The reigning expectations for the economic situation during 2019 have also been transferred to the real estate market. To learn about them, Vallarta Real Estate Guide approached various real estate brokers in our destination to ask their opinions on how the Vallarta · Nayarit real estate industry will behave during the coming year. Their responses, in addition to being encouraging, provide various aspects that must be taken into account to keep it strong, healthy and stable.
A Review and the Transition to 2019
Brock Squire, CEO of Coldwell Banker La Costa Realty, began by comparing 2018 to 2017. “With respect to houses, 255 were sold in 2018, compared to 205 in 2017, while the average sale price was $396,789 USD in 2018, versus $360,582 USD in 2017. Regarding condominiums, we had 819 sales reported in 2018, versus 727 in 2017, and the average price was $281,726 USD in 2018, versus $270,666 USD in 2017. Last year was very good in all respects, and it could have been incredible if it had not slowed down in November and December due to general concern about the US mid-term elections, as well as the uncontrolled fluctuations and eventual losses that took place in the global stock markets. While caution seems to be the order of the day, we believe that because of the strong employment levels and overall strength projected for the world economy there is a basis for optimism, especially when it comes to our area.”
In addition to the above, Carl Timothy, president of Timothy Real Estate Group, offered a series of interesting statistics, among other things. “I see that the Vallarta · Nayarit real estate market will continue to be very healthy in 2019. According to data from the local chapter of AMPI, US citizens accounted for approximately 45 percent of buyers in 2018. In other demographic data, we observed that the largest group of buyers ranges between 55 and 64 years of age, and the second between 45 and 54. Another interesting fact is that approximately 73 percent of the clients of AMPI agents are buying without financing, while 10 percent use Mexican financing options for their purchases. With more Mexican investors putting their dollars to work in our market especially oriented to the US dollar, there is more opportunity in real estate for those dollars to grow than by leaving them in the bank with little or no interest. This has been a stimulus for national investors who have entered the market in search of good opportunities. With the continued demand from our foreign neighbors, I see that the Banderas Bay real estate market will continue its growth pattern in 2019.”
Wayne Franklin, president of Tropicasa Realty, says that looking at 2018 is a good guide to what we can expect for 2019. “Last year was, without a doubt, one of the—if not the—best year in the Puerto Vallarta real estate industry, due to the remarkable volume of sales in the bay. While it is true that there are global concerns about the actions of many international players, the feeling I have from buyers at the end of 2018 and the beginning of 2019 is that this year will remain very strong. For the last three years, I have been predicting that when we approached or had less than 12 months of property inventory, we would find ourselves in a seller’s market. We are very close to that turning point. The truth is that significant construction is taking place across the bay and inventory is being consumed at a record pace. In January 2018 we had 17 months of inventory on the market, and in December we had 13. Clearly, it does not mean that all the inventory will be consumed in 13 months, but having an inventory rate of about a year, we are already seeing great interest in certain types of properties, multiple offers and even complete deals. This is a good omen for a strong 2019, as long as the international heads of state remain firm in their respective policies.”
Terence Reilly, CEO of MEXLend, says, “2019 will follow 2018 as a year of solid sales in real estate, but we may see a bit of postponement, as people are a bit leery about what is happening in the stock market and the political environment of the United States. However, this could be offset by interesting situations. The first is that the United States is seeing a record number of people leaving the country to find a higher standard of living for their retirement, and there is no better country than Mexico for that. The second is that there are new loans and mortgages in dollars, so that US citizens can more easily buy their residence in Mexico.”
Claudio Leone, president and CEO of Domus Fine Real Estate, underscores that 2019 will be a year of great opportunities, challenges and responsibilities: “Great opportunities because we see a vibrant market that has been growing in recent years in a healthy and consistent manner, because we have new developments and a large inventory of resale properties within a destination established worldwide. Great challenges because we have factors such as the World Bank’s reduction of the economic growth forecast for our country to 2 percent, and there is also pressure for an increase in interest rates, as well as a foreign exchange market where moments of volatility are expected. And great responsibilities because we must be better participants in our real estate environment, train ourselves, improve our systems and procedures so that we provide an ever better quality professional service to our clients and buyers.”
For his part, Carlos Lemus, sales director of Lemmus Inver-Mexico Real Estate in Banderas Bay, believes that 2019 can be an excellent year if it continues with what has been happening in recent years, based on several factors:
Banderas Bay and Riviera Nayarit are some of the safest destinations in our country, with a very low rate of common and/or organized crime.
· Geographic Location
The location of our destination is privileged, in relation to the north coast and our own country, making us in recent years a very easy destination for nationals and foreigners in northern Mexico. And it’s gaining ground even from the east coast, which usually or used to travel more to Cancun, beginning to change the trend due to the climate of security and accessibility.
Banderas Bay has seen impressive real estate growth since 2006, establishing itself as an excellent place to invest because, even with a period of financial uncertainty in the United States for 2008/9, the market remained active, without losing value, during the difficult times, only to return with much more strength.
Thanks to the new platforms, condominium units on the beach offer an excellent annual return that can even exceed 8 percent.
· Capital Gains
Even though foreign markets seem similar to that in their places of residence, the national market is extraordinary, as property values go hand in hand with the foreign market and, therefore, the dollar, which, due to flotation and parity with the peso, provides an opportunity for gains of 10 in these investments.
The fact that there are million-dollar investments in this area of Riviera Nayarit only serves to reiterate and strengthen the value of the investment, giving greater certainty to investors, who take the arrival of these large investments as a sign of stability.
· Communicating Roads
In addition to the four-lane highway being built by the federal government, Nayarit’s state government plans to expand Highway 200 to four lanes, from Las Varas to Punta de Mita.
Regardless of economic, political and commercial factors at the international level, our experts agree that the Vallarta · Nayarit real estate industry offers an excellent panorama for 2019 and suggest that it will remain strong, healthy and stable.