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Puerto Rico has had a long and varied history. Located to the east of Cuba almost midway between Florida and Venezuela, the main economic factor for Puerto Rico is its location as a transportation hub. In recent years, with the rise of Caribbean vacation cruises, Puerto Rico has seen further economic boost and development. The political environment of Puerto Rico is unique in that is a commonwealth of the United States, giving the territory a degree of freedom that closely resembles that of a State of the union. The best way to understand the development and progression of real estate values on the island is to approach the topic from an economic development point of view. In the early twentieth century the island's economy was entirely devoted to agriculture and the export of sugar cane to the United States. This kept property prices low even in San Juan, the largest city on the island. People lived and worked in the cane fields or at the port docks of San Juan and there was no other business development. In the 1940's a major push was initiated by the U.S. government to transition Puerto Rico's economy to a manufacturing center. Manufacturing quickly replaced agriculture as the mainstay of the island's economy however these efforts were hampered by the large migration of people off the island and toward the U.S. mainland. They were eager to participate in the economic boom of the nation following World War II. Due to this large population drain, the property values on the island remained very low as the supply of land far exceeded the demand of property buyers. After the change of government in Cuba in the 1960's, Puerto Rico finally found a positive niche that continues to drive developments on the island. Tourism became a powerful economic force throughout the 1970's and 1980's. San Juan soon saw developments of huge hotel casinos along the natural beach. El Moro, the old Spanish fort guarding the harbor, became a landmark icon and cruise ships began to take advantage of the island's central Caribbean location to establish their sailing port. So property prices began to rise significantly in San Juan and the surrounding areas. However these value increases were largely localized to this area, as the island's infrastructure did not extend very far inland. This leads us to the present situation; the government of Puerto Rico has embarked on a multi-million dollar infrastructure improvement plan that was implemented throughout the 1990's and early 2000's. New highways, roads, and subways all lead outward from the economic hub of the island, San Juan, and extend inward to the inland of the island. In each direction suburbs are now being developed and property values are increasing as the population is able to secure ease of transportation. The outlook for Puerto Rico real estate is well on track. Its position as a central Caribbean hub assures its role as an important trade and tourism center linking the United States with South America and the Caribbean Islands. As a result real estate values in and around San Juan have an excellent future.
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