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Covid and Puerto Vallarta Real Estate

In the United States and in Canada, Covid has not effected real estate sales. Matter of fact some markets are showing excellent numbers. But in Puerto Vallarta and Riviera Nayarit, which is very much a tourism real estate market, if tourists can’t get to the destination, it’s hard to sell them real estate.

This year started off rather well, showing sales in January and February close to past years in 2019 and 2018, down just about 10%. And that’s not bad, considering that the two previous were excellent years. But as we went into March sales started falling off significantly. Since April sales have been down about 40%, although Realtors say that it is now improving and expect somewhat of a recover in the fall. Sales volume is off as well, was down 40% compared to the two previous years.

Market conditions are good, pricing is good, what is not is air lift, the ability to get people to Vallarta in a consistent manner. Countries, and airlines, are still working through this.

Out at the end of the bay, Punta Mita is seeing spectacular numbers, the best they’ve had in years. And it is primarily being driven by the national market, upwards of 80% of sales are to Mexicans. And this is for a few reasons.

First, just like everywhere else in the world, people are tending to stay closer to home, or at least within their own country so they don’t have to deal with open or closed borders. It’s the same for Mexico. Secondly, in the past many Mexicans have enjoyed a vacation home in the U.S., but with the country tightening its immigration laws and rules, many have begun to look elsewhere, starting within their own country. And thirdly, real estate in Punta Mita, and along the coast of Riviera Nayarit and Puerto Vallarta, is sold in U.S. dollars. And with the peso losing value, buying real estate here is safe place for Mexicans to park their money, locking it in to U.S. dollars, and not lose to a devaluing peso. This is something they can’t do in the rest of the country.

That trend will mostly like continue, and American and Canadians will be back, just as soon as the world figures out how to handle the Covid virus. Right now, like everywhere else, when is completely up in the air.

Agency Properties

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Puerto Vallarta Covid Upate

Puerto Vallarta Real Estate 101

For those outside of Puerto Vallarta and wondering what’s been going on in PV during the Covid-19 outbreak, here’s a short update.

First, Vallarta is quite empty and quiet. Traffic is estimated to be a third of what it usually is. The beaches and parks are closed, along with the Malecón – the beachfront boardwalk. Those over 60 years of age are restricted to staying inside while those below 60 can go out, but not without a mask and only for work or to pick up essential supplies. Those that disregard these rules could be arrested and held for up to 36 hours, although it is unsure if this is currently being enforced.

Many hotels have closed their doors and are not accepting people or reservations. Most condo projects are not accepting people if they are not the owners, so no-to-little Airbnb traffic. This has left many buildings quite empty. Almost all restaurants are closed and those that are open it is primarily to offer take out. 

Supermarkets are limiting the number of people allowed into the stores and only one family member at a time. Workers have masks and cash registers are behind acrylic barriers.

Real estate brokers say they are mostly working from home, and still receiving inquiries, although a lot less. Some closings have taken place at notary offices that are still open. Most offices are using their time to work on their websites and digital advertising strategies. Traffic on MLSVallarta has been cut to about 50% of what it usually sees at this time of year. 

Punta Mita has another great year

2019 was a uniquely exceptional year in Punta Mita as it celebrated its 20th anniversary, but also their highest calendar year-to-date real estate sales revenues.

Their gross closed sales volume in 2019 was just over USD$170M, showing a 49% increase over 2018 (USD $114M), and a 79% increase over 2017 (USD $95M).

Americans made up for 60% of total sales, Mexicans for 30% while Canadians made up the difference with 10%.

Punta Mita projects that if the market see “more of the same” from the world and USA economy; if the billions of USD investments recently seen continue to materialize within Riviera Nayarit; if the Four Seasons and St. Regis Resorts continue their exceptional REVPAR results, and since sales numbers show that oversupply is not an issue for them, Punta Mita should continue to be a leader in the luxury real estate development market in the Americas.

Punta Mita announced recently the release of a new community of estate homesites called Las Vistas Estates situated on the hillside behind the main sales office, which offer panoramic views Punta Mita and the surrounding ocean. To learn more about Punta Mita visit realestate.puntamita.com.

Vallarta Real Estate Fair

Puerto Vallarta most popular neighborhoods

It is that time again for the annual Vallarta Real Estate Fair, that’s been put on for a number of years now, thanks to Timothy Real Estate Group.

The Vallarta Real Estate Fair was created in response to the questions that clients and local residents had about recent changes in immigration laws, tax laws, legal and lifestyle issues that affect buyers, sellers and residents of Puerto Vallarta.

“Thinking that it would be best if our clients had the opportunity to ask questions directly to the local real estate-related service providers, we created the Vallarta Real estate Fair”, says Carl Timothy of the Timothy Real Estate Grup. “Getting correct answers to the important questions can help everyone make the best of their international living experience.”

The Vallarta Real Estate Fair has grown to include mortgage brokers, attorneys, title companies, interior designers, property managers, rental agents, and even health care professionals to help answer all of your questions about maximizing your real estate investment in Puerto Vallarta and getting the most out of the Vallarta lifestyle.

