The Buyers’ Market in a Changing Vallarta

Before moving permanently to Puerto Vallarta in 2009, Luke Kost had been a frequent long-term visitor for 12 years. Originally from Portland, Oregon, he remembers that his first impressions of the port were that the people were very friendly and warm, that there was a lot to do and that it had a special charm. “I just enjoyed every aspect,” he says.

Although much has changed in Puerto Vallarta since he first arrived in 1997, he believes that it still has the same great people and there is much more diversity.

In the United States, Kost (a graduate in Business Management from the University of Phoenix) was a real estate agent at Oregon Realty, a real estate investor and a mortgage loan originator in Oregon and Washington states. During one of his trips to Puerto Vallarta, he met Harriet Murray, director of Cochran Real Estate and current president of AMPI Puerto Vallarta, and became involved in the local real estate industry. These factors were key to his decision to move here and start working in Mexico’s real estate sector.

Currently, his career in Banderas Bay includes experience as a sellers and buyers agent, rental operator and owner. He specializes in helping sellers get the highest possible price as well as finding the best opportunities for buyers looking for vacation homes and income-producing properties.

A few weeks ago, we approached Kost to get his impressions about the current industry scene in the city. He categorically stated that it is still a buyers’ market.

“Sales are definitely increasing since last year, and sellers are taking lower prices than they were initially considering. The US economy is excellent and its real estate industry booming, which has led American buyers to show interest in acquiring properties abroad. As far as Mexican market prices, we are just starting to ramp up. If customers want to get a good deal, they should not take long to invest. It’s a good time.”

Luke Kost.

In a report on market behavior in the first quarter of 2017, Cochran Real Estate notes that home and condominium sales increased 20 percent, and the average sales price decreased 14 percent compared to the same period last year. Areas such as the Hotel Zone, Marina Vallarta and Nuevo Vallarta seem to be back in the game for condominium units (which continue to dominate the sector), with sales volume increases of more than 100 percent.

On the other hand, Kost points out that greater interest is being seen in high-value residences, houses of more than a million dollars distributed from Punta de Mita to Mismaloya, which have been in the market for many years and had not seen any movement.

In view of this accelerated pace and the large number of developments under construction in Puerto Vallarta, Kost notes that certain issues concerning both real estate professionals and clients, local government agencies and members of the community must be addressed.

One of foreign buyers’ most frequent uncertainties of is the buying process. Investing in real estate in Mexico is different than investing in the United States and Canada in many ways. It being one of life’s most important transactions, buyers must make sure they work with a trusted real estate professional, preferably one who is knowledgeable about the Mexican, American and Canadian markets and knows the developers.

Because there is no formal license for real estate agents in Mexico, he advises buyers to seek real estate agents affiliated with AMPI (the Mexican Association of Real Estate Professionals), as they comply with professionalization requirements, provide continuing education and conform to ethical practices guidelines that protect the interests of the buyer and provide a positive experience.

“There are currently talks at the national level to try to establish licensing requirements for real estate agents endorsed by the federal government. I think this is very likely to happen in the future, and AMPI is very committed to the issue.”

At the local level, Kost mentions that it is important to consider the large number of developments being built in areas such as the Romantic Zone and the modern trends that some are introducing to the urban landscape. Many expatriates and potential foreign buyers find the traditional charm attractive, and these properties could change this atmosphere, so there are uncertainties about the outcome.

“The city’s urban planning committee and locals must be involved and committed to promoting measures that drive Puerto Vallarta’s growth and infrastructure in a favorable direction. It is true that there are buildings that need renovation and that the city will inevitably change, but it is in their hands to preserve what is valued by visitors and residents and to ensure that the city evolves in a successful way.

Before concluding the interview, Kost pointed out that in Guadalajara there have been very interesting renovation projects that have harmoniously integrated new trends into the city’s landscape and are enjoyed by residents. Puerto Vallarta could find an option in this type of model as long as there is participation on the part of its inhabitants.