Inefficiencies and Opportunities-Nosara Real Estate Market
- April 12, 2019
The Nosara real estate market has unique characteristics that you won’t find in your home country. My prior career was was spent working with public investment markets and analyzing price movements and volatility. Typically, the less efficient the market the higher the volatility and return expectations. For example, if you compare a standard S&P 500 fund to an Emerging Market fund you will find more inefficiencies in the emerging market where available information may not not reflect current prices while the top 500 stocks in the world all available information is reflected in the price of the stocks which makes it an efficient market. Typically, the less efficient the market the more you pay to transact and the more return opportunities there are seen as a measure of volatility.
In most major real estate markets there is more information that is reflected in current pricing and you have the MLS (Multiple Listing Service) and other statistics to measure and analyze to determine an efficient price. Nosara does not have a listing service that provides recent sales data and other statistics that can help people make pricing and buying decisions. The lack of available statistical information and MLS service creates more opportunities to invest in mis-priced or under valued assets. Many clients who come to Nosara are confused by the listing methodology employed here. Typically, you will find exclusive listings, open listings, and pocket listings (non-public). There are pros and cons for each, but the most important thing to do is to find an agent who has credible experience and wants to help you find what you are looking for. This person should put the clients interests above their own and provide transparency about all aspects of the transaction or opportunity. When you find an agent you can trust and has experience to match, they can point you to the best mis-priced opportunities in town. Although the geographic layout if Guiones/Nosara is small relative to other markets, the comps or price comparisons vary widely given just a few hundred meters difference in locations.A good and experienced agent will know what has sold and how to comp properties well. When you find this person and you are interested in learning more about inefficiencies and opportunities, ask them what types of properties have been on the market the longest. This is one way to screen out the best value and is another difference between this market and other major markets where days on market might be a negative. Often times in Nosara it is a positive and where you can find asymmetric risk profiles and deep value.
Writing by Matt Grenfell. Remax First Choice Nosara.