Roatan is a largely English-speaking island with turquoise waters and warm weather
The market was clearly headed straight up in 2003 when we went to Roatan, Honduras, on an International Living tour. We knew that if we wanted our beachfront cottage on this beautiful Western Caribbean island—home to part of the world’s second-largest coral reef—we would need to decide quickly.
When we finally retired here in 2007, we found that everything IL had told us was true. The value of our own place had almost doubled. Roatan, once known only to a few as a low-priced diving resort, had finally been “discovered” and real estate prices followed.
All that halted in 2009. Buyers’ investments were being hammered at home. Second mortgages on U.S. homes, one source of cash for foreign purchases, were harder to get due to the credit crunch. Rising unemployment meant lower consumer confidence.
But Roatan was weathering that pretty well. After all, Baby Boomers like us were starting to retire, and a largely English-speaking island with turquoise waters and warm weather, about two hours south of the U.S., was not a hard sell…a place where your retirement income could buy fun, not just survival.
While North Americans living in Honduras were universally proud of their adopted country, there was no reward to be found in the real estate market. Tourism and real estate sales on the island all but stopped.
Now, with the political situation resolved and the recession declared officially over, demand is reasserting itself, starting with the less-expensive properties. Buyers with cash are demanding good deals. Lower prices should remain for a while…but the best deals are going first.
The underlying forces driving prices upward in Roatan did not retreat last year. The tourism industry is in full acceleration. Near the beginning of 2009, Royal Caribbean Cruises built new facilities in a government partnership, which this year will be extended to accommodate two cruise ships at a time.
In February 2010, the $62-million Mahogany Bay Cruise Center, constructed by Carnival Cruise Lines, opened for business. This facility also accommodates two 4,500-passenger ships simultaneously. Together, these docks promise to bring over two million cruise ship tourists to the island every year, in addition to all those who come in by planes and ferry.
Some current bargains:
* A beachfront lot for $30,000
* A lot with a 180-degree sea view in a development with paved roads for $110,000
Some of the sellers are willing to wait for the market to recover, but others need cash now. One example is a house that listed for $990,000 selling for $400,000.
Another house that listed in 2009 at $319,000 sold in 2010 for $245,000. A house that was originally listed in 2009 for $349,000 sold for $258,000 this year.
You can get a reduction from the listing prices of 15% to 30%.
We give full details of these properties in our full article in the July issue of International Living magazine. You can try IL magazine for $17…and get instant access to our Roatan article.
