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(506) 223-1327        Published  Thursday, Feb. 2, 2006, Vol. 6, No. 24          E-mail us    
Jo Stuart
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Pacific real estate market continues to astound
Go west, young man . . . if you have money
By Jesse Froehling
of  the A.M. Costa Rica staff

The hot Pacific real estate market continues to hum even as sales in the Central Valley receive mixed reviews.

Despite the doomsayers, those in the industry continue to report a strong Pacific coast  market, thanks, in part, to the graying of North America and the retiree refugees it creates.

Although it is difficult to sum up the Central Valley market, a few trends emerge in conversations with local agents.  First, Escazú, Santa Ana and other upscale neighborhoods west of San José were overbuilt with condominiums a few years ago.  However, retiring baby-boomers, a nasty Atlantic Hurricane season in Florida and disgust with  U.S. President George Bush are some of the factors that have led people to come here and fill them, said Ivo Henfling of Go Dutch Realty.

“These people want something they can lock up and leave for a couple of months while they travel or visit children,” Henfling said.  According to Henfling, the townhouses in gated communities that stood empty for the last couple of years are filling with Colombians and Venezuelans. 

By contrast, the typical North American buyer is retired and climbing stairs grates on his or her old bones.  Therefore, they look for one-story homes or high-rise condominiums with a view and an elevator, Henfling said. 

Another factor contributing to the increase of North-American retirees is the many direct flights between Miami, Dallas, Los Angeles and others that provide people with a short three or four-hour plane ride to be with loved ones back in the United States.  These people are generally looking to spend between $150,000 and $300,000, Henfling said.  Those living off Social Security checks go to Panamá or Nicaragua.

In the past, higher value homes were selling rapidly, Henfling said, but after the terrorist attacks of Sept. 11, 2001, the United States government began to crack down on money laundering and the use of offshore bank accounts.  Since then, pricier homes have moved slowly, he said.  When asked if the closed Villalobos money exchange had an effect on the market, Henfling said that many of Villalobos' investors were renting expensive homes, not buying.  As a result, those, too, stood empty for a time after the Villalobos Brothers closed their operation, but now, three years later, those homes have pretty much filled back up, he said.   

Barry Ashworth with Coronado Realty echoes many of Henfling's sentiments.  However, Ashworth said that the majority of his clients are looking for more traditional homes with gardens and such.  He also gets families that have moved here on business seeking his help, he said.  Many times, these families have children and so finding proper schooling can limit choices.

“There are still some good deals west of San José,” Ashworth said.

However, one Central Valley broker with 40 years experience doesn't agree with the assessments of Ashworth and Henfling.  The market has stayed very dormant this year, the agent said.  What they all seem to agree on is that, people in the Central Valley generally pay a price similar to a home's appraisal.  On the beach, that's not the case.

Speculation has driven prices sky high. Government regulation in many beach zones outlaws outright ownership. Beach concessions are only leased for 10 years. But people are still buying beachside property because it is cheaper in Costa Rica than it is in  the United States, said one broker.
A maritime zone law in Costa Rica makes it illegal to build anything within 50 meters of the high tide line.  The next 150 meters is government concessioned land.  This means that the Costa Rica government grants concessions to lessees allowing them to build a home.  However, after the concession expires the government can take over the home if officials see fit.

“How could I tell a client to build on the beach if the lease is only good for 10 years and after that no one knows what will happen?” the broker said.  It is important to note that in some parts of the country such as Jacó and much of Tamarindo and the area around, people may own land outright up to the 50-meter no-build zone.  In this case, homeowners don't have to worry about how the local officials feel. In a very few old holdings land is owned right up to the surf.

The Pacific market is such that some homes are selling for three times the amount they went for a year or 18 months ago, said many beach property agents.

“Some of our investors are expecting 50 percent returns in the first year,” said Steve Broyles, an agent in Tamarindo.  “And in many cases, they are happy with their investment,” he said. 

Land value in Tamarindo could be the highest in the country.  In some places, it sells for $500 per square meter, Broyles said.  What has happened is that the typical developer coming into the area has a more professional background and is buying a large chunk of land for a long-term investment plan, Broyles said.  In the past, amateur developers could still get at the Tamarindo real estate market. 

“When land here only cost $30 per square meter, there was a much larger margin of error,” said Broyles of Bratton Broyles & Associates.  But despite the fact that prices have increased dramatically in the last three years, there are still lots of opportunities here that don't exist in other parts of the country, Broyles said.  There are direct flights now that arrive at the nearby Daniel Oduber international airport in Liberia.  There is a large population of expats, and there are a large population of business owners who are accustomed to doing business much as it is done in their home country, Broyles said.  As a result, people still flock to Tamarindo for the familiarity.

