Market in Decline

Puerto Vallarta Speculative Boom Peaked in January, 2007

Using methodologies similar to the S&P/Case-Shiller® Home Price Indice published in the United States, HSC Financial is reporting that the Puerto Vallarta real estate market for recreational properties is officially in decline.

Prices are off by 5-20% since peaking in January, 2007, depending on location.

A number of projects have been pulled from the market including Monte Verde. Sales at major projects, such as Penninsula Tower III, have stalled. At least 3 years of supply of product is presently available.

The Puerto Vallarta market is following a very similar trend that we reviewed in Hong Kong SAR (1997-2003), Toronto, Canada (1989-1996) and Mont Tremblant, Quebec (1999-2007).

The absence of disclosure by developers and other stakeholders in Mexico make it very difficult to assess the potential downside in Puerto Vallarta presently nor the possible length of the decline.