Several weeks ago an article on the Internet describing appreciated home values in the upscale Conchas Chinas area was circulated to many local owners and residents. The article is a good example of hype versus truth in the Puerto Vallarta real estate market.
It’s true that 2017 has been to this point the best year for overall sales volume since the 2008 mortgage defaults and housing crisis in the U.S. But let’s separate some of the hype from actual truth in the Puerto Vallarta real estate market.
HYPE: The Puerto Vallarta market has appreciated 25 percent and Conchas Chinas, in particular, commands the highest sales price in the Bay of Banderas. These statements came from an international real estate company franchise in Guadalajara.
TRUTH: Condo values in Puerto Vallarta increased 2 percent over the same time in 2016, January-August. This means the average sales price of condos and homes increased to US$289,923.
New condos are leading the market and more pre-construction developments are being planned. Resale condos have stiff competition from the new in-town condo projects.
The average home price from all areas reporting increased by 12 percent to US$377,168 and the average condo price of US$264,884 is the same as last year.
HYPE: Beachfront homes in lower Conchas Chinas command the highest prices in Puerto Vallarta.
TRUTH: The highest priced homes sold in the Bay of Banderas area were in Punta Mita and Nayarit. The highest condo prices were in Destiladeras, Nayarit.
HYPE: Homes in Conchas Chinas start at US$6 million and rise to US$20 million. Apartments cost between US$500,000 and US$2million.
TRUTH: The active price range of homes in upper and lower Conchas Chinas is US$747,000 – US$3,600,000. The active price range of Conchas Chinas condos is US$155,000 – US$2,498,000.
If 2017 continues to be robust, we will have a benchmark year. Puerto Vallarta is becoming a destination for many young buyers who are looking for work mobility and want a condo to use for a few months each year and rent it out for the rest of the year.
Large homes south and north of Puerto Vallarta are still being sold, but the number is less than before the global housing crisis. There is the potential for large homes in very desirable locations to be remodeled, or torn down for luxury condos or town homes.
A case in point is a large home in upper Conchas Chinas that is being remodeled to add more bedrooms so it can become a luxury B&B. This new offering in the rental market has an incomparable view of the bay, is located in a quieter residential area and is five minutes by car from downtown PV.
Data used in this blog is from the Flex MLS database of the three AMPI chapters: Nayarit, Compostela and Puerto Vallarta.
This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his/her own due diligence and review.