The land rush may be even more frantic in Jacó.  In that beachside town, people are buying condominiums before they are even built, said Tom Ghormley of Century 21 Jacó. 

“This is the hottest market we've had in years,” Ghormley said.  He describes a new project in Herradura Bay where two-story townhouses that start at $249,000 sold out in the first two weeks they were on the market.  There were 28 units, Ghormley said.  Another project with homes ranging between $300,000 and $700,000 was sold out before pre-construction.  Basically, condominiums in Jacó, the nearest beach town to San José, are selling as fast as they can be built, Ghormley said. 

He attributes the town's popularity to a couple of factors.  First, the town has a boulevard which is a half a block off the beach.  Second, Jacó is a real Tico town.  There are restaurants and supermarkets and a large Tico population that still lives in the town, Ghormley said.

“This is different than towns like Tamarindo where workers take the bus into town to work at their businesses then leave at the end of the day,” Ghormley said. 

Even though all the brokers felt that prices were increasing extremely rapidly, they all agreed on one thing: there's no end in sight to the land rush.

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San José, Costa Rica, Thursday, Feb. 2, 2006, Vol. 6, No. 24

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Ex-professor singled out
as pension cheater

By the A.M. Costa Rica staff

A retired University of Costa Rica professor has been singled out as the national poster boy of pension irregularities.

He is Rafael Ángel Marín Rojas, who had been getting a pension of the colon equivalent of $3,526 a month. Now the government wants the money back because officials found out he had continued to work as a microbiologist with the Caja Costarricense de Seguro Social after he retired from the university in 2002. The Caja, of course, collects the money for pensions.

Marín was not at a press conference Wednesday when his case was brought up by Fernando Trejos Ballestero, the minister of Trabajo. The ministry wants the man to return the money he has received over three years. a sum of $145,826, and officials want to tack on a 25 percent penalty.

Costa Rica law says someone getting a pension cannot work.

According to the Trejos, problems like this could not be detected before because the Caja Costarricense del Seguro Social did not have a system to verify when a person is still working and when is receiving a pension.

English-language students
will get a taste of football

By the A.M. Costa Rica staff

English teachers at the Universidad Latina will take on their students in a North American football game Superbowl Sunday.

Organizers at the university's English Speaking Center are characterizing the event as a clash of cultures.

"In reality it will be more of a teaching opportunity as the vast majority of the students have never seen a live football game much less gripped a football," said an announcement.

This is an opportunity for the Costa Rican students to experience a quintessentially North American game and learn about North American culture while at the same time practicing English, said the announcement. The students are all intrigued by the game but find it confusing and have many questions about the rules, it said.

The game starts at 3:30 p.m. Sunday at a soccer field between Universidad Latina and Lourdes Church. Later, the students will watch the Superbowl at a nearby home.

Bolivian flooding kills
at least 13 persons

By the A.M. Costa Rica wire services

LA PAZ, Bolivia — Authorities say floods have killed at least 13 persons in the Andean nation and left thousands homeless.

Some of the worst-hit areas are in eastern Santa Cruz province where heavy seasonal rainfall in recent weeks has caused widespread flooding.

Newly-inaugurated President Evo Morales has appealed for international aid. Local media report aid shipments are arriving from Venezuela and Japan while Cuba plans to send a team of doctors.

International donors have also offered aid, including the Inter-American Development Bank and the Andean Development Corporation.

Colombia described as
a nation living in fear

By the A.M. Costa Rica wire services

A senior official from the International Committee of the Red Cross who has just returned from a mission to Colombia says every person in that country has been affected by the violence that has been going on there for more than four decades.

Red Cross director of operations Pierre Kraehenbuhl paints a chilling picture of life in Colombia. He says civilians live in fear of violence, extortion, kidnappings, killings and forced displacement. He says people live with these fears every day of their lives.

The 40-year conflict in Colombia between government forces, and anti-government insurgent groups and illegal paramilitary groups — both heavily involved in the drug trade — escalated during the 1990s. Several thousand paramilitary members have laid down their arms since 2002, but other insurgents continue attacks against civilians and large swaths of Colombia's countryside are under guerrilla influence.

Kraehenbuhl says Colombia has one of the highest numbers of internally displaced persons in the world. Official statistics put that figure at 1.8 million. But the Red Cross official says other sources say it is even higher.