Speakers this year include Brock Squire of Coldwell Banker, Terence Reilly of Mortgages in Mexico, Paulo Rojo, speaking on architectural styles, Jessica Reidesser on Closing Costs. No matter how much you think you know about the local market, you’ll be sure to learn something new at this important event.

Admittance is FREE so don’t miss this opportunity to get valuable information about the important issues that affect you as a national or foreign resident of our city. The 2020 Vallarta Real Estate Fair will be held on Saturday, February 15th, 2020 at Rivera Molino Plaza on the corner of Aquiles Serdan and Ignacio L. Vallarta in the Romantic Zone.

For information contact us at [email protected]m

2019 Puerto Vallarta Real Estate Sales Report

Amapas Beach Real Estate

Vallarta/Nayarit Real Estate Markets Still on Fire

2018 was a record year in real estate for the Vallarta/Nayarit region, bettering 2017 by 30% in gross volume of sales. And although the market slowed down somewhat 2019, it still showed an impressive increase over 2018 by 13%, reaching US$400 million. What made up for this increase? Well, it wasn’t in the number of sales as agencies sold just as many properties this year as they did in 2018. It was because property prices increased substantially over previous years. And the difference between asking and selling price continues to tighten. It was 10.5% in 2017, 8% in 2018 and 7.5% last year.

These numbers are provided by MLSVallarta and Riviera Partners Realty who provided the numbers for the MLS system of the local real estate association, (AMPI), which together provide a reasonable assessment of the local real estate market. “Reasonable” as it doesn’t include all sales – a few of real estate developments are not members of either service and therefore their sales are not included. And it seems the farther you get away from the center of Puerto Vallarta, further up the coast of Nayarit, the less sales are reported. That said, it is commendable that certainly most sales are now reported and this is in thanks primarily to the efforts of the local real estate associations and their members (AMPI).

The market continues to be driven by American buyers (40%) although the number of national buyers has increased over they years (30%) with Canadians primarily making up the remaining 20%. A couple of reasons for the increase in national buyers is the increasing difficulty obtaining visas into the United States for Mexicans, but also because real estate in Puerto Vallarta is priced in US dollars and therefore becomes an interesting way to hedge the peso against the dollar, especially in recent years where the peso has been losing value to the US dollar.

Condominium Sales

The average condominium sales price increased in 2019 by 13%, from $282,000 in 2018 to $320,000 in 2019. The average size of a sold condominium increased slightly over 2018, from 1,415 f2 to 1,552 f2, remaining pretty much within the range it has been, on average, for more than twenty years. After the 2007 market crash, developers begin building smaller units in order to lower prices and reducing size was an easy way to do that. But they are now back up to their historical average.

For the first time in quite some time, the number of condominiums sold decreased compared to the previous year. 7% fewer condominiums were sold in 2019 than in 2018. This was made up for, however by an increase in the number of homes sold.

We went back and looked at the average sales price and size of condominiums in 2007, at the top of the market, and found that condos were selling substantially higher with an average sales price of $401,000 and an average size of 2,000 f2. But the market back then was driven by new construction and developers were building for buyers that had money to spend to get something special with extra amenities and that were larger in size. It’s probably a good sign that the current market isn’t back to those numbers.

We also took a look at what kind of condominiums were being sold, how many bedrooms they had. Historically, the two-bedroom condo has made up about half the market. It’s the same today as it was back in 2007, and the same for units with three or more bedrooms, which make up about 20% of the market. The remaining 30% was then and is today, made up of studios and one-bedroom units. But back in 2007 less than 1% of sales were studio units, compared to nearly 6% of sales in 2019. People are willing to take less to keep the price down and developers have accommodated by removing the bedroom.

Home Sales

Homes sales surged last year, increasing by more than 20% over the previous year. In 2018 the average sales price was just under $400,000 whereas in 2019 it dropped to $370,000, and for an interesting reason. The MLS systems saw an increase in the number of moderately priced townhouses coming on the market in neighborhoods not traditionally viewed as popular. One area is around the airport, which in 2007 saw no sales at all, only 4 in 2018, but over 50 in 2019. These semi-detached homes sold on average for around $100,000 and this drove down the average home sales price. If we remove these sales we find that the average home actually increased substantially in price to $425,000. These properties were primarily purchased by locals, and we are most likely going to see this trend continue as more and more local sales are reported in the MLS systems, systems that have traditionally catered more to the tourism market. 

Most Popular Regions

It is interesting to watch as certain regions become more popular over others over time. Back in 2007, again, at the top of the market, developers were busy building high-rises in the Hotel Zone, which accounted for almost 40% of all sales that year. Next in popularity came Marina Vallarta and Nuevo Vallarta whereas downtown Vallarta accounted for less than 6% of total sales. In 2018, however, the Romantic Zone alone, or the region south of the Rio Cuale to Amapas, accounted for 30% of all sales. In 2019 that dropped to 23%. The difference was mostly made up in a return to an interest in Marina Vallarta where a number of new projects are currently under development. The most popular region for 2019 was once again the Romantic Zone, followed by the Hotel Zone, Nuevo Vallarta, the South Shore and then Marina Vallarta.