by: Wayne Franklin
The market in the Bay of Banderas to include Puerto Vallarta, Nuevo Vallarta, Bucerias and points beyond, have experienced a significant increase in market activity and sales this year over last.
While house sales dropped from $34.5M in sales last year to $28M in sales this year, an 18% reduction, condo sales soared from $37M in sales to $61M, a 64% increase, netting an overall 24% increase in both condo and home sales. My personal sales this year have doubled from the year previous.
Some of the increase can simply be attributable to the diligence and skillset of the agents and/or agencies involved. Some are having great difficulty in working in this climate and are giving up on deals that could be made if it were not for the lack of ingenuity or persistence. But that is clearly not the whole story.
Buyers in all strata have a renewed interest in buying and a sense of urgency seems to be creeping back to the marketplace. Part of that is that some of the ¨best deals¨ are either gone or seemingly on their way out, and thus, the market seems to be turning a corner toward the better. In addition, new construction has seen a resurgence and buyers are much more confident to venture into preconstruction projects again. That said, pricing and location are critical – not just any new development will have success.
As a result, there is increased inventory on the market, which we hope will only keep pace with the interest and not outpace it for the risk of flooding the market with inventory and having the undesirable effect of overpowering the market again and seeing softer prices. So far, that has not happened and numerous sellers have been able to stand firm on their pricing or at least have stronger negotiating positions. Overall, sales prices still seem to hover between 5-10% off ask.
The average sales price of condos has also increased from about $283,000 last year to $321,000 this year. That is a significant increase if you consider that the $500,000 to $800,000 market has been dead for years, and this year saw a significant increase in that market, both in houses as well as in condos. Yet the overall numbers for average sales price of a home decreased from $565,000 to just under $510,000. Houses have no doubt seen the biggest hit in this market, but now it seems that buyers feel that it is a good time to trade up or buy into that home that they could not afford before.