Kraehenbuhl says hundreds of people have been kidnapped and are held hostage for a variety of reasons. Some are political, others are held for ransom, and some of these are never heard of again.

He says an unknown number of police or members of the armed forces are being held by opposition groups, some for years. While the Red Cross has no access to them, he says that last year Red Cross workers visited more than 6,000 prisoners held by the government.
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San José, Costa Rica, Thursday, Feb. 2, 2006, Vol. 6, No. 24

Nation running on autopilot
Informal power structure takes over from lame ducks

By the A.M. Costa Rica staff

The government is on autopilot for the next three months as appointed officials figure out what they will do after May 8.

In addition, the power seems to have shifted from the political appointees to the civil service staff who will still have a job when the new national administration takes office.

Most public agencies have a parallel power structure, an informal chain of command that enforces its own policies and answers to no one. Frequently, it is the informal structure that is corrupt and sells government services out of the sight and earshot of the appointed minister and deputies.

Carlos Manuel Rodríguez, the environmental minister, said as much in an interview a week ago. When discussing a pressing issue he said ministry employees did not do what he asked them to do because they knew he was a short-timer. His Ministerio de Ambiente y Energía is supposed to protect the nation's resources.

Other agencies, such as immigration and customs, are considered more easily susceptible to corruption. Employees and ex-employees of the Dirección General de Migración y Extranjería are being investigated because fake marriages have been used to obtain residency papers for foreigners.

In many cases, a Costa Rican, usually a woman, ends up married to a man she does not know. On the strength of the marriage, the man, usually a Cuban or a Chinese citizen, earns permanent residency.

The investigation has shown some Costa Rican drug users and other street people have accepted small sums of money to be one half of the paper marriage. Such evasions of the law could not take place without the aid of immigration insiders.

The aduana or customs agency routinely wins top
 billing when Costa Ricans are asked which is the most corrupt element of the government. This is the agency that oversees the importation of millions in goods every month. Any number of tricks are used by some importers to avoid paying a fair share of import duty. Most of these schemes need at least the passive assistance of customs employees.

Such evasions can be highly lucrative considering the taxes Costa Rica levies on some imports.

A contributing factor to the current lethargy is the small chance the Partido Unidad Social Cristiana has of posting a significant win in Sunday's national elections. This is the party of President Abel Pacheco, and Unidad Social Cristiana has ruled Costa Rica since May 8, 1998.

Presidential candidate Ricardo Toledo is reaping the public unhappiness with Pacheco and his party. Public opinion polls give Toledo about 3 to 5 percent of the public vote Sunday. He may end up in sixth or seventh place.

There is no chance of the political appointees being retained, so the government power structure treats them as having left already. And little public business is being done.

An exception is with appointments. Róger Carvajal Bonilla is the new general manager of Radiográfica Costarricense S.A., the Internet provider. Carvajal is a lawyer. But he also is the husband of Vice President Lineth Saborio.

President Abel Pacheco, in response to criticism from the Unión de Camaras y Asociaciones de la Empresa Privada, said he had no role in making the appointment. He said the directors of RACSA had made the appointment.

Pacheco, himself, has joked with reporters about looking for a job after May 8 when the new president takes office. He may be seeking an academic post outside the country.

Newspaper continues its spectacular growth in 2006
By the A.M. Costa Rica staff

This daily online newspaper had another record month in January, and statistics show that both hits and pages read increased more than 320 percent over January 2004.

The increases come at a time when print-based newspapers are suffering readership declines all
over the world.

Total readers doubled in the two years from 51,351 to 119,746 in January 2006. That's a 133 percent increase.

The statistics are provided by an independent computer program at the newspaper's server.

The statistics show that readership in January exceeded both the December 2005 totals and the October 2005 totals. Both those months were records at the time.

The dramatic readership increase can be attributed to a superior English-language news report and very effective display and classified advertising.

Increases in readership of online newspapers is not unique to Costa Rica. The National Newspaper Association measured double-digit increases in a U.S. study released last year.

A.M. Costa Rica statistics also show that readers stick
Pages read
January 2006
January 2004
896,081 51,351 212,565
Percent increase

with the newspaper. The average reader views 7.5 pages in each visit, the data said.

The readership of A.M. Costa Rica is mostly an adult group, many seeking to move or retire to Costa Rica. The readership is upscale, too, because those who look at the newspaper know how to use a computer and usually own one.

Only about 25 percent of Costa Rican homes have personal computers, but perhaps as many as 70 percent of the homes occupied by English-speaking expats have computer access.

