Over at Yo-Yo in Paradise, Tica Teri has a great photo on her blog this morning. A beautiful flat green space with a lone bull. Apparently next to a pig farm. These days, big green spaces, even ones next to smelly pig farms, are good for one thing and one thing only: CONDOS!!!!! We'll think of something else to feed the bulls.

Little Miss Killjoy couldn't keep her mouth shut. Here's her comment:

"Building, building, building. Keep those condos building. Feed the fire, keep building – fren-zeeee!" Sung to the tune of "Rawhide".

This building frenzy is a game of musical chairs. One we played in Key West and around the states to disastrous results, only now being realized. The music in Costa Rica has already slowed, but the blood pounding in developers' and speculators' ears makes it impossible to hear any sound at all except "cha-ching."

This version of musical chairs is a little different. When the music stops, there will be far more chairs then players. There already are, but current players think the other, newer, flush, expectant players will be along any minute. They won't ever materialize – not in the droves the current players need.

And the giddy excitement will be gone. Replaced by bewilderment.

Tragically, in Key West, almost every single blade of grass that could be replaced by a building has been. Those "units" (you can hardly call them homes) remain unsold and uninhabited, adding insult to injury.

Losing every blade of grass to a building won't happen everywhere in Costa Rica, but along the coast and here in Escazu, it will seem like it. They are building a new house (spec) across the street from me now. And there are at least 15 half-completed towering developments around Escazu that I drive past everyday.

Who will live in these condos? Tourism was down 25%-50% last year. Visits to the forums are down to less than half what they were same time period.* A couple of weeks ago, a visitor wrote that his move to Costa Rica was delayed for at least 2-3 years until the real estate market in south Florida bounces back and he can sell his house.

He's not alone. I know two families in Key West in the same boat. They own property here, built homes, but can't move here yet. I have very good friends in London who wanted to move to Key West, but the London market has been failing for about 3 years now. Their house was listed for over $1,000,000 which was cheap at the peak of their market. It's now down to almost half that. Not alone by a long shot.

To me, the writing is on the wall. I can step back and see it clearly now from my perspective. Which is, fortunately, uninvested. But there are so few people who see it like we do. Are we wr-wr-wr-incorrect? There are more properties on the market worldwide than there have ever been at any time in history. And there isn't a buying frenzy anywhere. There are properties moving, yes. But not at the pace required to move the massive inventory.

In Key West, based on the current pace of sales, there is an 11 year inventory. In a normal market, there is six months worth. A slow market would be a year, maybe a year and a half. But eleven years? If you knew that, would you be BUILDING a bunch of condos to sell??? Or buying anything to flip?

Not me. And I'm as greedy as the next person. I like money, I like stuff, I'm a consumer… but even I, whose eyes glaze over at the talk of cap rates and internal rate of return, finally understand that a house is a biodegradable place to live. It's not a stable investment for making fortunes. Historically, you can count on your home price staying ahead of inflation as long as maintenance is kept up.

True, for the last 3-5 years, there was a frenzy and, like the dot com days, people got rich. In Key West, home prices rose a staggering 30% to 40% a year. There are people in the world who thought that would continue forever. And who clearly think that horse will ride again.

But how can it? As the game escalates, as prices get more and more extravagant, buyers without the wallet and/or stomach for the game drop by the wayside. Till only the very rich, the only ones able to ante up, are left at the table. And they aren't interested. Did they get rich overpaying for real estate? Hardly.

The only real estate it makes sense to buy now is a home you can afford that you will love and enjoy. If we found that here, we would buy, without hesitation. We look forward to it! Real estate will be fun again. Soon as that damn song stops playing in my head.

Signed Little Miss Real Estate Killjoy

*You have to have a yahoo id to read these forum messages, but if you are interested in life in Costa Rica, it's worth the time to create one so you can visit the forums, see what people are saying. It's free, takes a minute. If you don't want to, the forum posts just say the same thing I wrote here. Pura vida!