Slow Start to New Season

The new real estate year in Puerto Vallarta has now started and it has started slowly.



A number of projects have either been cancelled outright or are proceeding at a much slower pace than originally anticipated.



American buyers have not returned to the market. And with prices down near 30% in traditional US vacation/investment destinations, Americans with money are getting much better value in their domestic market.



The 2007/2008 season was the year of the Canadians, as the Canadian dollar hit par and better with the US dollar. With the Canadian dollar having dropped to 85 cents US, the Canadian buyer has effectively disappeared.



Puerto Vallarta and Riviera Nayarit are definitely buyers markets presently.

Prices peaked in the Vallarta market area in February 2007 and proceeded to drop 5-20% over the next year. There has been a decline in price since then, but it has been moderate and mostly with re-sale condos in the $300M - $650M range. For instance Horizon 503 is listed at $499,500, the first Horizon product we have seen listed for below $500M. Typically, that product would sell for about 95% of list or about $475M. That product peaked in price at around $620 - $650M.

New developer-based product is difficult to price since developers are generally not reducing their advertised list prices and are, instead, applying deep discounts or sweetners to offers. For instance, one Riviera Nayarit development has not changed its advertised price, but is offering as much as a 23% discount against the published purchase price based on financing options selected.

Disclosure by developers continues to be a problem. ICON Vallarta, for instance, has not updated its published prices and inventory since August of 2007. ICON, you may recall, claimed it sold out Tower 1 in a just days back in the spring of 2007, and that the sell-out of Tower 2 was imminent. Well, here we are some 18 months later, and there is plenty of Tower 2 product available. Tower 3 is probably light-years away.