According to a census study of IIEG (State Institute of Statistical and Geographical Information), the populations of Puerto Vallarta and Riviera Nayarit increased by 26.2% over the past 10 years. In 2010 the population for the Bay of Banderas was 380,000 whereas in 2020 it had increased to 479,500 inhabitants.
Puerto Vallarta makes up 60% of the population in the region with the remaining 40% residing in the neighboring state of Nayarit. According to IIEG, Riviera Nayarit’s population increased by 51% while Puerto Vallarta’s increased by only 14%.
IIEG also announced that 2.1% of the population was foreign (9,800 inhabitants), of which 56,880 were from the United States.
In 2020 Covid challenged the world and it was no different in Puerto Vallarta and Riviera Nayarit. It caused havoc for the hospitality, restaurant, and bar industries and the local real estate market was no exception. The year finished down approximately 17% over last year’s banner year, and slightly under sales volume in 2018. That’s the results when comparing sales results year over year. But most real estate sales happen a month or two prior to the closing date, so in effect, many of the sales that were recorded in the first quarter of 2020 were actually “sold” in the last quarter of 2019. And as well, the significance of Covid wasn’t realized until in the latter part of the first quarter. Looking at sales by quarter and comparing it to the previous year we see that the first quarter was down slightly by about 10%. But in the second quarter sales tanked with volume down by 50%, followed by down 25% in the third quarter. Sales rebounded in the fourth quarter by 23%, as possible containment hopes and a release of a vaccine, became more optimistic.
Interest in tourism real estate remained strong for American and Canadian buyers, even though for much of the year it was difficult for anyone to physically view properties, or at times, to even get to Puerto Vallarta. This was partially offset, however, by an increased interest by national buyers who found traveling outside of Mexico difficult and complicated and so turned inwards and traveled within the country, resulting in more Mexicans buying in the region than in years past. The fact that they could purchase real estate in US dollars and therefore lock their investment into a more secure currency, didn’t hurt either.
Covid has forced many agencies and developers to get creative, such as offering online virtual tours where one can actually walk through a property, room-by-room, without actually physically being there.
But before jumping into more statistics, a little about the local market.
Puerto Vallarta lies within the state of Jalisco, close to its neighboring state of Nayarit to the north. Their border, (the Ameca River), actually splits the Bay of Banderas in half with Vallarta and its suburbs residing on its southern shore. The coastline north of the Ameca is commonly referred to as Riviera Nayarit. For tourism real estate (second home and foreign buyers), Puerto Vallarta traditionally makes up about 2/3s of the market, or twice the number of sales as reported in Riviera Nayarit.
This is a little misleading, however, because of the manner in which real estate sales are reported in the region, or in Mexico for that matter. There is no central database available to extract what sales have actually taken place as you find in the USA or Canada. The only source is what real estate agents report within their MLS systems. The closer to central Puerto Vallarta, the better the reporting has been. But as you move farther away, especially into Riviera Nayarit, sales reporting diminishes. This is especially noticeable in the Punta de Mita area at the north end of the bay which offers primarily high-end, upscale real estate options and has been tremendously successful but whose full numbers are not being reported in the MLS systems. The same goes for a number of real estate developers that may not be part of the MLS systems – many are not reporting their sales either. This means that actual gross sales for the entire region are most likely significantly higher. That said, there is still enough to identify significant trends in the marketplace. And here are some of them.
The previous graph shows that the market has experienced tremendous growth in recent years as it recovered from the 2008 economic crisis, although part of this growth is also due to the fact that there is much better sales reporting taking place. The Puerto Vallarta and Riviera Nayarit region delivers one of the most sophisticated real estate markets in Mexico, on par or second only to Los Cabos. For much of the rest of the country, there are no MLS services, which are well known for providing excellent marketing tools for real estate professionals and making it much easier for prospective buyers to know exactly what is for sale in a region. Looking for real estate in Vallarta isn’t much different than how it is north of the border. That said, the buying experience can be quite different as you are dealing with a different language, culture, and currency. Three good reasons one should use a real estate professional when buying or selling real estate in the region.
When looking at the market by how specific price ranges have trended we can see there is appreciation taking place, as reflected in the graph below which shows there are fewer properties available for under $100,000 while there are more in the million-dollar range. Part of this is reflected in supply and demand, but as we’ll see shortly, there are other factors showing prices are indeed increasing.
