Out beyond the turquoise water, waves break on the reef. I’m standing on a white-sand beach looking at the Caribbean. Behind me, a gentle breeze rustles the thick foliage covering the hillsides. The occasional sway of the trees reveals sheltered shorefront homes just back from the sand.
It’s truly beautiful. But that’s not why I’m here.
I’m here because events of the past four years have created an opportunity. An opportunity to buy real estate for 50% less than it might have cost you here four years ago… and for as little as 10% of what you would pay on Caribbean islands to the east.
This is Roatan, the largest of the Bay Islands located just off Honduras’ Caribbean Coast. The island is small — only 37 miles long, and five miles across at its widest point. But you won’t find anywhere so brim-full of opportunity right now.
The island is a fascinating mix of people, culture, history and accents…Spanish, English, pirate, slave, indigenous and Garifuna are all rooted here.
Until the 1970′s, there were few Spanish speakers (outside of government officials). The islanders were English-speaking. Then, the fishing and shipping industries attracted Spanish-speaking migrant workers from the mainland. Still, English remains widely spoken on Roatan today. If you have trouble communicating with someone, there’s always another islander nearby whose English is strong and who is happy to help you sort things out.
Proximity to the world’s second-largest reef means Roatan is a popular spot with divers.
And it’s accessible. Weekly direct scheduled flights depart from Miami and Houston. In the winter, charters fly from a variety of cities, including Toronto, Montreal and even Milan, Italy. Alternatively you can fly via San Pedro Sula on the mainland any day of the week and catch a regular hop to the islands.
Roatan experienced major real estate and tourism development in the 1990′s and first half of the last decade. Cruise ships, resort developers, and retirees started to come in droves.
I’m back for the first time in four years. On my last trip I found a real estate bubble just waiting to burst. Back then, there were more than 30 real estate projects at varying stages of planning and early development. Most of these were being attempted by folks with no development experience. (Not even development experience in their home country…let alone an island in the Caribbean, governed by a Central American country.)
While Europeans own little hotels, dive schools and restaurants here, most of the real estate buyers come from the U.S. and to a lesser extent Canada. (For some reason, there seems to be a large concentration of folks from Colorado.) But sales—once brisk—began drying up in 2007 as the U.S. real estate market unraveled. Potential buyers felt poorer and could no longer rely on a line of credit from home.
Every market that shared Roatan’s the level of exposure to U.S. buyers suffered similar problems. But at a development level, Roatan was particularly vulnerable as there were so many projects in early stages of development there.
This horrible—almost non-existent—real estate market and weak tourism market were made worse when Honduras’ military and judiciary packed the country’s president off to Costa Rica in his pyjamas. Honduras found itself at the center of international attention. There was no real violence, but the mainstream media said that Honduras was on the verge collapse. The U.S. State Department issued travel advisories. Visitors stopped coming. Any real estate buyers who had been watching scuttled back into their shells.
But neither a poor U.S. economy nor negative press makes Roatan a less beautiful or less enchanting place. And that’s why I came back… to investigate the opportunities this crisis has created.
What I noticed first was that the realtor signs once posted everywhere—are today nowhere to be seen. None of the planned projects I visited on my last trip had materialized. Some started, then stalled…others never even got off the ground. I don’t want this to sound like some kind of Caribbean Armageddon though. It’s not. It’s paradise. The real estate industry imploding here doesn’t change that. Luckily, the projects that didn’t materialize didn’t leave a scarred coast of half-finished buildings like you find on Spain’s costas.
And the strong projects that were already well established on my last trip remain here and remain viable. They have weathered the storm—sometimes by offering deep discounts. It feels as if the clock has been turned back to before the height of the boom. Today, a small number of established projects compete with one-off sales scattered across the island. Few realtors are still active here.
But even in this crisis there has been some progress.
Last year the new cruise ship terminal opened. It can accommodate two of the largest category of cruise ships at any given time. The terminal area has an impressive selection of shops, a private beach and even a chair lift. It’s quite the thing…and under the gaze of those mountainous cruise ships.
Work on the Pete Dye golf course started close to two years ago. This is the other major project that has progressed in the past year (see: Pristinebayresort.com). Pete Dye is the world’s most celebrated golf course architect. I played the front nine with the owner of the development and met with Perry Dye, Pete’s son, who is very hands-on with this project. You expect the design and delivery quality from a Dye course. What you don’t expect is the amazing Caribbean views.
Today’s Opportunity
While visiting one of the established projects, I caught word that the owner of a resale lot that had been listed at $160,000 was reducing his asking price to $50,000. He needs the cash. I visited the lot. It’s stunning…with views to the reef and breaking surf. Neighboring lots are in the $150,000 to $180,000 range.
A few days later another of the established and high-end communities I visited offered a discount of up to 50% on completed condos. You could choose any condo but the offer ended as soon as two sold. Just $200,000 would have bought you a condo close to 1,000 square feet. It’s a long time since I’ve seen a condo like this in a Caribbean locale like Roatan for $200,000.
Of course, when considering this type of opportunity you need to be sure the developer will deliver on his promises. In these cases you don’t need to worry about that. The infrastructure and amenities are in place. The condo is complete. These were good buys.
Both were snapped up. That’s the way the market is. Buyers sit on the sidelines and pounce when the deal is right. And, the right deals are coming up.
The most enticing deals come and go fast. Frankly, the best opportunities I know of today will likely be sold by the time this is printed and mailed to you. That’s why I’m putting together a special page of current listings at Intliving.com/roatandeals. Meantime, to give you a taster here are three sample picks:
How about a three-bed, two-bath, 1,500-square-foot home in a quiet subdivision close to everything for $179,000. On a large lot (0.92 acres) with additional building sites you get great views and private road access. A private beach and marina is a two-minute stroll.
Living in Keyhole Bay is the closest thing to paradise I can imagine. There are luxury condos here in a community designed with Mediterranean-style architecture; all permanent buildings have concrete walls and redclay tile roofs. All have fully-equipped kitchens. Discounted condos start from $205,000 for just under 1,000 square feet of living space.
For $17,000 you can get a mountain-view lot in the quiet area of Brass Hill. Road, electricity and power are available in this small community.
For current listings go to Intliving.com/roatandeals or e-mail Janine@roatan-realestate.com.
*****************************************************
Stay Ahead of the Path of Progress
Ronan McMahon is the Executive Director of Pathfinder (International Living’s preferred real estate advertising partner), which focuses on opportunity for gains in strategic pockets around the world—before most folks have even heard of them. He writes for Pathfinder’s real estate investment service, the Real Estate Trend Alert.
