The situation in the Caribbean continues to worsen, with Puerto Rico estimating that some places on the island could be without electricity for 4-6 months. And that is just one aspect of the problems Puerto Ricans are having to deal with. And it is not limited to Puerto Rico, The British and U.S. Virgin Islands, St. Martin, Dominica, Guadalupe, Turks & Caicos, and other islands - all were severely affected by hurricanes Irma and Maria. And the hurricane season isn’t over yet.
There is a shortage of food, water, medical supplies, fuel and housing. And there will most certainly be a tremendous loss in tourism revenues this upcoming season because so many hotels were so badly destroyed. It is absolutely devastating and will tremendously costly getting these places “livable” again.
What won't change is that people will still want to vacation somewhere warm this winter, and there will still be people looking for a secondary home somewhere in the sun. The odds are, however, that it won't be in the Caribbean, which will only make things worse for this region, unfortunately. It will recover, but for the short-term, places like Puerto Vallarta and Riviera Nayarit will certainly benefit.
A good number of the homes that were damaged or destroyed were secondary homes, owned primarily by from the U.S. and Canada. They lived there part- or full-time, and many rented out their properties. Now they've lost the use of their homes and will need to invest heavily to get them back to what they once were. Hopefully most have insurance, but even if they do, what are premiums going to be for the next year?
And what is going to happen to the value of their real estate? These homeowners will recover, get their homes back in good shape, but how quickly will the value of their real estate recover? Won't people, who could be interested in real estate in these regions, be hesitating just a little, when two hurricanes in one season plowed through the Caribbean with devastating consequences? Do they really want to buy somewhere where this could happen again? Perhaps the odds are slim, but it is people’s perception that is their reality, and right now things don’t look good for real estate in the Caribbean.
Just being on an island itself has shown how difficult things can be, such as just getting back to the U.S. or Canada. And then there is access to supplies needed, as it all comes from elsewhere, by either boat or plane.
Puerto Vallarta, and others places in Mexico, will benefit from this disaster. It is terrible to say that someone benefits over another’s troubles, and it is the reality of the situation.
If anything ever were to happen to Puerto Vallarta, there a number of ways supplies can reach the destination, and numerous ways people can return home. It is not an isolated island. Already local real estate companies are seeing an uptick in rental demands because people have had to cancel in the Caribbean. Next will likely be an increase in real estate prospective buyers, as they discover the benefits on owning real estate in Puerto Vallarta.
by John Youden - October 11, 2022