Surf's Up: San Juan del Sur's real estate market is catching a second wave.

(Surf's Up: San Juan del Sur's real estate market is catching a second wave.)

SAN JUAN DEL SUR – Surfers bobbing in the lineup off the beach at San Juan del Sur know that if they miss one wave, another one is sure to come along.

The rules for investment, however, are usually trickier: you either stay ahead of the wave, watch it go by, or get crushed by it.

But due to a curious confluence of factors, the real estate market in San Juan del Sur is starting to resemble its surfing conditions. Those who missed the first wave five to six years ago now have a unique chance to catch a ride on a second swell.

Since the global economic downturn first reared its ugly head, real estate prices in San Juan del Sur have fallen by as much as 40 percent, according to real estate brokers. Projects that were selling homes for $100,000 a couple of years ago have now dropped their prices to $65,000, while an $145,000 home is now going for $87,000, according to listings at the Century 21 real estate office.

One bay view condo that was asking $235,000 just sold for $100,000, according to the brokerage firm.

Land prices are even cheaper, promptin g some buyers to get off the fence and make their move. For example, one buyer just offered $180,000 for 35-hectare lot that was listed at $400,000, according to Gaspar Guadamuz, assistant general manager of Century 21.

“People have to pay debts in the United States so they have to liquidate their properties in Nicaragua,” said Guadamuz. “It's a buyers' market.”

The result is that those who missed the really sweet real-estate deals five years ago are getting a rare second chance. And this time, that second chance comes with the added advantage of already having witnessed the potential for prices to skyrocket once the market fully recovers.

“If you missed the first opportunity here, now is the time to try again,” said Chris Berry, owner of the internationally famous Piedras y Olas, Pelican Eyes Resort.

A pioneer of San Juan del Sur's tourism development, Berry not only rode the first wave, he was the first wave.

Today he says the situation in San Juan is much different than it was 10 years ago, when the government was viewed positively and the risk was whether this oceanfront strip of jungle would ever live up to its tourism potential. Now the government is the risk, but tourism development and infrastructure are already in place.

“The vision has been taken care of,” Berry said. “Now there is investment and tourists and the town has made a name for itself.”

There is also a lot more information available to buyers than there was when San Juan started to grow seven years ago.

“Buying real estate here before was more risky, because it was a new. But now there are people who have a lot more experience and clients are much more educated,” said Century 21's Guadamuz.

Zach Lunin, of Aurora Beachfront Realty, said the shifting market trend is also attracting a different type of buyer. He says fewer finance options in the United States have thinned the number of real estate speculators and short-term investors.

Lunin says his recent clients are people who have been interested in Nicaragua for years, but didn't buy before because they thought the market was overpriced.

“These are people who were looking to buy two years ago but thought the price was too high and didn't jump on it, but are going to do it now,” Lunin said.

The clients, on a whole, tend to be middle class, adventurous, liberal-minded and perhaps nearing retirement age, Lunin said. It's people looking for a home they can rent out now, and move into later.

“This is an end-buyer market,” he said.

Others, however, insist that the falling prices have also lured some new speculators, who are gambling that the prices have hit bottom and will start to rebound.

Regardless of people's motives, brokers are optimistic that the market is starting to turn the corner on the way to recovery.

“People have already seen the potential of this town,” Guadamuz says. “San Juan del Sur will grow fast or slow, but it won't stop growing.”