At the beginning of 2007, we added up how many new properties were being held by developers and this totaled 5,600 units. We asked how many of those were sold, sold in either 2006 or previous years. It was reported that 2,160 were defined as sold or no longer available for sale, leaving an ending balance of new properties on the market of 3,440. Please note that we are not sure if these properties actually sold in 2006 or took place in a previous year, that information is not available to us. All we know is that going into 2007 there were 3,440 units for sale with new developments.
During 2007, more than 50 new real estate developments came on line, adding nearly 3,800 new properties to the market. Of these about 1,700 sold, leaving us a balance, going into 2008, of approximately 7,200 new development properties. In other words, we ended 2006 with 3,440 new development units on the market, we ended 2007 with nearly twice as many, or 7,200 units. Of this, the overwhelming majority are condominiums.
If we continue to add new products to the market, but are only selling 1,700 a year, we’re going to have problems. Selling like we are it would take us nearly four years to sell out IF no new product was added. That isn’t so bad; many projects are projecting sales over a 2-3 year period.
However, there are two new, very large projects coming onto the market in 2008, (Alamar and Las Villas de Mexico), and just these two projects alone total 1,800 units, or equal to the total number of units we sold in all of 2007. So you better make that at least five years to sell out, which becomes concerning IF sales do not increase. So far it looks like we may be remaining flat, or consistent with last year, with little or no increase.
Should make for interesting discussion at the upcoming Puerto Vallarta Real Estate Conference, to take place this year in early May. We’ll be releasing the actual date in a couple of weeks, after confirming the availability of our guest speakers.