A
Sleepy Costa
Rican Town Gains
in Popularity
By Kevin Brass,
The New York
Times
PLAYA HERMOSA,
COSTA RICA -
Claude
Laferrière and
his wife,
Silvia, first
abandoned
Montreal for
this sleepy
beach town in
the early '90s,
enticed by its
picturesque bay
and deserted
stretch of
beach.
Mr. Laferrière,
a musician,
built a small
hotel he called
Villa del Sueño
near the beach,
creating a road
out of an old
path used to
move cows from
one field to
another. On
weekend nights
he often
performed on the
hotel deck with
his band,
playing old rock
songs for
tourists and a
handful of
locals.
"There was not
much going on,"
Mr. Laferrière
said.
In many ways,
Playa Hermosa
remains the
dusty beach town
that the
Laferrières
discovered 18
years ago.
Located in a
small valley
about 20 minutes
from the
international
airport in
Liberia (and not
to be confused
with another
beach town
called Hermosa
to the south),
Playa Hermosa's
narrow roads are
still unpaved
through most of
the beach area,
which is a
checkerboard of
small wood
houses and
corrals.
Yet Playa
Hermosa has
developed into
one of the most
active -- and
expensive --
second home
markets in
Central America.
After a flurry
of building, the
hillside above
the beach front
is covered in
large homes,
most priced at
$1 million or
more.
Largely ignored
in Costa Rica's
initial
second-home
construction
boom, Hermosa
jumped onto the
development
radar about five
years ago, when
a group of
high-end luxury
developments
were announced
for the
Guanacaste area.
"Things happened
very quickly,"
said Patrick
Harris, a sales
associate with
Plantación
Properties, a
property company
in Hermosa.
Today the market
has slowed in
the wake of the
economic
problems in the
United States,
which is home to
the majority of
the buyers in
Hermosa. And
prices have
dropped 20
percent or more
on some homes,
local agents
say.
Nevertheless,
the average
asking price for
an ocean view
condo in the
Hermosa area,
including
neighboring
Coco, remains
about $378 a
square foot, or
$4069 a square
meter. That is
one of the
highest averages
in the region,
according to
Reveal Real
Estate, and
compares with
about $280 a
square foot in
Panama City or
in Ambergris
Caye, the most
popular tourist
destination in
Belize. (Prices
for Costa Rica's
second home
market are
routinely listed
in U.S.
dollars.)
The first major
high-end project
to open in the
area was
Peninsula
Papagayo. The
low-density
development
covers
2,300-acres, or
930 hectares,
and is anchored
by a Four
Seasons hotel,
which is located
directly across
the bay from
Hermosa.
Soon after the
Four Seasons
opened in 2004,
several other
luxury hotel
companies
announced their
own plans for
Guanacaste,
including the
St. Regis,
Rosewood and
Ritz-Carlton
chains. And a
company headed
by the founder
of AOL, Steve
Case, publicized
plans for an
ambitious
eco-friendly
development
called Cacique
on 650 acres
just south of
Hermosa.
Almost all of
the big
projects,
including
Cacique, were
delayed in the
wake of the
economic crisis.
By then,
however, Hermosa
was in the midst
of a home
construction
boom.
"All these big
hotel chains
putting money
into this area,
I thought: 'They
are doing it for
a reason,"' said
Claudia Maria
Hillmeier, who
is building 20
homes on the
coast near
Hermosa. The
houses range
from 2,500 to
4,000 square
feet, or 232 to
371 square
meters, and are
priced at
$595,000 to $1
million.
"You go where
the money goes,"
Ms. Hillmeier
said.
Many of the
early buyers in
Hermosa were
investors who
bought land and
built custom
homes to sell,
according to
Michael Simons,
a partner in
ReMax Los Tres
Amigos, a
property agency
in Playa Hermosa
.
"Five or six
years ago you
couldn't find a
finished home,"
Mr. Simons said.
"It just didn't
exist."
Last year Franz
and Elizabeth
Vogt of Florida
paid $550,000
for a
half-finished
Spanish-style
house on the
hill overlooking
Hermosa. The
house, abandoned
years earlier,
was covered in
vegetation and
inhabited by
iguanas and a
family of
raccoons.
Mr. Vogt, a
contractor,
fixed up the
house and the
couple moved
their two
daughters to
Costa Rica. But
he had trouble
finding work and
this year the
Vogts decided to
sell the house
and move to
Austria, Mr.
Vogt's home
country.
They ultimately
got $667,000 for
the house, about
$80,000 less
than their
initial asking
price. "It
appeared that
the real estate
market was and
probably still
is really
floundering,"
Mr. Vogt said in
an e-mail
message. "Many
people were
trying to sell
expensive homes,
and had had them
on the market
for a long time
with no action."
Sales have
picked up in
recent months
but prices
remain depressed
for anything but
top properties,
local agents
say. Patrick
Harris and his
wife, Molly, who
works in sales
for Peninsula
Papagayo,
recently sold a
two-bedroom,
900-square-foot
condominium near
the beach for
about $200,000,
a hard-to-find
price point in
Costa Rica
coastal
communities.
Beyond the
slowdown, the
burst of new
development has
come with a
price, critics
say. Petty crime
has escalated,
along with
traffic
congestion on
the area's
two-lane roads.
And new
developments
have exacerbated
water shortages
in the largely
arid region,
environmentalists
say.
Yet Hermosa
remains
relatively calm
compared with
other Costa Rica
beach towns.
This article
originally
appeared in
The New York
Times.
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