Looking forward into 2008

I am not alone, I’m sure, among real estate agencies, brokers and developers, in sharing concern as to what 2008 may offer us with regards to real estate sales. The signs so far point to a softening market, and a transition from a seller’s to a buyer’s market. The inventory for the MLS service continues to grow, up to 820 listings now in the database, and that’s double what we had this time last year. Talk on the street is that sales are somewhat down or keeping stable with last year. The problem with that is, is that there is more product on the market compared to this time last year. So if sales at real estate offices managed to at least equal last year, that would not be sufficient to satisfy sellers and developers, because of our increased inventory.Although the real estate market in the USA still continues to drag, for some strong second-home markets, that certainly isn’t the case, such as in Aspen and Vail:

Five Colorado mountain resort counties will set a combined record of $8.56 billion in real estate sales this year even with a recent cool-down in the market. The total was reached by the end of October in Garfield County and the counties that are home to the Aspen, Vail, Breckenridge and Steamboat ski resorts, according to a report compiled by Land Title Guarantee Co. Last year, the combined sales in the same area totaled $7.41 billion through October 2006. The highest average price was in Pitkin County at $4.52 million.      

Notice that $4.52 million average price for Pitkin County (Aspen)? And the same for Palm Springs:

“DataQuick Information Systems The median price declined 7.9% in October to $350,000. DataQuick’s analysis [of] county records data showed 564 desert properties being sold in October, or a 43% drop from last year. All valley areas saw fewer homes sold with the exception of the 92264 ZIP code area of Palm Springs…  

Hopefully the fact that we also are a strong second-home market, with the ready availability of financing now available and that our market has not been hurt by defaulting sub-prime or ALT mortgages, that we can maintain the sales of last year, or perhaps even improve it. Much of that will have to do with how real estate is priced, as pricing is very important in a buyer’s market.

New York Times Article on Florida RE Market

Very interesting article in the New York Times about the real estate market in certain parts of Florida. It ain’t looking good. Look what a Mr. Jarrett is going through:

Three years later, Mr. Jarrett left his mental health-counseling job and began selling real estate. He bought progressively nicer homes, keeping the older ones to rent, while borrowing against the rising value of one to finance the next. Mr. Jarrett acquired a taste for $100 dinners. He bought a powerboat and a yellow Corvette convertible. (In a photograph on his business card, Mr. Jarrett sits behind the wheel, the top down, offering a friendly wave.) Last summer, he paid $730,000 for a 2,500-square-foot home in Cape Coral with a pool and picture windows looking out on a canal. But Mr. Jarrett hasn’t closed a deal in three months. He is on track to earn about $50,000 for the year, he said. Yet he needs $17,000 a month just to pay the mortgages, insurance, taxes and utility bills on his four properties — all worth less than half what he owes. Rental income brings in only about $3,500 a month. Mr. Jarrett has not paid the mortgage on two of his properties in six months and is behind on the others as well, he says. His goal is to sell everything, move into a rental and start over. He is supplementing his income by selling MonaVie, a nutritional juice that retails for $45 a bottle. He recently dropped health insurance for his family, saving about $680 a month. He is applying for a state-subsidized health plan that would cover his 9-year-old daughter. “I’m in survival mode,” he says. 

Speed of MLS Service Online

The online MLS service at www.mlsvallarta.com has never been very fast, and recently its been even slower. One of our developers has been working on it and this involved downloading large portions, hence slowing it down for everyone. We’ve asked him to stop that for now. The database program we use is not the best for online use. We have to go through a 3rd party program, which means each request we make of the database has to go a rather roundabout way, slowing down the process. We are working on eliminating the “middle program” by translating the entire database to another database format (MySQL), which is built for this type of usage. This will dramatically speed up the database. We are beginning on this project in January and we’ll keep you posted on our progress.

Vallarta Lifestyles Digital Version II

As of today, 1,700 people have signed up for the digital version of Vallarta Lifestyles. Last week it was 600. That’s 1,700 people that went and signed up because the want to receive regular information about Vallarta. And hopefully that’s just the beginning. We are currently in discussions with the advertising agency for the PV Tourism Board to send out an invitation for a subscription to everyone on their list, which is tens of thousands of people. If you haven’t checked it out, you can at www.vallartalifestyles.com.  And even better, tell everyone about it!

Will Mortgage Financing Availability help us out?

