Almost halfway through 2021, the Vallarta Real Estate Guide editorial team approached Sherri Narro, founder and president of Sherri Narro & Associates; Aaron Fisher, co-founder of MexHome; Taniel Chemsian, senior sales associate at Timothy Real Estate Group; and Wayne Franklin, president of Tropicasa Realty for their views on the present state of real estate in our destination. They also share their projections for the rest of the year, after having left behind 2020. Contrary to what might have been anticipated with travel curbed by the pandemic, the previous year turned out to be better-than-expected for real estate transactions in both Puerto Vallarta and Riviera Nayarit and several factors have come into play that have driven this new trend.
This first part will address the behavior of the real estate industry in Vallarta · Nayarit during the first six months of 2021. Our experts also discuss some of the main reasons that buyers’ interest has remained high in our destination throughout the past year despite travel restrictions that have kept U.S. and Canadian tourists away.
After having experienced the highest peak of the health contingency, which occurred between March and June 2020, Wayne Franklin explains that the local real estate market has benefited significantly from the changes that have occurred to the way people live and work as a result of the pandemic. He says that buyers now acquire properties for several reasons:
a) Now they can work remotely.
b) They are retiring early.
c) They permanently moving.
d) They are cashing in from their earnings in the stock market.
e) They are taking advantage of low interest rates and refinancing their properties.
“It seems that as travel and borders open even more, there will be an expansion of this process. Therefore, it is easy to imagine that during the rest of the year and probably the entire following year, we will see this trend will continue,” says the president of Tropicasa Realty.
For his part, Aaron Fisher emphasizes that the real estate market has been very busy in most of Mexico’s beach destinations. He says that any place with direct flights and access to many high-quality experiences and services, good weather and high-speed internet are getting a lot of attention, including Vallarta · Nayarit.
In addition to agreeing that people can now work online and many of them will never return to the office, and that thanks to this they can choose anywhere in the world to do so, he considers this phenomenon is reshaping who the target buyer is and now has two major motivating factors:
a) Currently, as the American and Canadian real estate market are highly valued, many foreigners are obtaining access to Home-Equity Lines of Credit, which allows them to obtain large loans guaranteed against their current houses and/or they simply deciding to sell their houses at a record price as the US real estate market is in a boom.
b) During the pandemic, people realized how short and fragile life really is, so it makes no sense for them to wait any longer to start enjoying themselves. Now is the time to do the things they want as opposed to waiting for retirement.
“This idea of people being focused on achieving their dreams has been accelerated by five years, they are experiencing a refocusing of their priorities and what life looks like for them in the short term. Mexico is a place that personifies paradise and quality of life, so it is the ideal lifestyle solution for many. The concept of living on a beach, learning a second language, enjoying a lower cost of living and higher quality of life is really interesting. After a long confinement, people are ready to travel again, so they want to be in a safe place, where they can socialize and realize their goals,” says the co-founder of MexHome.
For Taniel Chemsian, the use of technologies such as FaceTime and WhatsApp video, among others, made buyers feel comfortable being able to “visit” properties (even though many of them need to visualize themselves in spaces) and in this way sales were boosted last year as a new way of engaging with real estate was born.
In fact, the senior sales associate at Timothy Real Estate Group comments: “After people got over the initial panic and were able to cope with the changes in their careers, jobs and lifestyles, they started talking about what they want to achieve and where they want to be in three or five years. Many couples are working together from their homes in the United States and Canada, so they are analyzing their options to choose where to live and, although these large cities represent excellent options for everything they offer, the truth is that the cost of living is higher than in a place like Vallarta · Nayarit. Here they can find incredible properties, with open spaces and excellent amenities. In addition, the excellent air connections to these two countries makes our destination even more attractive since they can be very close to their places of origin and/or the headquarters of their companies.”
Finally, Sherri Narro shares that although the pandemic may have impacted the real estate industry in Vallarta · Nayarit during 2020 (since foreign purchasers make up so much of this market), she considers that the very high values in the stock market and the recently proposed U.S. tax increases will cause a large block of taxpayers to take their profits, that is, to sell their assets on low bases under a more favorable capital gains tax in 2021. They will likely turn around and reinvest their dollars in income-producing or personal residential assets outside of their home countries.
“Therefore, they will thus be looking to place those funds in new assets, but with higher bases during the rest of 2021 and into 2022—such as the purchase of real estate in a destination like Vallarta · Nayarit. So, if everything continues according to plan, the rest of this year and the next will be very active for our industry here,” concludes the founder and president of Sherri Narro & Associates.
In the second and last part of this special article, the estimated projections on the behavior of real estate transactions in our destination during the rest of this 2021 will be addressed more thoroughly.