Puerto Vallarta Real Estate | June 2009
|The State of Real Estate in Puerto Vallarta - Summer 2009|
Marla Hoover - PVNN
It is official. The "wait and see" attitude has changed to "get 'er done." While last winter we all faced the slide of the US stock and world markets and their jittery aftermath, then held our breath while we waited to see what was going to be its effects on the Puerto Vallarta real estate market, we are now seeing the resuscitation of that market. However, this is not without many lessons being learned. It is a new paradigm out there as many can attest to.
|Savvy Puerto Vallarta real estate watchers have started to return, or are at the very least emailing and calling, to see what is happing with the property they had their eye on last winter.|
Past history has shown that prices here do not drop as they do in the US when their market faces a down turn. This is because besides PV being largely a second home market, most of the properties were purchased with "cash" and so do not have mortgages on them, thus there is not the urgency to sell as other markets have seen.
Yet that does not mean that we have escaped unscathed. We have all been witness to a slow seasonal market that had more showings than sales. That coupled with the knowledge that the "cash" that many previous buyers used was actually some type of debt or equity capital whose resources have now dried up like the Pitillal River in high season. Buyers have to actually have the cash or to find different types of leverage backed financing.
Many of these buyers are now turning to cross border Mexico financing which, while being a bit more expensive than yesterday's second mortgage or home equity loans, is actually no more expensive than what these markets would be today - especially considering the lower cost of living and retiring in Mexico.
There are reports that say that some baby boomers who did not save will be forced to work longer and move to less expensive retirement areas than expected. Due to the ridiculous cost of health care, property taxes and general costs of living in the US, many current and future retirees will be forced to consider moving to other countries if they plan on living at the same level of comfort they enjoyed while working.
Because of the proximity to the US and Canada, solid medical community and lifestyle options, Puerto Vallarta will continue to be a very good option for this population.
G3Mex Group Broker Miguel Fernandez reiterates this sentiment, "I feel that things are settling and that we will be getting a rush of buyers in the next six months, given that many of the buyers that where holding off buying have mentioned that they are coming to buy. The opportunities in the re-sale market are the safest and best bet and some new construction projects can be enticing but need to be advanced and have no risk of default. There are definitely advantages to buying now; great value, great cash discounts and, in some cases, owner or developer financing."
This past season has also brought with it a great many creative offers which have included the more traditional owner financing, trades, lease to purchase and still other types of contracts written from the lunatic fringe.
This spring and summer has brought with it a calm and sensibility for offers to purchase. We are not seeing as many subterranean low offers. Buyers have gotten the picture and realize that there are discounts as Sr. Fernandez said, however, nothing is being given away.
According to Vallarta Multi List, the light of the end of the tunnel is now shining. In the six month period from December 8, 2008 to May 11, 2009 most of the sales closed have been in the last three months. Over half the condos were closed after March 3, three quarter of the single family dwelling (house) closings occurred after March 17, half of the lots closed in April and the only two commercial sales were complete in March and May. (Of these closings 74% were under 500K with 50% from 121 to 300K and 24% from 301 to 500K.)
Carmen Vargas, G3Mex Group sales agents states, "Most of my sales this year have been within the past two months and I expect to have a much busier summer sales season than I did this past winter."
This trend is expected to continue through the summer and into the next high season. Just about everyone agrees that prices are now at rock bottom and the only way is up. This will create a demand before high season, so savvy PV real estate watchers have started to return, or are at the very least emailing and calling, to see what is happing with the property they had their eye on last winter but decided to wait and see. In the next few weeks, if they have not made their move they will most likely be paying the cost of not "getting 'er done!"
Puerto Vallarta real estate - relocation specialist Marla Hoover is a member of the US National Association of Realtors (NAR) and AMPI, the Mexican Association of Real Estate Professionals. You can contact her by email at marla(at)g3mex.com, or by calling 011 (52) 322-209-0832 from Mexico, or +1 (206) 274-9962 from the US
Click HERE for more articles by Marla Hoover.