House Hunting in El Salvador: A Compound on the Coast for $249,000
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Version 0 of 1. This low-slung villa compound is tucked into a lushly landscaped tropical garden, steps from a private beach and beach club on the Pacific Coast of El Salvador. The property, on a third of an acre in the Bahia Dorada beach community, has two residences — one with two bedrooms and one bathroom, and the other with the main bedroom suite. The home, being sold furnished, is arranged in a traditional Salvadoran ranch layout, with the living areas split between indoor and outdoor spaces, said the seller, Anna Rooney. Whimsical touches include brightly colored walls and handcrafted textiles. The dining room, living room and kitchen are outdoors, while the bedrooms and several sitting areas are indoors. The property also has quarters for a housekeeper. “The green areas are indescribable,” said Jose Cortez, an agent with Oceanside El Salvador, which has the listing. “It feels like you’re in a forest.” From the street, a long walkway leads to the center of the property, past a 26-foot swimming pool and adjoining gazebo with a hammock and barbecue. The walkway continues to the heart of the property, passing by a covered, open-air kitchen and living room. A bathroom, closet and housekeeper’s dwelling are attached to this patio. The kitchen has a central island with a granite countertop and a propane four-burner stove. Past the kitchen, the walkway splits to reach two buildings: On the left is a cottage with a bedroom suite and a sitting room. On the right is the two-bedroom, one-bath cottage, currently used for guests. Each has a covered veranda with tile floors, raised by a few steps. The residence, built about 40 years ago, has approximately 1,650 covered square feet, not counting the patios and terraces, and it has been continuously updated, Ms. Rooney said. The roof was replaced this summer. The private Bahia Dorada community offers an exclusive beach and pool within walking distance, as well as 24/7 security. The area is a surfing mecca, with the El Mizata and El Zonte surf breaks 10 and 20 minutes away. San Salvador, El Salvador’s capital and largest city, is about an hour and half away, as is Monseñor Óscar Arnulfo Romero International Airport. After years of depressed home prices owing to a weak economy, gang violence and political instability, El Salvador’s real estate market was on the upswing in 2020 before pandemic lockdowns and travel restrictions throttled growth. But local brokers and other market observers noted that the Central American nation of some 6.5 million residents has been steadily recovering — and in its beach regions, more than recovering. Aaron Varquero, the founder and CEO of Oceanside El Salvador, which specializes in beach properties, said Salvadorans realized fairly early amid the pandemic that they could own a beach home for the price of a traditionally less expensive urban dwelling. “In general, it’s always going to be better to live on the beach than to live in the city,” Mr. Varquero said. That desire, combined with the option to work remotely, pushed many Salvadorans to the country’s coast — especially to the La Libertad region, 45 minutes from the capital. “As soon as the economy reopened, the demand of beach homes went to the sky,” he said. “People started selling their apartments and investing in beach houses.” He added: “There used to be just one or two homes a month. Now we’re closing five to six homes a month.” Prices in beach areas have rebounded accordingly, Mr. Varquero said, climbing 15 to 20 percent over their early-2020 levels. A traditional three-bedroom house that would have cost $150,000 18 months ago might cost $180,000 today. “We’re almost back to where we were before the pandemic,” said Mauricio Ramirez, an agent with San Salvador-based RE/MAX Central, noting that the market “started to see the nice jumps” in demand during the spring. He said his agency is now seeing more foreign buyers than before the pandemic. Some are Salvadoran immigrants returning home, while others have no ties to El Salvador and are looking to retire there. Of the first group, he said, “El Salvador depends a lot on hermanos lejanos — foreign brothers — people on the outside of El Salvador. People from the U.S., Australia, Spain. So they related the news back to family members on the outside, who are like, ‘Well, we want to purchase too.’ It was kind of that snowball effect, in terms of families.” According to the Latin American classifieds portal Encuentra 24, the median price in San Salvador reached $113 a square foot in June — a 28 percent increase from March 2020, when the median hit a low of $88 a square foot. Encuentra 24 currently shows about 9,000 listings available in San Salvador, the country’s largest market. Mr. Ramirez said prices in El Salvador are lower than in neighboring Guatemala and higher than in Honduras. For the same price, a home in Honduras might be “bigger, better,” while a comparable home in Guatemala might cost around 25 percent more, he estimated. Beyond the familiar pandemic-driven reasons for an increase in demand — namely buyers looking to relocate and find more space — Mr. Varquero said several government initiatives have helped El Salvador’s beachfront real estate market. One has been a push to solidify the country’s reputation as a global surfing hub by landing the International Surfing Association’s 2021 World Surfing Games, among other surfing competitions. Another has been investment in infrastructure, security, water and access to electricity. “This new government is doing great things,” he said. “And this program, the Surf City program, it’s opened the eyes for many investors all around the world to invest in El Salvador.” There is also, however, deep skepticism about the populist motivations of the country’s new president, Nayib Bukele, who has accused media outlets of conspiring against him and used the military to pressure legislators, prompting U.S. Vice President Kamala Harris to express her “deep concerns about El Salvador’s democracy.” For the moment, prices overall remain below their prepandemic levels, creating opportunities for buyers, said Gary Barquero Arce, the president of SCRiesgo, a Central American risk-rating agency that tracks El Salvador’s economy and housing market. That, paired with the economy’s anticipated growth and infrastructure improvements, makes it a good place to invest, he said. “My point of view is there is a great opportunity right now to buy houses in El Salvador, especially because the prices are down because of the pandemic and also because right now in the political sense they are stable. I think it’s a good opportunity for investors, especially because El Salvador is a small country, but it is a country with great opportunities.” Mr. Ramirez said that in the past six months, 60 percent of his agency’s buyers were domestic, down from about 75 percent before the pandemic. Mr. Varquero said buyers of beach properties in El Salvador over the past two years have been evenly split between local and international. About a third of the foreigners came from the United States, with the rest coming from Germany, France and Holland, among other countries. Buyers from most countries, including the United States, can purchase real estate without restriction in El Salvador. Foreigners, however, may not own more than 605 acres, and only foreigners whose countries grant equal rights to Salvadorans can acquire real estate, said Oscar Torres, a partner with Garcia & Bodan, a law firm with offices throughout Central America. Transactions are handled by notaries, who charge a percentage of the purchase price — usually between 0.5 and 1 percent. Other closing costs paid by the buyer typically include a real estate transfer tax (for properties valued at more than $28,571.43), and a registration fee. For a property of $250,000, these taxes total around $8,000. El Salvador operates on the U.S. dollar, though Mr. Bukele recently championed a legislative effort to make Bitcoin legal tender in the country. “I have a huge list of buyers who are very excited to use Bitcoin as a method of payment for real estate transactions,” Mr. Varquero said. El Salvador tourism: elsalvador.travel El Salvador Surf City portal: elsalvador.travel/travel-category El Salvador Covid-19 dashboard: covid19.gob.sv Spanish; U.S. dollar, bitcoin (1 bitcoin = $32,479) The owner pays a $115 monthly fee covering maintenance of common areas, access to the club’s pool, security, and the prorated annual property tax, Mr. Cortez said. Jose Cortez, Oceanside El Salvador, 011-503-7945-9464; oceansideelsalvador.com For weekly email updates on residential real estate news, sign up here. Follow us on Twitter: @nytrealestate. |