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| First
Half of 2003 Real Estate Sales Report
By Harriet Murray
August 3, 2003 |
 How
has our real estate market performed the first half
of 2003? There are 485 active listings in the Vallarta
Multi List, which includes inventory from 29 cooperating
real estate agencies within Banderas Bay. Additionally,
the Multi-Dev lists 20 developer projects, which advertise
their properties, but do not report sales to the MLS
agency database.
The geographic area for this report
includes portions of the state of Jalisco and Nayarit
from Boca de Tomatlan/Mismaloya on the south to Rincon
de Guayabitos/San Blas in the north. Guadalajara/Lake
Chapala-Ajiji in the state of Jalisco has its own MLS
system. Not all properties listed for sale are included
in the Vallata MLS. Not all sales within the bay are
reported to this database.
For the period Jan-June, 2003, 76
properties are reported sold compared to 58 for the
same period in 2002. Dollar volume of listed prices
of properties sold increased by $2,600,000US in 2003
from 2002. Sold dollar volume of listed prices for this
year increased $2,000,000US over the first half of 2001.
Condominium sales continue to be
the majority of sales reported; with 24% more reported
sales the first half of 2003 over 2002. Increase in
condominium sales for January-June, 2003 was 5% more
than the same period in 2001.
Reported homes sales for Jan-June
2003 were 29% more than 2002 and 25% more than the first
half of 2001. The same number of homes listed for over
a million dollars have been sold for the past two years.
However, a large sale, unreported through the MLS, occurred
in the first half of this year for over two and a half
million dollars. This sale brings the number of million
dollar sales to a level higher than previous years.
Indications are that with the closing
of another multi-million dollar sale in July, the market
will be ahead of previous years in the number of million
dollar and higher individual sales.
The number of lot sales increased
in first half of 2003 over 2002, by 60%. More lots were
reported sold in the first half of 2001, however; than
the same periods in 2002 and 2003. Lots reported sold
remain the smallest percentage of inventory, behind
condominiums and homes. Reported lot sales for the past
three years have averaged less than 6 per year.
These figures reported for condominiums,
villas and residential lots do not include developer
reporting in most cases.
The range of listed prices of condominiums
sold was from 66,000US for a studio to over one million
dollars for a penthouse. The average listed price for
a condominium sold during the first 6 months of this
year is approximately $215,000US. The majority of condominium
products available are two bedrooms. Fractional sales
of condominiums are sold within the bay, but no statistics
are available at this time to include in this report.
The average listed price of a home
sold was approximately $346,500US for the first half
of the year, about the same average for the same period
in 2002. The average listed price of a lot sold was
$81,000US, down approximately 3% from the 2002’s
first half.
PERSPECTIVE:
The real estate market has improved
in the number of sales from the previous years and all
indications are that the market will continue to have
good activity.
Sellers have reduced the prices of
some listings to become more in line with the market.
More buyers began appearing in the bay in larger numbers
in 2002. They were looking for opportunities to buy
properties in Mexico and Banderas Bay, in particular.
Americans and Canadians have shown
their interest in acquiring real estate in increasing
numbers for the past 9 months. These buyers are continuing
to shop. They want value and they are willing to pay
cash for their purchases. These buyers use cash on hand
or have cashed out from previous investments. They have
also re-financed properties in the US to acquire capital
to purchase in Mexico. Mortgages, while available through
a few lenders, are not typical at this time in this
market.
In the beginning, there were increased
numbers of buyers in the lower price ranges. Gradually
more high-end buyers came into the market. In a real
sense, the “little guy” led the way in this
market activity of the past 9 months.
Foreign buyers in this current market
have decided placing money in Mexico is not an unsafe
proposition. These buyers expect an increase in the
value of their purchase as well as enjoyment for personal
use.
Buyers are choosing properties over
stock portfolios and instead of, or in addition to,
other US real estate. Many of the cities in the US have
seen increased real estate sales due to low mortgage
interest rates, and a preference of real estate over
stocks and bonds. The market in Banderas Bay offers
an alternative. An increasing number of buyers are planning
ahead for their retirement years and they want to reduce
their cost of living.
This real estate market is in contrast
to Europe, where homes are owned for generations within
the same families and rarely available for sale. The
amount of inventory for sale in Banderas Bay is large,
in part because of the more frequent turnover in a second
home market. The classic rule still is: price, location
and amenities are the prime factors in the ability of
a property to sell.
Developments continue to add needed
new product to the inventory. These developers are producing
a range of product from fractional sale condominiums
to multi-million dollar villas. These companies have,
for the most part, experience and money to complete
their projects. Every buyer should conduct his or her
own due diligence before making a purchase. Buying new
construction or pre-construction is very different legally
and financially in this market and in this country.
Buyers need to take the time to understand the process,
risks and rewards before buying.
The majority of reported sales in
this report are of pre-owned properties. Even without
the issue of pre-construction, all buyers should understand
how to purchase within the restricted zone and understand
responsibilities of ownership.
It is important to understand that
this report is based on the reported number of sales
from one database. This report does not include private
sales or sales not included in the MLS. Agencies not
affiliated with AMPI do not report. Agencies that are
members of AMPI do list and sell property that is not
in the Multi-List.
This report does not give the average
sales price, but the average LISTED price. At this time,
a report of actual sales prices is not available. The
number of days on the market before a sale is not reported.
Each buyer needs to take the time
to learn the sales price trend in the market in which
he is interested in buying. Traditional comparative
market analysis is not available at this time, except
for the reports individual agencies or agents may provide
of their own sales and their personal knowledge of other
verified sales.
This article is based upon legal
opinions, current practices and my personal experiences
in the Puerto Vallarta-Bahia de Banderas areas. I recommend
that each potential buyer conduct his own due diligence
and review. The National Association of REALTORS has
provided information for this article.
HARRIET MURRAY
Harriet
Murray, Broker
For additional information on properties for sale or
lease within the bay, please call or e-mail me at: harriet@casasandvillas.com
Thanks and until next week.
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