As the condominium market makes up for at least 2/3s of all sales and has done so traditionally for many years, we can get a better of how the market has performed over the past five years by just looking at their sales data. In the graph below we see a trend of increasingly more sales above $500,000 while fewer sales for units under $100,000. Realtors are reporting so far for this year an increase in interest in the $500,000+ price range but with limited supply, suggesting that this trend will continue. The most popular range is between $100,000-$250,000 with over 80% of sales for condos under $500,000.
In 2007, at the top of the market, condos were selling substantially higher with an average sales price of $400,000. Although condominiums values dropped, they have since rebounded, although not to previous reached levels. In 2020 the average sales price for a condominium was $340,000. But to put this in perspective, 2006-2007 were exceptional years which saw demand outpace supply, which drove prices up dramatically. Prices had been rising dramatically over previous years.
The two-bedroom condominium accounts for nearly 50% of all condo sales and has done so for years. The graph below also shows that studio units are becoming more popular. The probable reason for this is as prices have risen, in order for real estate developers to offer a low-priced unit, they resort to offering more studio condominiums that utilize space efficiently.
If we look at the condo market by type and how they have appreciated over the past five years, we get the results below. A one or two-bedroom unit has seen prices rise rather consistently by about 20% over the past five years. In 2020 we saw studio units spike while 4 bedroom plus units dropped. This is most likely a reflection of a downturn in an unsure market where buyers became more conservative and bought something smaller and less expensive. There was also a substantial increase in the availability and sales of high-end studio units in the Central South area of Vallarta.
The average sales price of a condominium has gone up substantially and consistently over the past five years – $260,000 in 2016 while coming in at $340,000 in 2020, appreciating by more than 30% over this five-year period. Interestingly, the average size of a condominium did not change, staying relatively consistently at 138 m2 or just under 1,500 f2.
Another way to look at this is unit size. Traditionally condominiums under 100 m2 make up 1/3 of market sales and consist of studios and one-bedroom units. Units from 100-150 m2 make up another 1/3 of the market and are usually consist of two bedrooms. And the final 1/3 is made up of condominiums with three or more bedrooms. The graph below reflects how sales prices have risen for units 100-150 m2 in size.
When it comes to what areas have seen the most sales, there are five that have traditionally been the most popular: Central South, South Shore, Hotel Zone, Marina Vallarta, and Nuevo Vallarta/Flamingos. Central South (south of the Cuale River and before the rise up into the mountains of the South Shore coastline) has been very popular for a number of years now and continues to dominate with about 20% of the overall condo market, although this has been dropping (it was at 26% in 2016).
When just the top five areas are considered, Central South makes up about 27%, (down from a high of 33% in 2016), while Marina Vallarta has just 4% market share. The South Shore had a 22% market share in 2016 but it was down to 13% in 2020. There are probably multiple reasons for this. For quite some time the South Shore (Amapas, Conchas Chinas, Garza Blanca, Real del Mar), was the place for high-end luxury properties in the bay. And it still is to some degree, but some of its shine has been diminished by the opening up of land on the other side of the bay (especially in Punta de Mita). Other factors are, that although the coastal mountains provide excellent viewpoints for properties, it is also more expensive for building and there is less buildable land available. As well, it is situated a ways from the Vallarta airport – you have to go through Vallarta to get to it. But it still has its allure with lush mountain vegetation, amazing hillside views, and a spectacular rocky shoreline you just can’t find on the other side of the bay.
“Other” encompasses all the other popular real estate districts or areas in Puerto Vallarta and Riviera Nayarit. In 2016 it accounted for just 19% of the market, but it has been increasing each year, now up to 28% in 2020. This includes ever more popular areas such as Bucerias, La Cruz, and a little farther out, Sayulita and San Pancho.
Missing from here is Punta de Mita, which really is a market of its own and perhaps should be considered separate from the other markets.
With the market finishing up 23% in the fourth quarter when compared to 2019, and with the world seeming to finally be in a position to handle the Covid crisis, this year for the Puerto Vallarta & Riviera regions sales will probably be stable but improving as we move through the year as lockdowns and confinement regulations are lifted and vaccine distribution, and inoculations, improves.
Thanksgiving travel volumes may look different this season as Americans navigate a changing landscape of travel restrictions amid COVID-19. While the numbers are down from last year, travelers are still planning trips during the traditionally busy holiday season, according to Allianz Partners’ Top 10 Thanksgiving Destination Index.
Allianz reviewed travel plans around Thanksgiving for outbound flights scheduled between Saturday, Nov. 21 and Tuesday, Dec. 1, 2020. In line with industry predictions of a 75 percent dip in bookings for November, the travel insurance and assistance company noted a similar decrease in flight itineraries for the holiday compared with 2019 during the typical six-week booking window.
