2024 Real Estate Market Report: Southern Pacific Costa Rica
Prepared by Blue Zone Realty International
Market Overview
The Southern Pacific region of Costa Rica experienced a dynamic real estate market throughout 2024, marked by both expansion and challenges. The year began with a strong start, but global economic conditions influenced buyer activity in the middle of the year. Despite these fluctuations, demand remained steady in key property segments, and the market showed signs of resilience as the year progressed.
First Quarter Analysis
The first quarter of 2024 saw home sales in the Southern Pacific region 4% lower compared to the same period in 2023. Additionally, the average sale price of homes was 8% lower than the previous year. However, market momentum remained positive, with an increase in overall buyer interest. Ocean-view homes with three or more bedrooms saw a notable improvement in demand, with days on market decreasing by 24% compared to the previous year.
Second Quarter Challenges
The second quarter presented challenges due to global market conditions, particularly the downturn in the U.S. housing market. As a significant number of buyers in Costa Rica originate from the U.S., this shift led to a more cautious approach among potential buyers. However, urban areas priced between $400,000 and $500,000 continued to perform at levels comparable to 2023, showing stability in the mid-range market.
Mid-Year Trends
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Increased Market Activity: The number of properties closing within a month rose from 2.9% in 2023 to 7.4% in 2024, indicating more decisive buying behavior.
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Strong Demand for Homes: Properties priced between $300,000 and $500,000 performed well, with the average days on market for houses dropping from 273 days in 2023 to 175 days in 2024.
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New Construction vs. Older Homes: Homes built within the last six years moved significantly faster than older properties, as buyers demonstrated a preference for modern design and updated amenities.
Commercial Real Estate
Sales of commercial properties, including hotels and office buildings, saw a modest decline compared to 2023. This was largely due to shifts in global investment trends, as well as financial uncertainty affecting business expansion decisions. However, interest in income-generating properties, such as rental units, remained steady, particularly in high-tourism areas.
Luxury Market Performance
Luxury properties priced between $1,000,000 and $1,500,000 remained strong in 2024, with demand largely driven by North American and European buyers seeking high-end residences. Many of these homes featured ocean views, private amenities, and premium finishes, making them highly desirable.
Location, Location, Location
Properties with spectacular ocean views, easy access to key amenities, and proximity to beaches continued to be in high demand. Homes in these prime locations often sold faster and at or above asking prices, reflecting buyers' preference for convenience and lifestyle-focused investments.
Meanwhile, more remote properties or those requiring significant infrastructure improvements faced longer sales cycles, as buyers were increasingly prioritizing move-in-ready options.
Fourth Quarter Resurgence
The final quarter of 2024 saw a notable increase in website traffic and buyer inquiries, particularly from the U.S. and Canada. This renewed interest suggests that confidence in Costa Rica's real estate market is growing again, possibly due to stabilizing global economic conditions. Sellers with well-positioned properties benefited from this resurgence, with multiple offer situations becoming more frequent in highly desirable locations.
Future Outlook
Looking ahead to 2025, projections indicate that real estate transactions are expected to increase significantly, while home prices are likely to remain stable. Key infrastructure improvements, including the development of private schools, new health facilities, and additional dining and retail options, are expected to drive demand in areas such as Dominical, Uvita, and Ojochal. These enhancements will further establish the Southern Pacific region as a top destination for international buyers seeking both investment properties and primary residences. The forecast for Luxury Homes above $3,000,000.00 in 2025 looks strong and robust.
Conclusion
Overall, 2024 was a year of mixed results for real estate in Costa Rica’s Southern Pacific region. While economic challenges temporarily slowed transactions, the market remained resilient, particularly in prime locations and the luxury segment. With strong demand anticipated in 2025, coupled with ongoing infrastructure development, the region is well-positioned for another promising year in real estate.
