The housing slump has sent many Americans shopping south of the border.
Existing-home prices in the United States dropped 4.5 percent in the third quarter from a year ago, according to S&P/Case-Shiller. But they are climbing in much of Latin America and the Caribbean.
Buyers are being enticed by the kind of double-digit appreciation that has all but disappeared in the States.
In addition, a growing number of new developments are targeting Americans looking for good deals and a lower cost of living.
Since 2003, annual home-price appreciation has been running at 20 percent in the Dominican Republic, and could reach 50 percent in the near future, according to Boomerang Unlimited, a Napa, Calif., real-estate investment advisory firm.
In San Pedro, Belize, the average price of a 2,200-square-foot home was $697,500 in September, up 18.6 percent from a year ago, according to a study by Coldwell Banker; the price of a similar property in San Jose, Costa Rica, was up 20.7 percent, to $389,900, the study said.
Prices remain low compared with those in the United States, particularly for waterfront properties. Because Americans generally buy and sell properties throughout the region in dollars, not the local currency, home prices don't fluctuate with the various exchange rates, as is the case in Europe. What's more, the dollar generally buys much more house in these countries than it does in the United States, because labor and land are less expensive.
Still, the rapid appreciation is drawing growing numbers of bargain hunters, making good deals scarcer and causing some customers to look beyond the usual vacation hot spots. In the Dominican Republic, Century 21 broker Dean Brown says 80 percent of his buyers this year have been Americans, compared with half last year. Softec, a real-estate consulting firm, says in the past three years, investments in vacation homes in Mexico, primarily by buyers from the United States and Canada, have shot up by 60 percent.
Americans' appetite for investment opportunities is helping to spur a building boom in some areas. In Panama, 170 residential-building projects are under way, mostly marketed to Americans, and 100 more are in the pipeline, according to Panama Legal, a law firm in Panama City. Among them, a 1,500-acre resort and marina by Naples developer Todd Gates.
The project, on Isla del Rey, one of the Pearl Islands near Panama City, is slated to open in 2009 and will have condos, villas and single-family homes ranging from $275,000 to $1.4-million.
“It's like Florida was in the '50s," Gates says.