Advertiser reports also support the effectiveness of A.M. Costa Rica as a marketplace. Anecdotal reports say ads in this online newspaper outpull old time newsprint ads two and three to one. Advertisers also like the free color, movement and instant responses that online marketing provides.

Advertisers also like the prices because an old-time paper newspaper can spend up to 70 percent of the cost of an advertisement just for newsprint. Plus they can't correct errors after the ink is applied.

You need to see Costa Rican properties for sale
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A.M. Costa Rica

Fourth news page

Good grief!

Are you still spending 70 percent 
of your advertising budget on paper?

You need to fill this space ASAP!

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San José, Costa Rica, Thursday, Feb. 2, 2006, Vol. 6, No. 24

Development bank head praises Latin growth spurt
Special to A.M. Costa Rica

Latin America is experiencing its best economic growth in almost three decades, says Luis Alberto Moreno, president of the Inter-American Development Bank.

Moreno said this week that since mid-2003, the average Latin American growth rate reached 4.9 percent annually.  In 2006, he said the region's economies are anticipated to grow between 4.3 percent and 4.5 percent.  This growth, he said, will be accompanied by low inflation.  In 2005, the average regional inflation rate was 5.5 percent, Moreno said.

The development bank said Moreno presented these data in a speech at a Europe-Latin America forum in Paris. Other positive economic indicators, Moreno said, were higher levels of investment in the region and decreasing indebtedness.

The development bank added that the region's rise in employment levels and salaries has enabled 13 million
Latin Americans to climb out of poverty in the last two years.

Moreno said economic stability is a requirement for development.  All governments that come to power in Latin America, he said, will share the central challenge of increasing and sustaining economic growth, and also of improving the quality of this growth in terms of equity and employment.

In addition, the development bank leader discussed the role of migrant remittances or money transfers in Latin American economies.  Of the estimated 2005 total of $55 billion in remittances sent to Latin America and the Caribbean, over 15 percent, or close to $10 million, came from Europe.

About three-quarters of the remittances to Latin America and the Caribbean come from the United States, the development bank says.  Europe is the second-largest source, while Japan continued to be a major source of remittances to Brazil and Peru.  

Congressmen upset that tech companies help China censor Internet
By the A.M. Costa Rica wire services

American congressmen are accusing U.S. companies of providing the tools and otherwise helping China limit public access to the Internet.  The criticisms came Wednesday in a briefing sponsored by the Congressional Human Rights Caucus.

Although U.S. companies were in the spotlight, there was no one to represent them at the briefing. 

"I should note that we extended Yahoo, Google, Microsoft and Cisco Systems an invitation to join us, but they declined to appear," said Rep. Tim Ryan, who said the caucus is examining what role American technology companies play in China's efforts to censor Internet access.

"Recent news reports have shown that Chinese authorities are relying on the resources, cooperation and technology of American tech companies in carrying out the repression of free speech and free press, which is a cause of great concern for many of us here in the United States Congress," he added.

Some recent developments include Google's decision to block politically sensitive terms on its new Chinese search web site and Microsoft's move to shut down an Internet journal that discussed politically sensitive issues.  Last year Yahoo provided Beijing with e-mail account information that led authorities to arrest a Chinese journalist and sentence him to 10 years in prison.  Cisco, which makes computer routers, has been accused of providing China with the computer filtering hardware.

Rep. Tom Lantos accused the American companies of sacrificing human rights for business interests.
"These massively successful high-tech companies, which couldn't bring themselves to send their representatives to this meeting today, should be ashamed," said Lantos.  "With all their power and influence, wealth and high visibility, they neglected to commit to the kind of positive action that human rights activists in China take every day. 

"They caved in to Beijing's demands for the sake of profits, or whatever else they choose to call it."

Although the companies did not send representatives, they all sent written comments.

Google said it is trying to balance local conditions with the interests of the users and efforts to expand access to information.  The company says that is why it is disclosing to its Chinese users what information has been blocked.

In a joint statement, Microsoft and Yahoo said beyond commercial considerations, they believe they have helped bring wider access to independent sources of information in China.  They also warned that there are Chinese officials and domestic competitors who would want to see big American companies withdraw from countries like China.
Cisco said the routers it sells in China have the same features that are currently used by libraries and schools to block content authorities deem improper, and have not been altered for the Chinese market.
Meanwhile, the chairman of House International Relations subcommittee on global human rights, Chris Smith, says he expects the four companies will send representatives to a hearing on the issue later this month.

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