We are in a stand-still now, waiting to end the lock-down in Puerto Vallarta after the virus health issues are resolved or stabilized. The Mexican federal and state governments are enforcing certain restrictions, such as staying at home for all who do not have critical businesses.
According to Mexico News Daily, Puerto Vallarta is the only city in the state of Jalisco to have recorded coronavirus infections among medical personnel. There are now 21 cases, the third highest in the state and nine are among health professionals. Three Covid-19 deaths have been recorded so far in Puerto Vallarta.
Mexico is not the only country with the problem, so this is very different from how our market in Mexico was affected during the U.S. housing crisis of 2008. In the aftermath of that crisis, we had little demand for five years, and began to recover when new construction started, which attracted a different demographic from our prior client base.
We have been enjoying new construction sales to a large degree, and have remained on the top list of the best beach resorts in the world, as well as remaining high on all lists for top places to retire.
We have, for the most part, cash sales rather than leverage sales with mortgages on properties in the Bay of Banderas area. Sellers do not have to worry as much about having to make large payments to keep their property. The cost of maintaining properties is low, with expenses paid for with Mexican pesos. U.S. dollars and Canadian dollars go much further now than even six months ago. The current exchange rate is about 24 pesos to the U.S. dollar.
With this major worldwide economic downturn affecting Mexico, we know our real estate market is a buyers’ market, but we also know that:
- Puerto Vallarta and the Bay of Banderas has a superior tropical location in North America.
- We have the ability to offer resales and new construction, since many of the developers are sending us messages that they will continue their projects.
- We do not have overleveraged purchases. And it may be possible for some owners to re-negotiate their mortgages for a period of time.
These times are difficult and will no doubt continue to be a challenge for the foreseeable future. Now, more than ever, the real estate industry in Puerto Vallarta and the Bay of Banderas will remain sensitive to the health and economic issues every country, state, area and individual owners face in this crisis.
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 conduct his/her own due diligence and review.