Honduras

Honduras' housing market continues to show signs of improvement since last year, after dramatic house price falls in 2009. House prices started picking up at the beginning of 2010 with developments and infrastructure investments announced by both public and private sector.

The real estate activity is concentrated in the Bay Islands, a group of islands in the Caribbean Sea off the north coast of mainland Honduras. With its location, the islands are relatively safe and secure.  The three mains islands are Roatan, Utila and Guanaja

According to Marci Wiersma, broker and owner of About Roatan Real Estate, house prices were about 40% off their peak or even higher, by the end of 2010. Most buyers looked for properties ranging from $200,000 to $250,000 that could already get them a beachfront condo o a three-bedroom house on a hill.

The cause of the house price decline?  Honduras’ traumatic 2009 coup that ousted its former leftist president, Manuel Zelaya.  Honduras has a long history of military, civil and political conflict, massive corruption and government inefficiency, inequality, and poverty. Volcanic activity, earthquakes and hurricanes have devastated the country.

The main cause of Zelaya's ouster was his attempt to rewrite the 1982 constitution to remove term limits. The Honduran military, acting on the orders of the Supreme Court, conducted the coup to preempt a referendum.

And as the global financial crisis struck in 2009, Honduras also suffered an economic contraction by 2.1%, resulting from a reduction in export demand to the US, and tighter credit markets.

"It was a disastrous year for anyone wanting to sell," said Janine Goben, the owner of Re/Max Bay Islands.

The political situation has been somewhat stabilized and the economy has rebounded with 2.77% GDP growth.

But the attempts of newly-elected Porfirio Lobo Sosa, of the right-wing National Party, to reconcile the nation have run into deteriorating human rights situation.

Militarization has reached alarming levels, with the police and military trying to keep their traditional grip on drug and extortion profits, by murdering prominent critics.

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