Monday, December 10, 2007


Continued Market Softness

In the real estate business there is a a very predictable statement that occurs in a falling market. Real estate agents will use that statement when asked whether a market is in decline. That statement is "sales are slow right now, compared to last year, but last year was record." This statement is considered the equivalent of the "we have confidence in [insert coach's name]" statement which precludes the firing of said coach in two weeks.

Costa Vallarta has just published its real estate trends for 2007/8. On the subject of a real estate turndown, Costa Vallarta published the following statement, "when asked if the market has slowed down, most realtors expressed that it is slower than last year, but that last year was exceptional."

We have additional information Puerto Vallarta real estate projects.

Quinta del Mar, which was pre-selling 2-bedroom units in the Fall of 2006 for $330,000 increased prices later that year to $385,000. Those prices have now been rolled back to $330,000.

Pacifica condominiums in La Cruz, just north of Puerto Vallarta have reduced the entry level prices of units from $199,000 to $185,000

Worldstar Realty is advertising condos at ICON Vallarta from $240,000. That is $60,000 less than the $300,000 that ICON advised me in October would be the introduction price for Phase 2.

Villas Colina II have been repriced down again to the mid $300s, from $385,000.

Villa Estancia has closed their central Puerto Vallarta sales office, and will market only from their Nuevo Vallarta site. It does not appear that the central office closed a sale in the year it was open.

Developers have now accepted that, with the heavy season while underway, but sales continuing to fall, they must adjust their marketing, including promotion and pricing. The developers who have niche projects, with unique selling positions, will be able to last out the longest.