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 Sources for sales figures for this article are from the Vallarta Multi -List in which member offices in the Bay report, and from unofficial reports from developers within the bay. These figures do not take into account private sales, or other methods of reporting from developers and some agencies. The conclusions are mine from the information available at the time of this article. My purpose in writing this report is to give to the reader some understanding of the trends in the market place in the Bay of Banderas . This report is a snapshot of the overall market for this period, and is not intended to be a definitive or comprehensive report of all market activity.
148 sales transactions were reported for residential sales by member offices of the Multi-List for Jan.-July, 2004. All market areas of the Bay reported sales, including San Pancho on the pacific coastline, to Mismaloya on the south end. Of this number of sales, 45% of the transactions were between co-operating real estate agencies, and 55% were from transactions when a singular office represented both the buyer and seller. The trend of more cooperation between offices has continued and is an indicator that more buyers and sellers are exposed to the entire market place of listings.
March and April had the largest amount of closings in all types of residential properties: home sites, condominiums, and villas. These record-breaking months for sales indicate the offers were submitted and agreed to 30-60 days prior to closing. The market was slowed in closings and in some cases transactions did not occur, during the time the market was adjusting to capital gains consequences for sellers.
So far this year, there have been no weak months for posted closings: indications are that strong activity is continuing into September. The north end of Punta Mita experienced sales in development land and new construction the first half of the year in excess of 59 million dollars. Developer sales are harder to track, but we know that additional healthy sales occurred in La Cruz de Huanacaxtle, San Pancho, Sayulita, Nuevo Vallarta, Marina Vallarta, Amapas, and Costa Banderas.
The percentage of discount between sales price to listed price for reporting offices ranged from 7%-12%. This percentage of discount indicates a good supply of buyers with seller's getting their prices without deep discounts. In a traditional sense, this indicates a seller's market, but more importantly; there is an equilibrium or balance between supply and demand. If the properties were being heavily discounted, it would indicate a buyer's market with a large supply of inventory for sale. In a strong sellers' market, sellers would be getting full asking price, or above asking price for limited inventory and great demand from buyers.
Of the 148 reporting sales, 13% were home site sales, 34% were homes, 51% condominiums, and 2% was other, such as commercial leases. The sales in this report are for primarily residential product, not commercial sales or leases. Currently there is very little data available for commercial real estate sales.
Pricing of real estate in the Bay is most often in dollars, for purposes of the offer and acceptance. Sales proceeds can be in dollars. The Mexican peso is the official currency, so the deeds will show value in pesos, and in some cases, the dollar amount paid.
While the average sales price of a villa or condominium was not a million dollars or more, there is an increase in listed homes for sale of over a million dollars compared to years past.
Individually listed inventory at a million dollars or more: Conchas Chinas has 9 villas listed from $1,300,000US-2, 395,0000US. Downtown South has three condos listed from $1,100,000US-1, 250,000US. Marina Vallarta has one penthouse condo for $1,495,000US. The North Shore has 6 villas listed for $1,175,000-3,600,000US. There are 10 North Shore land listings for $1,000,000US-3, 689,000US. Punta Mita has 2 Villas for $2,950,000US-3, 390,000US and 7 land tracts for $1,078,000-2,950,000US. San Pancho has two land tracts for $1,600,000-2,019,189US. Nuevo Vallarta has 4 villas for $1,050,000-2,595,000US and a ranch for sale for $2,975,000US.The South Shore inventory is currently 11 villas listed for between $1,190,000US-3, 950,000US.
Developer inventory includes Pontoquito home sites from $500,000US-2, 000,000US; Punta Tortugas has 13 home sites from $250,000US-600,000US. Las Olas in San Pancho has remaining home sites from $262,00US0-600,000US. Real Mar home sites begin at $360,000US. Punta Mita Lagos del Mar has 32 lots beginning at $200US a square meter. Sierra de Vallarta on the south shore has 35 lots from $333US a square meter.
The large volume of sales of land occurring in the north end indicates a gearing up for development of more products: villas, condominiums, and commercial inventory. Traditionally, many development projects have had limited sources of outside financing, therefore; overbuilding in general, has been avoided.
For a 5-10 year outlook, there will be more inventories for sale north of Puerto Vallarta , while development on the south end will continue with some new developments. Prices on the south side should not go down. There is less land left for development on the south side than the north areas. Demand in the core of the city and south will make it cost effective to remodel or tear down existing properties for newer construction.
The entire bay has an enormous base of investment from North America ( Mexico , Canada , USA ), South American, Europe, and now the Pacific Rim . The momentum of this investment, plus the strong appeal of the natural physical environment here, will continue to fuel demand from buyers for real estate, as well as influence the international demand for vacation traveling.
Further strengthening the current market is the development of "brand names" which have becomes synonymous with our quality amenities in the Bay. "Punta Mita" has become a brand name and " Puerto Vallarta " is also. The consumer usually comes with one of the "brands in mind" as his favorite, and goes to that location to seek out where he wants to buy or rent.
Appreciation: This is hard to determine until we have more sales data for a longer period of time. We cannot use listed prices as a source of accurate information for comparables. As more real estate agencies and developers understand the importance of accurate reporting of sale prices, better data will be available to enable the seller to know what a realistic price is to sell his property. The consumer will be able to understand what is a fair market price for a property he wants to purchase. The professionals who advise buyers and sellers will be able to do a better job of marketing and selling properties. We will also be better able to tell when a market is changing. We can then make adjustments in pricing and inventory to keep a more stable supply of demand and supply.
No one is ever going to be able to take out the importance of intrinsic value of a property. People buy with their emotions and heart, as well as their pocket books. Having good data will enable the consumer to make informed decisions on buying and selling.
"Intrinsic" is defined by Webster's dictionary, as: "inward, belonging to the real nature of a thing; not dependent on external circumstances; essential; inherent." * "intrinseco" in Spanish.
This article is based upon
legal opinions, current practices
and my personal experiences.
I recommend that each potential
buyer or seller conduct his
own due diligence and review
.
Harriet
Cochran Murray
For
additional information on
properties, for sale or lease
within the bay please visit Harriet
Murray website, call
or e-mail me at: harriet@casasandvillas.com
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