How is the Real Estate Market in Costa Rica this October?

Highlights:

• The U.S. Market: Inventory Rises, But Opportunity Knocks
• Spotlight on Costa Rica: A Magnet for Global Mobility
• Papagayo Spotlight: Premium Paradise Holding Strong
• Why It Matters, and What's Next?

October 2025 Real Estate Market Update: A Shift Toward Balance Amid Easing Rates

As we wrap up October 2025, the real estate landscape continues to evolve in fascinating ways. What started the year as a cautious market, gripped by high interest rates and economic uncertainty, is showing signs of thaw. Inventory is climbing, sales are picking up steam, and buyer sentiment is cautiously optimistic. Whether you're a homeowner eyeing an upgrade, a first-time buyer dipping your toes in, or an investor scouting opportunities abroad, this month's update has insights tailored for you. Drawing from national trends and our focus on international hotspots like Costa Rica, let's break it down.

 The U.S. Market: Inventory Rises, But Opportunity Knocks

The U.S. housing market is breathing a sigh of relief after a prolonged squeeze. National active listings have surged notably compared to last year, signaling a welcome increase in options for buyers. This uptick; around 21% from 2024 levels; has tipped the scales in many former seller's markets toward balanced or even buyer-friendly territory. That said, we're still playing catch-up; overall inventory hovers about 11% below pre-pandemic peaks from 2019, keeping things from feeling truly abundant just yet.

Days on market tell a similar story of moderation. Nationally, homes are lingering about 17% longer than they did a year ago, giving buyers more time to negotiate without the frenzy of bidding wars. Hot spots like Dallas and Miami have seen even steeper increases up over 25% in some cases; while cooler markets like Seattle and San Francisco are moving faster. This shift is echoed in months of supply, which climbed sharply in places like Miami (by more than 35%), eroding that sense of urgency that once defined second-home buying.

Affordability remains the elephant in the room, with mortgage rates hovering above 6% (currently around 6.34%) locking in a "rate lock" effect where homeowners hesitate to sell and buyers pause. Add in inflation worries, tariff talks, and broader economic slowdown fears, and it's no wonder qualified shoppers are hitting the brakes, waiting for more clarity. The result? Record-high cancellation rates, with pending sales falling through at levels not seen since 2017. In July alone, over 15% of agreements were scrapped, highlighting a supply-demand mismatch where listings outpace buyers by hundreds of thousands.

Yet, glimmers of hope are emerging. August brought a sales rebound: new home sales jumped double digits, existing homes saw a healthy lift, and total transactions rose across the board, possibly fueled by strategic price adjustments even before rates began their gentle dip. Pending home sales followed suit, climbing more than anticipated and pointing to a busier fall. Consumer psychology is shifting too; a "wait and see" mindset is giving way to renewed interest, especially as headlines amplify less doom and more potential upside.

Fun fact: Despite the headlines, Americans still crown real estate as the top long-term investment for 2025, edging out stocks and gold in polls. And demographics are shifting, younger buyers, particularly first-time luxury seekers in the 26-34 age bracket, are financing purchases at higher rates than ever, bringing fresh energy to the market.

 Spotlight on Costa Rica: A Magnet for Global Mobility

If the U.S. feels like a waiting game, Costa Rica is emerging as the go-to escape hatch for savvy expats and investors. Search volume for "Costa Rica real estate" has spiked by double digits year-over-year, reflecting a broader wave of global migration. The country tops Latin America's list for attracting high-net-worth individuals, with projections for a substantial influx of millionaire newcomers this year; potentially injecting billions in investable assets. Reports show U.S. citizens now comprising a record share of global residency seekers, and expat moves abroad have doubled in recent quarters.

Residency applications here have exploded, with one leading firm noting a sixfold jump for U.S. nationals, vaulting Costa Rica into the top tier of programs. It's no surprise: stable governance, natural beauty, and tax perks are drawing families and retirees alike.

Locally, active listings are on the rise across key areas, from beachfront gems like Tamarindo and Manuel Antonio to upscale enclaves in the Central Valley and Papagayo. We've seen inventory growth averaging in the 30-50% range in popular spots, creating more choices without flooding the market. Average listing prices hold steady or tick up in premium zones like Hacienda Pinilla and Santa Teresa, while per-square-meter values underscore value in coastal havens like Dominical and Uvita.

 Papagayo Spotlight: Premium Paradise Holding Strong

Nestled in Guanacaste's stunning northwest coast, Papagayo remains a crown jewel for luxury seekers, blending pristine beaches, world-class golf, and eco-luxury resorts. As home to our 2CRRE Papagayo office, we're witnessing firsthand how this gated enclave defies broader softening trends with resilient demand from international buyers.

Active listings here have grown by about 37% year-over-year, offering more selective options; from oceanfront condos to sprawling villas; without diluting exclusivity. Average prices sit comfortably in the seven figures, up nearly 10% from last year, reflecting sustained appeal for high-end properties. Per-square-meter pricing hovers around $2,782, making it a smart value play compared to pricier neighbors like Hacienda Pinilla & Tamarindo.

What sets Papagayo apart? Proximity to Liberia International Airport (just 30 minutes away), Four Seasons and Waldorf Astoria, and protected national parks fuel a lifestyle of adventure and serenity. With expat inflows accelerating, we're seeing quicker closes on premium inventory, especially for turnkey homes with views. If you're eyeing a foothold in this blue-zone haven, now's the time; before the next wave locks in even tighter.

At 2CRRE, our team's boots-on-the-ground perspective aligns with these trends. We've tracked a meaningful upswing in total transactions and sales volume this year, outpacing last year's figures by a solid margin. Average sales prices have stabilized into a sustainable groove after some early volatility, and gross commission income reflects the broader momentum; pointing to a healthier pace overall. High-end deals, like those at Marina Pez Vela, show resilience too, with near-complete sell-outs underscoring demand for luxury lifestyle properties.

 Why It Matters, and What's Next?

This month's data paints a market in transition: more supply easing pressure in the U.S., while destinations like Costa Rica shine as diversification plays. The emotional drag from uncertainty is lifting, replaced by pragmatic moves from price-conscious buyers and motivated sellers. If rates continue their modest decline and economic clarity arrives, we could see the thaw accelerate into 2026.

Ready to make your move? Whether navigating U.S. opportunities or exploring Pura Vida abroad, our team at 2Costa Rica RE Papagayo is here to guide you with tailored insights. No hype, just results. Drop us a line for a no-obligation chat, or subscribe for monthly updates straight to your inbox. What's your take on the market? Optimistic, or still on the sidelines?

*Sources: Realtor.com, Redfin, NAR, Gallup, Henley & Partners, Business Insider, and internal 2CRRE analytics.*