For the sixth consecutive year, Mexico (pictured above) will attract more Americans for Thanksgiving than any other international destination, with Cancun, San Jose Del Cabo and Puerto Vallarta taking the top three spots. In comparison with 2019, Cancun moved up one spot while San Jose Del Cabo and Puerto Vallarta each jumped up by four places.
Allianz reported that Mexico has been a leader in tourism recovery since COVID-19 began. The country’s accessibility and safety protocols like restricted capacity at resorts to enable proper social distancing may be helping to drive demand, along with the promise of a warm-weather escape. Travelers should be aware that local restrictions may change frequently, including in Puerto Vallarta, which recently announced temporary activity restrictions.
As the summer ends and the high season nears, Puerto Vallarta and Riviera Nayarit slowly get ready for things to return to some level of normalcy. Airlines have announced new flights and some cruise ships plan to return. So far Norwegian Cruise and Carnival Cruises have said they plan to return in November. They may not be completely full, but at least they will be starting up their regular routine routes again.
From Canada, five airlines have announced they will be resuming flights to Vallarta/Nayarit from cities such as Winnipeg, Quebec, Toronto, and Vancouver. And from the U.S., American Airlines has announced a temporary flight between Vallarta and Charlotte, starting in December. Grupo Aeroportuario del Pacífico has estimated that during the first 15 days of October, about 464 flights will arrive in Puerto Vallarta, an important increase that reflects the eventual recovery of tourism for this region.
Luxury and economy-class hotels have been the hardest hit in Mexico with occupancy down 70% over last year while middle and upper middle-category hotels have seen 60% fewer guests in 2020. However, in Puerto Vallarta luxury flights continue to be high at Aerotrón, a good sign for the destination’s high-end market hotels and services.
Puerto Vallarta is leading the coronavirus recovery in terms of tourism, Mexico hotel data reports. The city enjoyed an August hotel occupancy rate of 33.9%, better than that of Los Cabos, which saw 25.8% occupancy, and the Mexican Caribbean which had a 25.4% occupancy rate. All three resort cities beat out tourism to Mexico City, Guadalajara, and Monterrey, indicating that leisure tourism is beginning to rebound whereas business travel may be slower to recover.
No doubt it will be challenging but the destination has been preparing, sticking with national health guidelines while slowly opening up bars, restaurants, and beaches, getting for what many hope will be a strong return of American and Canadian visitors.
In the United States and in Canada, Covid has not effected real estate sales. Matter of fact some markets are showing excellent numbers. But in Puerto Vallarta and Riviera Nayarit, which is very much a tourism real estate market, if tourists can’t get to the destination, it’s hard to sell them real estate.
This year started off rather well, showing sales in January and February close to past years in 2019 and 2018, down just about 10%. And that’s not bad, considering that the two previous were excellent years. But as we went into March sales started falling off significantly. Since April sales have been down about 40%, although Realtors say that it is now improving and expect somewhat of a recover in the fall. Sales volume is off as well, was down 40% compared to the two previous years.
Market conditions are good, pricing is good, what is not is air lift, the ability to get people to Vallarta in a consistent manner. Countries, and airlines, are still working through this.
Out at the end of the bay, Punta Mita is seeing spectacular numbers, the best they’ve had in years. And it is primarily being driven by the national market, upwards of 80% of sales are to Mexicans. And this is for a few reasons.
First, just like everywhere else in the world, people are tending to stay closer to home, or at least within their own country so they don’t have to deal with open or closed borders. It’s the same for Mexico. Secondly, in the past many Mexicans have enjoyed a vacation home in the U.S., but with the country tightening its immigration laws and rules, many have begun to look elsewhere, starting within their own country. And thirdly, real estate in Punta Mita, and along the coast of Riviera Nayarit and Puerto Vallarta, is sold in U.S. dollars. And with the peso losing value, buying real estate here is safe place for Mexicans to park their money, locking it in to U.S. dollars, and not lose to a devaluing peso. This is something they can’t do in the rest of the country.
That trend will mostly like continue, and American and Canadians will be back, just as soon as the world figures out how to handle the Covid virus. Right now, like everywhere else, when is completely up in the air.
For those outside of Puerto Vallarta and wondering what’s been going on in PV during the Covid-19 outbreak, here’s a short update.
First, Vallarta is quite empty and quiet. Traffic is estimated to be a third of what it usually is. The beaches and parks are closed, along with the Malecón – the beachfront boardwalk. Those over 60 years of age are restricted to staying inside while those below 60 can go out, but not without a mask and only for work or to pick up essential supplies. Those that disregard these rules could be arrested and held for up to 36 hours, although it is unsure if this is currently being enforced.
