PUERTO VALLARTA REAL ESTATE MARKET UPDATE

We have seen a strong increase in sales in the Puerto Vallarta real estate market in the past several months.  The malaise of last year’s “swine flu” debacle is now just a bad memory as the market returns to a state of normalcy.  One well respected and experienced Puerto Vallarta real estate agent has reported twice as many sales already this year than he had all of last year combined.

It is still readily apparent that buyers have the upper hand in negotiations; however, many sellers have undertaken major price reductions or other incentives and have been successful in selling their properties.  But buyer beware:  another top agent reports, “I have already had two multiple offer situations this year, where a buyer hesitated in his offer and was beat out by another buyer.  Both buyers are still waiting on the sidelines and talking about the ´deal that got away´.”  One strong driving force in the market is the appearance of the Canadian buyer. With the Canadian dollar at even par with the US dollar, and many prices here reduced 20-25%, these savvy investors are reaping the rewards and appearing in record levels.  Another long time Broker here reports that Canadians are now making up almost half of his buyers here in the real estate market of Puerto Vallarta, up from approximately 10% just two years ago.  Another new paradigm of this market is that the “flippers are dead”. Today’s buyer is taking a much longer term approach to investing in Puerto Vallarta Real estate and is doing more research, asking more questions and is more patient than in previous years.  Besides the obvious factor of price, this buyer is keenly aware of cost of ownership, quality of construction and the location and amenities of the property.  Many of these new buyers are taking advantage of readily available mortgage financing on their property here in PV.  One very busy Mexico mortgage broker reports:  “interest rates for US Dollar mortgage loans (available to both Canadians and US citizens) are at historic lows.  We can go as low as 6% on interest rates, and typical rates for 30 year loans with 25% down are from 6.75 to 8.25  Obviously NOW is a good time to buy before rates start to head back up.”  So where are we headed?  One of our most experienced and knowledgeable brokers summarizes:  “I think our biggest challenge going forward will be to provide the market with quality and credible information that will allow both sellers and buyers with the tools in order to make informed decisions. I think that this has in large part been the reason why our actual sales activity has been lagging so much over the past 6 to 12 months. Sellers don’t understand what the value of their property is today and buyers keep seeing prices drop and are reluctant to step up until they see a sustainable base of value. Only after we have a sufficient number of transactions to support these new price levels will we be able to see the transparency in this market which will lead to the return to a more normal level of activity. How long will this process take? I think we are now starting to see the beginnings of this base being formed now and so over the next 6 to 9 months I think we will be back on track – a new track to be sure, but with a much higher level of sales velocity.”  So there you have it, the Puerto Vallarta Real Estate report for winter 2010:  Much better than 2009, but still a ways off the record levels of 2006-2007 and some challenges ahead for the remainder of the year.  We’ll check in again this fall to see how accurate we were.

Do you have a question about the Puerto Vallarta Real Estate market? Just ask!
Michael Green moved to Puerto Vallarta to take advantage of the unsurpassed lifestyle PV offers. Today, with over 12 years of experience, Mr. Green is one of the most recognized brokers in Vallarta. TOP Mexico Real Estate “Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”