Positive Economic Data Exposes Buying Opportunities Media Drives Swine Flu Pandemic by Brock Squire – Coldwell Banker Preview
As international stock markets recovered from their March lows, real estate buyers seemed to take heed and after months of very little sales activity, the buyers started to come out of their caves and started looking at properties. Depending on the market and location in the Banderas / Riviera region, buying opportunities have been variable. Depending on sellers’ circumstances there have been reports of what could only be termed phenomenal opportunities from a historical perspective. As these ‘lookers’ have been turning into ‘buyers’, we have continued to see a pick-up in seasonal activity. Often, in the more normal markets in the past years, buyers look in the ‘high’ season and buy in the ‘low’ season. I expect that what we are now seeing is quite a bit of that – further enhanced by the perception that the economy may be nearing its low point and poised for a bit of an upswing. After seeing more properties go under contract over the past 30 days than we have likely seen for the past 6 months we are hopeful that we are clearly in a recovery phase where we will still see a clearing out of distressed properties at relatively opportunistic prices which we fully expect to last through to the end of the year.
At the same time, these difficult times are often when we see some of the more creative deals and opportunities that wouldn’t necessarily be needed in more buoyant economic climates. We are currently working on a limited offering of ownership interests via a legally constituted holding company allowing owners to enjoy full ownership rights to a branded flagship property in Punta Mita unlike any prior offering of its kind seen to date. This particular opportunity allows the owner a proportionate amount of co-ownership and use of a property that would be normally valued somewhere in the $4M ranges for less than $500K. This is not a standard ‘fractional’ offer but one that has been enhanced through innovation and opportunity.
We are also seeing the beginnings of a couple of new and major master-planned community resorts which are bringing the green approach to what might be considered a more low-key family activity environment which we feel that our customer is now looking for – without the huge overhead commitments that often come with these master-planned communities.
I would be remiss if I did not address the Swine Flu Panic – I mean Pandemic – that has somehow encompassed our beautiful country. Actually, somehow probably isn’t the correct word, nor is encompass – but of course that entirely depends on where you get your information from on a 24 hour basis! The reality is that there have been no reported cases of swine flu within 1,100 miles of the Bay of Banderas/Puerto Vallarta area. The symptoms of the cases that have been reported are apparently quite mild and of those that have succumbed to the virus in Mexico CITY we do not know anything about their prior physical condition. Compared to the death rates of other flu virus strains, it boggles the mind to understand the media hype that has been given to this situation. The appalling result is difficult to predict in economic terms, however with hotel occupancy rates hovering around 10% recently, layoffs occurring daily in the hospitality industry and airlift being curtailed drastically, the result is certainly not going to be positive. While we see this as a temporary situation economically and a non-event medically, it will have some effect on our real estate markets. Some buyers might even call it the perfect storm!