A Puerto Vallarta Real Estate Agent's Opinion of the 2013 Real Estate Market
I had intended to write this article 2 months ago assuming we would be at the end of high season and the start of low season and I would have the time on my hands to reflect on paper the amazing year we had. We are still going strong. This year there never seems to be an end to High Season.
I remember the days, pre recession, and an inflated seller’s market when we would switch from High to Low Season literally within a weeks time. Those were the days when prices were high and 75% of the buyers were American.
Fall 2008 the switch from a super strong seller’s market to an instant buyers market was literally overnight with Canadians making up 75% of the buyers market.
We went from an average condo sale of $850,000 USD pre-recession to an average condo sale of $300,000 USD during the recession.
This is not to say that $850,000 condos were now selling for $300,000. No, not at all! We definitely had a price adjustment, but unlike the USA and on the big scheme of things worldwide our prices stayed steady.
To me, I found this an exciting time as a real estate agent. This was the time when an agent had the opportunity to get their clients real. Gone are the days when the agent who pitched the highest list price got the listing.
These last few years have not been a time for a seller to test the market. If a seller needs to sell then they had better price their property accordingly.
What better way to do this than through our new Flex MLS System which was just being introduced to our market in 2009.
With the correct and current input of information regarding sales we are finally able to furnish our clients with up to date and accurate statistics regarding our Puerto Vallarta real estate market.
Now reputable agents are able to prove to their seller the price range they need to list at in order to shorten market time in selling their home.
For sure we had a number of sellers who bought high and were in a position of having to sell and understandably the first thing to go is the vacation home. But those sellers were few and far between.
Oh I remember the Fall of 2008 well. After one or two tours with buyers I quickly caught on to where their heads were at.
Now we had to get the buyers real. No you can not buy that $250,000 condo for $60,000 just because your friend bought a similar condo in Florida 2 months ago… No you cannot buy then or now a gorgeous condo on the beach for $100,000 in Puerto Vallarta.
What most people did not realize is that 95% of all foreign buyers in Mexico buy with cash. ON AVERAGE, most sellers haven’t leveraged themselves to the hilt so they are not desperate to sell. Their carrying costs are considerably low compared to the USA. If they can’t sell they can rent and wait.
My “Buyer Education Day” became more important than ever before. This is the day I drive my clients around showing them places that fit their criteria and what they can expect to pay based on the recent sales we have had in any given area, what area rents best, and why, and why this similar condo in a different neighborhood sells for more, etc.
After many years of a buyers market most properties are priced so well there is little to no wiggle room on price. The educated buyer quickly sees this.
The influx of Canadian buyers was so strong over these last few years that developers tapped into what the Canadian buyer wants and needs and started building condos with the same great features and amenities with 1,500 sq. ft. of living space instead of 3,000,sq. ft. Priced in the $200,000 to $400,000 range instead of the $500,000 to $700,000 range.
It has been a busy and lucrative five years thanks to the Canadians, but it seems to me this is all about to change again.
2013 has proven to be the turning point, the beaming light at the end of the tunnel leading us out of this recession we have all been in to different degrees.
For me the turning point started with my first sale of this last High Season Fall 2012. I was touring buyers looking in the price range of $500,000 to $700,000. That in itself was an big indicator of change. It has been so long since I had a buyer shopping in this price range I took it as a sign.
I searched the MLS and found only five listed properties in the area we were looking in. We toured all five, of course, my knowing full well none of these properties would fit the bill for these buyers.
I was stumped, but only for a moment. I pulled up all the expired listings from year previous and asked if these sellers were still willing to sell. Well now I had something to work with. I narrowed this list down to seven properties and when we found the perfect place that fit these buyers’ criteria we proceeded with an offer.
The property was listed at $549.000 USD. When asking what they wanted to offer their reply without hesitation was “What do you mean?” They are asking $549,000 so that is what we will offer.
I am not a praying man, but it was all I could do to not drop to my knees and holler Hallelujah! THE AMERICANS are back!
This trend continued throughout this 2013 High Season.
The phone has been ringing with requests for showings on higher end listings I have not had a call on in years.
The average price condo sale last quarter of 2011 was $318,000. Average price condo sale last quarter 2012 was $424,000. I believe the average price condo sale for the last quarter of this year will be over $500,000.
All this to say…. if you dream of owning a vacation home or investment property here in beautiful Puerto Vallarta, we have lots of beautiful properties, whatever your budget!
Don’t wait! The time will never be just right!
Timothy Real Estate Group – An innovative company setting new standards in Real Estate sales and services has the most professional and experienced Realtors in the Puerto Vallarta area who understand the intricacies of Mexican Real Estate ownership, the local market, Puerto Vallarta property codes and regulations and financing. The Timothy Group uses that knowledge to provide a sound analysis on every aspect of property ownership. Timothy Real Estate Group is known for professionalism and experience and they bring this to every transaction they work on for the benefit of Real Estate investors and developers alike.
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