Many hotels have closed their doors and are not accepting people or reservations. Most condo projects are not accepting people if they are not the owners, so no-to-little Airbnb traffic. This has left many buildings quite empty. Almost all restaurants are closed and those that are open it is primarily to offer take out.
Supermarkets are limiting the number of people allowed into the stores and only one family member at a time. Workers have masks and cash registers are behind acrylic barriers.
Real estate brokers say they are mostly working from home, and still receiving inquiries, although a lot less. Some closings have taken place at notary offices that are still open. Most offices are using their time to work on their websites and digital advertising strategies. Traffic on MLSVallarta has been cut to about 50% of what it usually sees at this time of year.
2019 was a uniquely exceptional year in Punta Mita as it celebrated its 20th anniversary, but also their highest calendar year-to-date real estate sales revenues.
Their gross closed sales volume in 2019 was just over USD$170M, showing a 49% increase over 2018 (USD $114M), and a 79% increase over 2017 (USD $95M).
Americans made up for 60% of total sales, Mexicans for 30% while Canadians made up the difference with 10%.
Punta Mita projects that if the market see “more of the same” from the world and USA economy; if the billions of USD investments recently seen continue to materialize within Riviera Nayarit; if the Four Seasons and St. Regis Resorts continue their exceptional REVPAR results, and since sales numbers show that oversupply is not an issue for them, Punta Mita should continue to be a leader in the luxury real estate development market in the Americas.
Punta Mita announced recently the release of a new community of estate homesites called Las Vistas Estates situated on the hillside behind the main sales office, which offer panoramic views Punta Mita and the surrounding ocean. To learn more about Punta Mita visit realestate.puntamita.com.
It is that time again for the annual Vallarta Real Estate Fair, that’s been put on for a number of years now, thanks to Timothy Real Estate Group.
The Vallarta Real Estate Fair was created in response to the questions that clients and local residents had about recent changes in immigration laws, tax laws, legal and lifestyle issues that affect buyers, sellers and residents of Puerto Vallarta.
“Thinking that it would be best if our clients had the opportunity to ask questions directly to the local real estate-related service providers, we created the Vallarta Real estate Fair”, says Carl Timothy of the Timothy Real Estate Grup. “Getting correct answers to the important questions can help everyone make the best of their international living experience.”
The Vallarta Real Estate Fair has grown to include mortgage brokers, attorneys, title companies, interior designers, property managers, rental agents, and even health care professionals to help answer all of your questions about maximizing your real estate investment in Puerto Vallarta and getting the most out of the Vallarta lifestyle.
Speakers this year include Brock Squire of Coldwell Banker, Terence Reilly of Mortgages in Mexico, Paulo Rojo, speaking on architectural styles, Jessica Reidesser on Closing Costs. No matter how much you think you know about the local market, you’ll be sure to learn something new at this important event.
Admittance is FREE so don’t miss this opportunity to get valuable information about the important issues that affect you as a national or foreign resident of our city. The 2020 Vallarta Real Estate Fair will be held on Saturday, February 15th, 2020 at Rivera Molino Plaza on the corner of Aquiles Serdan and Ignacio L. Vallarta in the Romantic Zone.
Vallarta/Nayarit Real Estate Markets Still on Fire
2018 was a record year in real estate for the Vallarta/Nayarit region, bettering 2017 by 30% in gross volume of sales. And although the market slowed down somewhat 2019, it still showed an impressive increase over 2018 by 13%, reaching US$400 million. What made up for this increase? Well, it wasn’t in the number of sales as agencies sold just as many properties this year as they did in 2018. It was because property prices increased substantially over previous years. And the difference between asking and selling price continues to tighten. It was 10.5% in 2017, 8% in 2018 and 7.5% last year.
These numbers are provided by MLSVallarta and Riviera Partners Realty who provided the numbers for the MLS system of the local real estate association, (AMPI), which together provide a reasonable assessment of the local real estate market. “Reasonable” as it doesn’t include all sales – a few of real estate developments are not members of either service and therefore their sales are not included. And it seems the farther you get away from the center of Puerto Vallarta, further up the coast of Nayarit, the less sales are reported. That said, it is commendable that certainly most sales are now reported and this is in thanks primarily to the efforts of the local real estate associations and their members (AMPI).
