The March report for sales for Multi-List Vallarta, a marketing and MLS service for the Puerto Vallarta and Riviera Nayarit region, showed a substantial increase over what the average usually is. 22 sales were reported for MLV (re-sales only, MLV does not include new sales for real estate developments), which is double what is usually reported. Nine of these sales originated from Tropicasa Realty, which had an exceptional month.
Is a trend emerging here? I contacted Wayne Franklin, the owner/agent of Tropicasa Realty, to ask him. I always enjoy a conversation with Franklin about real estate in the region, as he has seems to be able to get his head up and above the day-to-day operations and give a good, objective perspective to what he sees is going on. As well, he comes with years of real estate experience in both markets, the USA and here in Vallarta. It may be that Tropicasa is a little ahead of the curve on sales, as not everybody is currently experiencing the same level of activity.
- “We input our sales data into the system, which not all agencies are doing. So the data could be somewhat skewed. (My note: This has been an ongoing problem for years; to get agencies to report their sales. There is really no other way of obtaining the information if they don’t report them. This is now increasingly more difficult as there are now two MLS systems with not all real estate agencies belonging to both MLS systems. Hopefully, though, this will get worked out in the future, so go statistical information will be available.)
- Some clients are just sick and tired of being sick and tired. In other words, they’re full of the drivel that’s in the media and they just want to get back to making life decisions for themselves. (My note: I agree with Franklin, people are getting tired of the sensationalism, especially when they come down here and find out the situation is not all like its being portrayed in the media.)
- Some clients are tired of the US government and the decisions being made and are looking at exiting the madness, temporarily or permanently.
- Other clients are simply retiring earlier than expected, thinking that it doesn’t look like things will improve in 5 years when they would normally be retiring, so they’re just making the decision to do it now.
- I have seen in the past year the buying public being more investor-minded people, as well as at the other end of the spectrum, the high net worth clientele coming into the market. Typically seen as the “smart money”, these people I think are seeing an outstanding and unique opportunity that has not existed in this market, and are taking advantage of it. Typically, when the investors start coming back into a market, that’s the beginning of the return.
- Also, keep in mind that there is only a small portion of the market as a whole in Vallarta that was severely affected by all of this. The remainder stayed at relatively retail levels and wouldn’t move from there. Clearly, those properties haven’t yet sold. BUT what will end up happening is that when the distress properties or financially challenged owners have been able to sell, then all that will be left is the retail inventory. It will then begin selling as there will be no alternatives for the investor market. I certainly see that taking place in the next 18-24 months, if not sooner. (My Note: My concern with this is that a “Shadow Market” has been created, of people who have not listed their homes because they can’t get the price they want, but still want to sell. What does this consist of? Is it significant?)
- As to volume, just as an aside, including a couple deals that I’m currently negotiating, in Q1 of 2011, we sold the same volume that we did in 2010 … FOR THE YEAR! It IS a whole new ballgame this year. There IS hope!
Excellent news from one real estate agency in the region. In the next couple of months I’ll be talking with other agents to get their perspective for our regular Real Estate Trends article that is featured in the Summer/Fall issue of Vallarta Lifestyles, as will be available here as well.
With regards to the sales that did take place in March, the average sales price is still down with the condominiums averaging less than $300,000 and interestingly, homes still lower with an average of less than $250,000. The highest priced sale was $685,000; the lowest was $58,000 – there really is something in this market for everyone’s budget!