Is the Puerto Vallarta real estate market slowing down?

 

I keep getting asked about the PV market and where it’s at since the USA and Canada are showing signs of slowing. So what’s happening in PV? Good question! And a Very logical question to be asking as naturally you’d think the PV market would follow the USA market to some degree. It certainly has in the past.

 

Although I’m not an economist, nor do I have a crystal ball, here’s my thoughts and reasons of why I believe PV market will and would continue to stay strong, independently of the USA and Canadian real estate markets.

 

Traditionally, PV was mostly consisting of retirees. It was a retiree destination. But over the last few years, there has been three other market forces. 3 other reasons that bring people here in droves.

1) The rise of digital nomads during covid. Working from home is now an acceptable thing therefore why not work in a nicer climate, by the beach, where it’s cheaper to live…? I would!!

2)  The anti-vaxers chose Mexico as a destination to move to. As other country’s tightened up and enforced covid rules. Mexico kept things relaxed with no real barriers to enter.

3) There is a growing/wealthier Mexican middle class looking to buy a second home/vacation home or investment property and PV fits their criteria (after all, why wouldn’t it!). And being so close to Guadalajara and a new highway being put in, it’s an easy weekend destination for the people living in the 3rd largest Mexican city. (Or second largest city..but let’s not start that debate here).

4) And of course, it’s still a top retiree destination (and considered a top retiree destination globally). The retirees are not going anywhere. In fact I get enquires from retirees looking to buy here from many European countries, England, Australia, New Zealand - not just USA and Canada anymore.

 

Other driving factors - directly from the enquires I get, as a real estate agent, from new buyers looking to buy here in PV:

  • people looking to leave the USA or Canada because of the current political climate. It’s sad to say it, but every time there’s a mass shooting in the USA, my phone rings with a potential buyers fed up and ready to relocate to Mexico.
  • People who are just finding their countries too expensive to live in and looking for a place where they can have their money go a lot further and have a better lifestyle. Maybe it even allows them to retire earlier than they thought was possible.
  • People who have had enough of the cold winters. They feel the winters are getting more relentlessly cold and are ready for the tropical climate lifestyle. Last winter was particularly extra cold winter in most places.
  • People wanting to invest In real estate but instead of buying an investment property in the same town as they live, they prefer to diversify and buy a rental income vacation property in a different country that doubles as an investment/vacation home. Since PV has become more widely know and the airbnb website can make running your own little hotel business an easy reality.
  • People who have re assessed their lives since covid and decided to make changes and one of those changes have been to take the plunge and act on their PV lifestyle real estate dream.

 

Lastly,

A big factor that keeps PV real estate market stable is we are mostly a cash market here. People usually own their properties outright without a loan. And it’s usually a second home/property. So owners of properties don’t feel the pressures of interest rate changes etc. They can sit and ride out the storm. (This is a reason that traditionally properties sat on the market here much longer than they would in USA and Canada - a seller never “had” to sell therefore they would wait till they got the price they wanted - which was sometimes years of waiting).

Therefore less chance of finding  “distressed sellers” which is normally what sends a real estate market spiralling.

 

I believe good quality real estate in quality locations always have a demand regardless of the market conditions.  I’ve been an agent in both good and bad markets. And the biggest thing I notice for buyers is: in a hot market, buyers are under much more competition with each other. They have to fight to buy a property which results in paying over asking price and making a cleaner offer (removing contingencies that would make an offer more appealing for the seller). A buyer also needs to be quick to decide. Just recently a quality property sold within 2 hours after being listed on the MLS. The buyer was ready, educated, cashed up and when they saw the listing, were ready to pounce and pay a price that they perceived would knock any other buyers out of the game. Are you ready to do that? 😜

In a bad market, people still know what a good quality property is and in a good quality location. There are still buyers for those properties but just fewer to compete with. As a buyer. You have more breathing room to make a decision and negotiation time with less “fear of missing out”. Enjoy it but don’t think you can play hardball for too long, markers turn and buyers turn up and before you know it, you’ve missed out on your dream home…again…

 

Side note: Poor quality properties in less desirable locations - in a hot market Will eventually sell because there’s enough urgency in the market.  Enough buyers who are worried about not being able to secure a property.

In a bad market, those properties sit on the market (unless they are priced extremely aggressively to sell). Some advice: you might think your getting a bargain but if it’s a poor quality property in a less desirable location, you still need to think about resale In order to recoup your investment later on. I sometimes think it’s better to over pay for a quality property in a quality location. Than get a bargain for a property no one else wants to touch. Because more often than not, that property will always be a property that buyers don’t want to touch.

 

Some of the reasons PV has so much going for it:

  • Very connected airport
  • Beautiful weather
  • Character and charm
  • More affordable living costs
  • Good healthcare
  • Access to Healthy fresh fruit, vegetable and seafood. At reasonable prices.
  • Water activities, fishing, boating,
  • A slower rhythm of life
  • All these benefits but yet your in the USA within a 2-4 hour flight. So you can easily visit your friends and family when you want to.
  • Luxuries of Costco, good supermarkets, fresh markets and a wide range of many great restaurants, bars and cafes.
  • So many different neighbourhoods, all with different vibes - a neighbourhood to suit everyone’s taste and budget.
  • Lots of beach’s and beach clubs to explore all along the coast, some only accessible by boat. How exotic!
  • Beautiful mountains to give an extra vista appeal. They never get boring.
  • Hikes, surfing, horse riding, good American and British schools for the kids.
  • Safe
  • Lovely friendly people
  • Strong rental demand from tourist and holiday makers.

 

…I could go on forever with reasons…just ask any of the expats living in PV, they will have their list of reasons. Myself, for sure, I came from a fantastic country, New Zealand, but once I experienced PV, it had me on the hook. It wasn’t hard choice to call PV my new home.

 

Can you see why PV is growing? Why it’s a serious destination to consider? Why I think it has strong reasons to keep humming along even if the USA and Canada markets slow down?

 

Again, my disclaimer, I’m a real estate agent and not an economist and I’m yet to find an accurate crystal ball - but I hope this blog article gives you an optimistic perspective and reassures you, PV is a great place to be!

 

Paul Trimmer

Paul Trimmer Real Estate Agency.

www.paultrimmer.com

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