Boom time greed and condo ghost towns in Playas del Coco

Rick Vogel, the genial host at Rancho Armadillo in Playas del Coco, is a good natured guy. But he pulls no punches when describing what’s going on in his adopted town and country.

“Pigs get fat and hogs get slaughtered,” he says, speaking of boom time greed in Coco.

Boom time became bust time a few years ago. Bruce Hammond of Better Homes Realty in Playas del Coco said that as far as he could see, the downturn here started in July of 2008 but by October of that year it was like “someone hit the ‘off’ switch.” Almost $3 billion of planned development was put on hold.

But back in the days of sky’s-the-limit condo flipping there were realtors, says Rick, who pulled some pretty hoggish stunts. Like selling a piece of property they knew didn’t have access to water and never would, not once but multiple times, as each new buyer discovered that he could build his dream home but his dream faucets would always be dry.

“We’re in a desert here,” said Rick. “The problem is water.” I’ve been hearing that sentiment everywhere I go in Costa Rica, from the ‘cielo roto’ (broken sky) valleys where it rains almost all the time, to the dry Guanacaste coast, even hotter and drier since swaths of the coastal dry forests have been cut down.

Another trick he saw was that a realtor would sell a local property for, say, $200,000, get a $50,000 deposit, use that $50,000 to buy the property from the Tico owners, then pocket the remaining $150,000.

These are not local Tico realtors, but foreigners with the imprimatur of multinational realty companies on their business cards. (I learned that you pay maybe $25,000 for a franchise and that you get pretty much nothing but the name).

Many condo projects in Costa Rica ground to a halt when the world economy took a nosedive

Playas del Coco has dozens of condo projects that started up years ago and now languish half-completed, rebar ladders rusting and cement foundations crumbling before they’re even built on. One huge construction crane visible in a development up the hill hasn’t moved, say the locals, for at least a year.

Many condos were sold in pre-construction, and some of those condos still haven’t been built. I met an African-American man from Louisiana (I comment on his race because most U.S. expats I meet are white) in line at the ATM.

“Do you live here?” I asked.

“For better or worse,” he said, “I guess I do. Or I’m trying.”

He’d bought a pre-construction condo from Mapache and, four years later, it still wasn’t built. I don’t think Mapache is the only developer not delivering. The building of these mammoth complexes goes in phases, with continued construction funded by condo sales. When the world economic downturn put a huge dent in sales, much construction ground to a halt.

We talked to a Tica who ran a bar in Paraiso (near Playa Negra) who said many of the locals are out of work because all the developments that were employing them as builders or watchmen or cooks for the workers are ‘parado’ – stopped.

Like they say, when the United States sneezes, Costa Rica gets pneumonia.

If you want to look for a silver lining, it might be that in this climate it’s a buyer’s market. But as always, buyer beware.

Photos by David Webster Smith