After 2023, when the real estate market in Puerto Vallarta and Riviera Nayarit experienced notable ups and downs, the Vallarta Real Estate Guide editorial team reached out to five prominent players in our region’s real estate industry, to get their opinion on how they think the market will behave during this new year that is just beginning.
Highlighted in this special article are Wayne Franklin, president of Tropicasa Realty; Aaron Fisher, co-broker/partner at MexHome Real Estate; Sarah Elengorn, director of Elengorn Realtors; Javier Rodríguez, specialist in luxury properties at Sotheby’s International Realty and Victoria Pratt, director of the North Coast division of Timothy Real Estate Group, who offer their views for 2024.
A LOOK BACK AT 2023 AND BEFORE
Javier Rodríguez begins with a retrospective analysis of the real estate market in Puerto Vallarta and Riviera Nayarit: “After the notable increase in sales during the 2020 pandemic, which extended into 2021 and 2022, there was a decline in the first months of 2023. This decline is attributed to crucial factors such as the peso’s parity against the dollar and the war in Europe. Initially, these elements generated caution amongst buyers, who were more reserved until the certainty about the safety of their investments became more evident.”
Sarah Elengorn addresses the influence of U.S. interest rates on the housing market: “Even though these rates affected the market of younger buyers who emerged during the pandemic, especially those working from home, the market remained active in 2023. Retirees, in particular, continued to acquire resale properties in strategic locations, such as Old Town Vallarta, a pattern that is expected to persist into 2024.”
Wayne Franklin agrees that sales volume saw a decline in 2023. “However, it should be noted that there was a significant increase in average sales prices over the past year.”
Aaron Fisher, discussing current economic uncertainty, points to the projected strength of the dollar against the Mexican peso as a positive indicator of growth and renewed interest in the market: “In the current context, I would like to highlight the opportunity that exists for developers and buyers who trade in dollars to maximize returns on their investment, leveraging the region’s unique value propositions.”
FORECASTS FOR 2024
Elengorn points out the complexity of forecasting trends for 2024. However, she shares that monitoring key factors, such as the current economic stability, the influx of visitors during this current season, and the abundance of real estate developments in the bay, offers a favorable outlook for the start of this year.
Fisher provides a point of view focused on the expected strengthening of the U.S. dollar against the Mexican peso. A change in the currency exchange rate could help developers achieve their profitability targets and be able to offer more attractive prices to international buyers. In addition, he emphasizes that current conditions are ideal for U.S. buyers, as this changing dynamic could translate into greater purchasing power and greater value for their investments.
On the other hand, with 2024 being a presidential election year in both Mexico and the United States, Franklin recognizes the uncertainty inherent to these political events and stresses that this year could be challenging for the Puerto Vallarta and/or Riviera Nayarit real estate market. However, with a solid hotel occupancy rate in the current winter season, the first few months of this year could be very positive.
In this context, Rodríguez projects a 2024 with a second half that could have a significant acceleration in the average number of real estate sales. He anticipates that the supply of properties that are priced correctly will be quickly purchased by buyers, and new developments will experience a boom thanks to this same level of interest, as well as high returns on capital gains.
VALLARTA · NAYARIT: ATTRACTIONS AS AN ANCHOR
Pratt believes that the region of Puerto Vallarta and Riviera Nayarit is highly secure for its natural characteristics and features, which together result in a very attractive area, both for tourism and real estate investment. The increasing arrival of Mexican, U.S. and Canadian visitors has meant that the satellite communities that are located along Banderas Bay are now very attractive micro-destinations to visit, regardless of the main attraction that is Puerto Vallarta. In addition, she underscores the key role of a sophisticated real estate industry that has developed over the last 25 years, which has been carried out hand in hand with continued investment in infrastructure in both Jalisco and Nayarit.
Additionally, Fisher highlights the privileged position of Puerto Vallarta and Riviera Nayarit as premier real estate destinations, highlighting their innate appeal. Today, the Banderas Bay region is seen as one of the most desirable vacation and/or retirement locations. It should also be noted that as global economic factors evolve and local dynamics transform, the market will regain its strength.
KEY FACTORS TO WATCH IN 2024
Wayne Franklin, president of Tropicasa Realty, highlights a potentially influential factor in the real estate market for 2024: “After the tragedy that occurred in Acapulco with Hurricane Otis, attention may be more focused on destinations such as Puerto Vallarta and Riviera Nayarit, which could attract more visitors to the region and, therefore, cause a slight uptick in real estate transactions,” he concludes.
Javier Rodríguez, luxury property specialist at Sotheby’s International Realty, adds: “There are many circumstances that can lead to a successful 2024, but I believe that the elections in both Mexico and the United States will be key,” he concludes.
Sarah Elengorn, director of Elengorn Realtors, said: “The growing number of visitors from the United States and Canada is essential for Puerto Vallarta and Riviera Nayarit. Although they are not necessarily buyers, their presence in our destination contributes to keeping the rental market strong and stable, which ultimately causes interested investors to be active,” she concludes.
Aaron Fisher, co-broker/partner at MexHome Real Estate, shares: “The U.S. Federal Reserve has substantially modified its interest rate policies in the recent past. The period of low rates between 2020 and the end of 2021 that saw upward trends in real estate investments, including those made in our region, has been replaced by a hike in interest rates starting in March 2022. These changes have directly impacted U.S. buyers, who traditionally rely on mechanisms such as Home Equity Lines of Credit (HELOCs) to finance their investments. Because of this, access to real estate capital is becoming less attractive, which may result in a slowdown in property acquisitions.”
Victoria Pratt, director of the North Coast division at Timothy Real Estate Group, concludes: “Without a doubt, all of these factors are geared towards strength and resilience in times of turbulence. That said, my sense for 2024 is that the housing market will be largely supported by wealthy investors who are less sensitive to these temporary or cyclical circumstances.”