Very interesting article on sales in one high-end development (Peninsula Papagayo where ER has numerous properties):
http://www.internationalpropertyjou...er-costa-rica-project-sees-jump-in-sales.html
Makes some very interesting observations, including how the name of a product can effect sales.
"We started to see a turnaround in the market beginning in December of 2009, towards the end of the month. That was the first normal high season in terms of occupancy since the recession began. Customers began returning to consider property. Fewer “bottom feeders” and more serious customers began to take property tours with us. In December, we put out two contracts worth over $2 million each on Four Seasons private villas. That was the start of the 2010 high season. We are now up to 14 contracts on the year with sales ranging from $800,000 up to over $2 million."
"To our surprise, we are still selling lots. The buyer has changed. We no longer see speculative buying. The people who are now buying actually plan to live here or spend a significant amount of time here. We had several “luxury property consultants or experts” tell us that we would no longer be able to sell undeveloped properties. It turns out that they were incorrect. I currently have six lots in escrow."
"What is still a challenge for me to sell are our condos. For some reason, one of the most affected products for us is completed condos. Personally, I believe that the word “condo” has become a bad word associated with financial loss as a result of the U.S. real estate market bubble burst. I have “villas” that continue to sell. I cannot fully describe the difference between a “villa,” a “condo” or a “townhome,” but I can tell you which one will sell and which will not, based on the name. I feel that our next set of condo type properties will likely be called villas, cottages or something of that nature. I actually do have two condos in escrow right now. The prices of the condos have come down by such a significant manner that they are extremely attractive. I would associate the term “condo” with “time share.” It has become sort of a bad word. Now, we need to come up with our term similar to “fractional ownership.”"
"It depends on the product. Our Four Seasons branded product is fully maintaining its pre-recession values. We continue to sell branded product for prices that compare to 2005 and 2006. Villas in the Four Seasons Costa Rica have sold between $1.9 million and $3.5 million. We have Four Seasons Private Villas which are 3-bedroom, 4-bathroom units with a small pool. I currently have two on the market in the $2.5 to $2.65 range. These are re-sale units. The owners should not have to take a loss on their units. There is a pretty steady demand for them. There is also a very high demand for the larger estate homes in the Four Seasons. Unfortunately, I do not have any available at this time. Those homes in this market would sell in the $6 to $8 million range."
"Our lots have been reduced in price by about 30 percent across the board to realign ourselves with the world market. I have found that buyers will not consider you seriously if you cannot show that you have responded to the recession. Our condos have been reduced by about 40 percent from the pre-recession high."
"The buyer is different. There are no longer buyers with speculative interest keeping demand high. Buyers can no longer be rushed, squeezed or coerced in any way. Your sales team must be extremely service oriented to sell in this market. You must treat the customer extremely well and spend quite a bit of time with them or they will simply go elsewhere."