Mortgage financing has had a difficult time finding roots in Vallarta. Its now been about five years since it was first introduced and to date, mortgage financing is playing a small role in overall sales in our local real estate market. Over that period of time though, the mortgage lenders and brokers have had the time to get the process working better. At first they were plagued by long time delays, as they tried to put all the paperwork necessary together as quickly as possible. Owners, who had offers on their homes subject to financing thought their homes were sold, only to face long delays waiting for the financing to be approved. The Realtor ended up dealing with their impatience. 

Forbes article about Punta Mita

 Mexican Land Grab Interesting article about Punta Mita recently posted on Forbes.com.  

Punta Mita Update

DINE, developer/owner of Punta Mita, a 1,500-acre, master-planned, luxury second-homecommunity on Mexico’s Pacific Coast, has sold its last remaining hotel development parcel to Strategic Hotels & Resorts, Inc., a real estate investment trust and owner and asset manager of 21 high-end hotels and resorts in North America and Europe. The Chicago-based REIT purchased some 57 acres of prime oceanfront land to make room for an as-yet-unnamed mixed-use, residential resort development. The company plans to enter into a joint venture on part or all of the land before its development takes place. ”With this acquisition, Punta Mita is now completely sold out for new large-scale development opportunities,” says Andres Rossetto, Managing Director of Resort Development for Punta Mita and DINE. Strategic is the owner of the existing Four Seasons Resort Punta Mita, as well as the La Solana resort development parcel. In addition to these hotel development sites, the St. Regis Resort Punta Mita is under construction and scheduled to open in mid-2008.

The last big parcel has been sold at Punta Mita, and to a company that now owns three of the four hotel sites within the development. It will be interesting to see what name brand hotel they bring in to join the other hotels, the Four Seasons and St. Regis. It still hasn’t been announced who will be the management company for La Solana (which they sure haven’t been working on very much since they purchased it). There has been talk of “W” coming in for this new land acquisition.

Fractional going to make it this time?

We have all seen fractional real estate project start up and then end up converting the units they have into full-time as they just haven’t been able to sell that well. Remember Playa del Sol? They started off primarily as fractional and ended up going the timeshare route.

But lately there have been a number of projects coming on line offering fractional. Villa La Estancia has been doing for some time now, with reasonable success. The Four Seasons has fractional out at Punta Mita and from what I hear that is going well. Now there is La Tranquila starting up in Litibú. Burt Hixson is going to do six homes on the beach below his home in lower Conchas Chinas and they will be fractionalized. Tropicasa has a new project coming online and there is Taheima in Nuevo Vallarta as well. And I’m sure I’m missing others.Perhaps now is the time for fractional in Vallarta. It certainly has been successful elsewhere in other tourist resort destinations. At the next Real Estate Conference we plan to focus on fractional: how it works and how to sell it.

Getting to Know VREG.com

Our site www.vallartarealestateguide.com is packed with excellent information that really every realtor should visit regularly to ensure they are up-to-date and fully aware of what’s available on the real estate market in Puerto Vallarta and the surrounding regions.

On the “Development” Tab you’ll find information on many of the real estate developments around the bay, more than you’ll find in any one place on the Internet. Its easy to use and browse, and quickly become familiar with where each project is, what it has to offer and what its price points are.

Under the Tab “Vallarta” you’ll find the primary regions listed with a photo and description of each. If you look to the right-hand side column, you’ll see that the developments that are listed in the region are listed. They are also live links, taking you to the information page of this development.

Under the Tab “MLS Search” you’ll find three unique ways that you can search the two MLS databases. One is our standard format that allows you to enter in search criteria and search for properties. Another is using a large map of the bay to go around and find out about regions, developments and properties for sale. There are also aerial, ground and 360º images to view to get to know what the area looks like. This is a great tool for showing people around the bay when making presentations.

And we also include many of the real estate articles that have been printed in the Real Estate Guide or Vallarta Lifestyles as well.

There’s more information on local real estate than you will find anywhere else.

You know something’s going on when…

Realtors start calling you, or asking you out for breakfast or lunch to talk about the state of the market. They usually, or haven’t been doing that, for years. They have just been too busy writing up contracts and listings to have anywhere near the time to ask how the market was. And they didn’t need to ask, it was so hot that they could barely keep up with it. They were working until past midnight many nights. You rarely saw them out unless it was for the opening of a real estate development or for a home openhouse. They didn’t have time to socialize. And they didn’t have time for a breakfast or lunch to “chitchat”.Well, they seem to have a little bit more time for that lately.