A Rude Awakening for Americans in Nicaragua

It took North Carolina native Don McCandless 13 months, several work crews and some $600,000 to restore his crumbling two-story colonial home in Granada to its former stately self. McCandless spared no effort or outlay to get the details of his planned retirement home perfect, including the master-bathroom Jacuzzi, the satellite TVs, and the regal 18-seat dinning room with its ornate hand-painted ceiling and decorative tiled floors.

But before McCandless had a chance to finish hanging all the paintings, Daniel Ortega of the leftist Sandinista Front was elected president on November 5, turning McCandless' retirement plans upside down. "I'm outta here; I'm gone," said the North Carolinian. "It wasn't supposed to happen like this; it's like someone rose from the dead."

McCandless decided on election night to sell his dream home and leave the country, after the first vote returns showed Ortega poised for victory. Less than a week later, he had sold his home at a fire-sale price and left for Costa Rica.

But McCandless' isn't the only reaction among the U.S. expatriates living in Nicaragua to the unlikely reelection of Washington's old Cold War nemesis. While some are cashing out and preparing to leave before Ortega takes office January 10, others are hoping the Sandinista return to power will drive away many of the growing herd of foreign profiteers here to make a quick buck on the country's post-war real estate market.

Most investors and expatriates, however, seem to be taking a more calculating wait-and-see approach with Ortega. Lori Estrada, head of the newly formed Nicaragua Association of Investors and Developers, sent out a letter informing her members: "Mr. Ortega stated that he is fully committed to promoting foreign investment and tourism, realizing that it was the future of the country's economic growth. We believe he is serious." The association is already planning to hold a congratulatory cocktail for Ortega in December.

There are an estimated 3,000-plus Americans living in Nicaragua, though there are no reliable statistics because many are here on a tourist visa, or part time. A lot of U.S. expats came here via Costa Rica or another nearby foreign-retirement country, looking for a place where they could stay one step ahead of the real estate boom. And property prices in colonial towns such as Granada, and in beach areas like San Juan del Sur — where some 50 development projects have popped up in the last five years — have grown by as much as 300% in three years.