2020 San Juan Del Sur Property Market Report
Thinking about buying property in Nicaragua? Read this first.
It’s a new year in Nica and there’s lots happening in the San Juan Del Sur property market. The main takeaway is that prices are low and sales have picked back up.
In October, November and December of 2019 property closing numbers returned to 2017 levels. About as many homes and condos were sold as compared to the same time two years ago, with sales values about 30% lower. That adds up to a lot of buyers taking advantage of low prices.
A little background to begin. From 2010 until April 2018 property values steadily increased in the San Juan Del Sur area. High single to low double digit annual appreciation was common for many properties in or near town. Especially those with ocean views. Prior to April 2018 construction was keeping pace with demand and new home sales were solid.
After the political issues began in April 2018 year over year sales numbers dropped dramatically. From April until December 2018 we saw 75 percent fewer transaction than the same period in 2017. Prices came down too, though there was a lag in that. Many sellers didn’t think the dip would last. As a result many were slow to decrease their askings to realistic market levels.
Sales began to pick up a bit in December 2018 & January 2019. Sellers had become more realistic about current property values, and adjusted accordingly. By that time the actual closing prices on sales had stabilized. On comparable ocean view homes and condos we were seeing sales 25-35% below peak levels.
Volume increased steadily from January to September of 2019. We saw 60 - 70% of the comparable number of closings from 2017. Then starting in October 2019 sales volume shot up. In the final three months of 2019 we saw as many closings as we did at the peak of the market in 2017. There are multiple related reasons for that.
By October most sellers had brought their asking prices in line with market values. Very few were still asking what they were two years ago. Most properties still on the market had by dropped their prices by the 30% mentioned above, making them more attractive. New listings were mostly coming in at appropriate levels.
International buyers had also returned to the market. Many had decided that the value for money now balanced well against the risk profile. There is a huge market-specific component to this though. San Juan Del Sur has held up remarkably well and is rebounding better than anywhere else in the country. Sales in other coastal regions, Granada and Managua are still sluggish. San Juan has shown itself to be the most resilient market in the country.
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In San Juan Del Sur the general consensus is that the worst of whatever was going to happen has already done so. The country has been calm for a year and a half. And even in the most challenging weeks of political issues San Juan Del Sur had a peaceful experience.
What does that mean for 2020?
The expectation is that the current trend of high closing numbers, but excellent prices, will continue for at least the short term. There are a lot of great values to be had on property, many at or below replacement construction cost.
We should continue to see more homes and condos selling than building lots. However there is a caveat to that. Premium lots at deep discounts like the one below will continue to be popular. Long term the low current construction numbers should help property values as well. New inventory coming to market will continue to be low.
40% off this oceanfront lot near San Juan.
Buyers coming into the market now are generally more affluent that two years ago. Cash buyers are coming in to take advantage of the discounts. Financed purchases are much less common as domestic interest rates are unattractive at 12% or more.
Most buyers are American, Canadian or of Nicaraguan descent but living abroad. Buyer incomes are generally not tied to Nicaraguan economy. They therefore have the luxury of longer timelines to enjoy appreciation. Buyers can trade off lower current short term rents for the deep discounts.
Rental numbers are still lower than this time in 2017, but they are increasing. New Years 2020 saw the town at nearly 100% capacity for accommodation. If you’re looking at a rental property expect lower income from AirBnB & VRBO in the the short term. That should be more than balanced out by the discount you get on closing day.
Thanks for reading. If you want an more insight contact me any of the ways below.
Joel Stott-Jess
Cell / WhatsApp: (+505) 8176 8624
Skype: joelstottjess
Joel Stott-Jess is a New York Times featured agent / broker in San Juan Del Sur.
Originally from Alberta, Canada he has been doing business in Nicaragua since 2014.
An investment consultant, serial entrepreneur, surfer, and outdoor enthusiast he is an expert on the real estate and business markets in Nicaragua. He also operates The Central Investor, a real estate and investment blog focused on the entire Central American region.
