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Central America

Overview of a Fascinating Region for Second Home Buyers

By Tom Kelly

While Europe has always been a popular destination for U.S. consumers to purchase second homes (were you part of the group ready to jump on a plane after reading Under the Tuscan Sun?), the dollar has been weak against the euro for several years and air travel tends to be more costly and lengthy to European destinations.

Couple that with the number of first-generation Latino residents in the U.S. who have a particular interest in staying connected to their homeland, and you have an entirely new category of people considering buying a second home in Central America.

The wildcard in the boomer deck is adventure - it is part of their hardwiring. Not only is this the largest, healthiest and wealthiest group ever to come down the U.S. pipeline, but boomers also seek the thrill of the exotic and are very willing to borrow to obtain that experience.

Central America is an absolute paradox. It may be all that you imagine, but surprisingly, it is much more than one could ever embrace. It is more than the long and winding territory that connects North and South America.

To the typical North American, the area conjures up vivid and varied images. On the geographical side, a mountainous area with volcanoes, colonial cities, jungles, and, of course, bananas and coffee.

On the political front, turmoil, dictatorships and instability. On the economic front, rich versus poor, agriculture-based economies, and sweatshops where United States garments are manufactured and exported.

It is a complex and fascinating place, home to 41 million people with a total gross domestic product of about $88 billion.

How do you begin to categorize such a dramatic and extraordinary? For starters, this region geographically encompasses seven countries: Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama.

These countries have many mysterious cities and fascinating destinations that you could only hope to place them on the map in your mind. Where, exactly, are those exotic places on the flight boards at the Miami, Los Angeles and Houston airports?

Cities such as Tegucigalpa (Honduras), Liberia (Costa Rica), Belmopan (Belize) and Colon (Panama) . Once you learn where to place the countries on a map, then you'll realize the geographic diversity that these countries present.

Striking and picturesque volcanoes line El Salvador, Guatemala, and Costa Rica. Coastlines range from remarkable and mountainous (Costa Rica), to black volcanic (El Salvador and Guatemala) to low-lying Caribbean. Culturally, Central America is extremely diverse.

Guatemala has a strong history of native American Mayan cultures where much of the population is mixed or mestizo. Some countries such as Costa Rica have over 90 percent European ancestry with nearly no mestizo influence.

The slave migration from Africa to the Americas resulted in English-speaking areas of African ancestry along the eastern coasts called garifunas. Panama is a true melting pot, with Asian, European, and Latin American cultures meeting at a true crossroads of the world.

The economies also differ. Nearly every country has its own currency (El Salvador and Panama utilize the dollar) and rely on agricultural exports such as coffee, bananas and other natural resources.

Others have heavy manufacturing maquiladora bases (El Salvador and Honduras) and other countries are discovering tourism as a major source of income (Panama and Costa Rica).

Some countries have a stable middle class (Costa Rica and Panama) while others have dramatic differences between rich and poor (nearly every other country in the region).

Once you can recognize differences between countries (if you can tell the difference between each country's flags, currencies, and can point to the location on a map, it's a good start!), then you need to sift through these markets and make a decision. Where would you buy a second home . . . and why?

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Tom Kelly, former real estate editor of The Seattle Times, is a columnist and talk-show host specializing in the second-home market. Copies of his latest books - "Cashing In on a Second Home in Mexico" and "Cashing In on a Second Home in Central America," written with Mitch Creekmore, senior vice president of Houston-based Stewart International, are available on his website,

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