 225 square miles of protected rain forest in Cartago Province; and Poás Volcano National Park, with an 8,860-foot active volcano, in Alajuela Province. Juan Santamaría International Airport in San Jose is about 30 minutes west.
Market Overview
The housing market in the San Jose region is strongly tilted in favor of buyers, thanks to an oversupply of inventory and a struggling economy. For several years the country has been grappling with a rising fiscal deficit and high unemployment. In 2019, the deficit reached 6.96 percent of GDP despite reforms adopted the previous year. In January, Costa Rica’s government announced additional reforms, including reductions in public spending and refinancing expensive debt.
The absence of a multiple listing service in Costa Rica causes additional problems for the housing market, said Todd Cutter, an owner-broker at 2Costa Rica Real Estate. Many sellers tend to put their homes on the market “at their dream price,” without consulting a broker, and then watch as it languishes, he said.
“We have inventory upon inventory in Escazu,” Mr. Cutter said. “Above the $750,000 mark, in the luxury range, we have years’ worth of inventory. A bulk of that we can call stale — it’s been out there at an unrealistic price for a certain amount of time. And that’s having an impact on new inventory.”
Prices for new construction at the upper end of the market range from about $185 to $280 a square foot, he said. Resales typically range from $115 to $162 a square foot, with newer homes drawing slightly more. A four-bedroom, single-family home in a newer gated community with a host of amenities typically sells for $1 million to $1.3 million, Mr. Cutter said.
Ms. Ibarra said that two-bedroom condos in Escazu range from about $150,000 for a smaller unit to around $400,000 for a larger unit in a gated community.
Both agents said inquiries from American buyers have picked up significantly since the coronavirus shutdowns. While Costa Rica’s borders are currently closed to nonresidents, brokers are anticipating a flurry of activity from American city dwellers looking to relocate in the coming months, they said.
“They are realizing it’s a quick flight here, it’s close to the same time zone, and it’s easy for them to work from here,” Mr. Cutter said.
Costa Rican authorities acted swiftly to limit the spread of the virus early, and as of last week, the country had recorded just 10 deaths. The border shutdown was recently extended to June 30, but Bernardo Gomez, a real estate lawyer in San Jose, said it is widely expected to be extended again into July.
“I have clients from Atlanta whose extended family always spends the Fourth of July in Costa Rica and they are already aware of this and not planning to come,” he said.
Before the pandemic, the Costa Rican government was trying to stabilize the fiscal woes that have hobbled the country in recent years. Now, the sharp decline in tourism revenues caused by the crisis is expected to worsen the economy, with the poor and vulnerable likely to be “severely affected,” according to a May 1 report from the International Monetary Fund. The I.M.F. has approved roughly $500 million in emergency relief assistance.
Who Buys in Escazu
Foreign buyers in the San Jose area are mainly North American and European, agents said.
Costa Rica’s coastal areas — the Caribbean Sea to the east, the Pacific Ocean to the west — are more mixed, but there tend to be enclaves of “hyper-focused” foreign populations, Mr. Cutter said.
For example, “you’ll have one with a huge Argentinian population, and then one with a large Israeli population,” he said.
Buying Basics
There are no restrictions on foreign buyers in Costa Rica.
All transactions require a lawyer/notary. Because real estate agents are largely unregulated in Costa Rica, buyers are advised to consult with an agent from a major real estate firm with its own codes of conduct to minimize risks, Mr. Gomez said.
Very few local banks have mortgage lending programs for nonresidents, he said.
The agent’s commission, paid by the seller, is usually 5 or 6 percent, Ms. Ibarra said.
Websites
Languages and Currency
Spanish; colón (1 colón = $0.002). The American dollar is widely accepted.
Taxes and Fees
Closing costs include legal fees (1.1 to 1.5 percent of the purchase price), payment of legal stamps (0.86 percent) and a transfer tax (1.5 percent), Mr. Gomez said.
Annual property taxes on this home are around $10,000, Ms. Ibarra said.