The market continues to be driven by American buyers (40%) although the number of national buyers has increased over they years (30%) with Canadians primarily making up the remaining 20%. A couple of reasons for the increase in national buyers is the increasing difficulty obtaining visas into the United States for Mexicans, but also because real estate in Puerto Vallarta is priced in US dollars and therefore becomes an interesting way to hedge the peso against the dollar, especially in recent years where the peso has been losing value to the US dollar.
Condominium Sales
The average condominium sales price increased in 2019 by 13%, from $282,000 in 2018 to $320,000 in 2019. The average size of a sold condominium increased slightly over 2018, from 1,415 f2 to 1,552 f2, remaining pretty much within the range it has been, on average, for more than twenty years. After the 2007 market crash, developers begin building smaller units in order to lower prices and reducing size was an easy way to do that. But they are now back up to their historical average.
For the first time in quite some time, the number of condominiums sold decreased compared to the previous year. 7% fewer condominiums were sold in 2019 than in 2018. This was made up for, however by an increase in the number of homes sold.
We went back and looked at the average sales price and size of condominiums in 2007, at the top of the market, and found that condos were selling substantially higher with an average sales price of $401,000 and an average size of 2,000 f2. But the market back then was driven by new construction and developers were building for buyers that had money to spend to get something special with extra amenities and that were larger in size. It’s probably a good sign that the current market isn’t back to those numbers.
We also took a look at what kind of condominiums were being sold, how many bedrooms they had. Historically, the two-bedroom condo has made up about half the market. It’s the same today as it was back in 2007, and the same for units with three or more bedrooms, which make up about 20% of the market. The remaining 30% was then and is today, made up of studios and one-bedroom units. But back in 2007 less than 1% of sales were studio units, compared to nearly 6% of sales in 2019. People are willing to take less to keep the price down and developers have accommodated by removing the bedroom.
Home Sales
Homes sales surged last year, increasing by more than 20% over the previous year. In 2018 the average sales price was just under $400,000 whereas in 2019 it dropped to $370,000, and for an interesting reason. The MLS systems saw an increase in the number of moderately priced townhouses coming on the market in neighborhoods not traditionally viewed as popular. One area is around the airport, which in 2007 saw no sales at all, only 4 in 2018, but over 50 in 2019. These semi-detached homes sold on average for around $100,000 and this drove down the average home sales price. If we remove these sales we find that the average home actually increased substantially in price to $425,000. These properties were primarily purchased by locals, and we are most likely going to see this trend continue as more and more local sales are reported in the MLS systems, systems that have traditionally catered more to the tourism market.
Most Popular Regions
It is interesting to watch as certain regions become more popular over others over time. Back in 2007, again, at the top of the market, developers were busy building high-rises in the Hotel Zone, which accounted for almost 40% of all sales that year. Next in popularity came Marina Vallarta and Nuevo Vallarta whereas downtown Vallarta accounted for less than 6% of total sales. In 2018, however, the Romantic Zone alone, or the region south of the Rio Cuale to Amapas, accounted for 30% of all sales. In 2019 that dropped to 23%. The difference was mostly made up in a return to an interest in Marina Vallarta where a number of new projects are currently under development. The most popular region for 2019 was once again the Romantic Zone, followed by the Hotel Zone, Nuevo Vallarta, the South Shore and then Marina Vallarta.
An integral part of any real estate market is ensuring there is a healthy, successful real estate association that can provide guidance, education, and, when needed, policing of the association’s rules and regulations. This is most true in Mexico, where there is no licensing for real estate agents, and often the association is therefore looked upon to educate its members and punish those who may not be following the rules. The only way this is possible is if agents themselves dedicate their own time and energy by serving on the local real estate board.
In Puerto Vallarta, there have been many who have done so and have done a good job of it. But no one has done as much, dedicated as much, as Silvia Elias of PV Realty. For many years she served on the local real estate board as President, but from there she went on to serve as the region’s representative for AMPI (Mexico’s real estate association) nationally, and then further on still to serve as Mexico’s FIABCI (Worldwide real estate association) President, which she’s held since 2017. She also serves on FIABCI’s Worldwide board as the Membership Committee President.
Recently in Mexico City, Silvia chaired FIABCI Mexico’s board meeting that welcomed the World President of FIABCI, Mr. Walid Moussa of Lebanon, to Mexico. During his visit, he attended the inauguration of the annual Assembly and Board of Directors of AMPI-Mexico City and AMPI Nacional respectively. During Mr. Moussa’s visit, he also had the opportunity to meet with Mr. Carlos Slim Helú, who received the honor of becoming a FIABCI Distinguished Honorary Partner.
Pictured above are Silvia Elias with Walid Moussa, Carlos Slim Helú and board members.
