Market Summary
The Tamarindo and greater Guanacaste real estate markets are currently experiencing a shift after the post-COVID boom. Here are the key insights for September 2025:
- Post-COVID Run-Up Is Over: The 400% surge seen during 2020–2022 ended in 2023, and prices have stabilized with a downward trend in the aggregate.
- Median Price Points: Home prices now range from $500K to $1.5M, reflecting stabilized values after the extraordinary post-pandemic growth. Ultra high-end remains strong depending on the neighborhood. Single-family homes in the $500K to $700K range within 10 minutes’ driving distance to the beach have been front stage.
- Closed Sales: Sales are generally tending to stay below $2 million, depending on the neighborhood. Many luxury homes are stagnant unless located in small boutique developments close to or on the ocean.
- Buyer Activity: There has been a slight uptick in the last 30 days of buyers across the board, both in the multimillion-dollar segment and mid-end properties, signaling renewed interest and market movement.
- Buyer’s Market in Full Swing: Increased inventory and more selective buyers give purchasers significant leverage, while sellers must price strategically and highlight property quality. Oversupply of select gated communities compared to years past.
- Oversupply of 2-Bedroom Condos: This segment is experiencing longer marketing times and heightened competition among sellers, again depending on address. 3- bedroom multi residential is prized.
- Rental Market Decline: Real rental returns are down approximately 30% due to oversupply, impacting short-term rental profitability.
- Average Rental Returns Reality: Most properties historically achieve 4–5% on a good day; owners must actively manage and upgrade units to realize better returns.
- Development Risk: Some projects are underwater, having started too late, recalling stark lessons from the 2007 market downturn.
- Investor Caution: Skepticism is advised for sales pitches promising two-digit rental returns; realistic yields are much lower unless actively managed.
- Infrastructure Constraints: Water remains scarce, with AYA limiting new hookups, which constrains new development and property expansion potential. Building lots with existing water meters are highly desirable.
- Pricing Trend: Prices are declining across the board; sellers need to adjust expectations to attract buyers.
- Federal Rate Impact: The recent quarter-point rate cut by the Federal Reserve may provide some support to the market, improving buyer confidence and affordability.
- Market Outlook & Opportunity: This is a cyclical market. While prices are currently down, the market will rebound at some point in the future. Shrewd negotiations with a reputable buyer’s agent like Sol Realty can uncover jewel properties with strong long-term equity appreciation. Let us guide you to success.
Conclusion
For buyers, this is a unique opportunity to acquire properties at realistic prices, with the potential for long-term equity gains. Sellers should adjust expectations and focus on property quality and marketable features. Sol Realty is ready to guide clients through these dynamic market conditions and help them make informed, strategic decisions.
