The Puerto Vallarta Real Estate market reflects continued growth in the first half of 2015.
The focus of this study is from 2013 through the first 5 months of 2015. For comparative purposes we first review the overall Puerto Vallarta Real Estate market for condominiums and homes at all price points. We then separate two distinct market sizes of those below $500,000 USD from those above this benchmark.
The source of the data incorporated into this study is from Flex MLS, the multiple listing system for the local Vallarta Riviera Nayarit chapter of AMPI (Asociacion Mexicana de Profesionales Inmobiliarios) or the national Mexican professional real estate association.
It is important to note that not all real estate sales in Mexico are disclosed, particularly new development sales, however, the data represents the most comprehensive information available for the Puerto Vallarta real estate market which includes all of Banderas Bay and Riviera Nayarit (from Mismaloya in the south bay to San Pancho just outside the north bay.)
The total number of units sold in the Puerto Vallarta real estate market in the last complete calendar year of 2014 was 372, up from 259 the prior year and representing a 43% increase. For the first 5 months of 2015 the total number of units sold were 190 compared to 149 for the comparable period prior year, or a 28% increase.
Notably, total active listings (which are taken as a point in time) increased from 1,239 in December 2013 to 1,480 in December 2014 but has remained rather level as of May 2015 at 1,489.
Sales as a percentage of active listings increased from 21% to 25% from 2013 to 2014.
Annualizing the total units sold for the 5 month period of 2015 would suggest 456 total units. Assuming the active number of listings remains roughly the same, this would suggest an absorption of 30.6% or roughly 3 years of unit inventory.
Active Sold and New Listing Inventory, All Condos and Homes at All Price points
Source: Flex MLS
As indicated in the graph above, active listings increased from about 1,000 units in January 2013 to a peak of approximately 1,600 in March 2015. Inventory peaked in January of 2014 at a rate of nearly 130 months which is simply a reflection of relatively few transactions in that particular month. The main points to be gleaned from this graph are 1) confirmation that months inventory, while up and down, tended to average around 3 years since 2013 and 2) new listings and total active listings have increased which is to be expected in an improving market.
From a total dollar sales point of view, there was a 44.3% increase in volume at list price from $105M total sales to $150M. For the 5 months period 2014 to 2015 total sales volume grew from $65M to $79M for a 22% increase. While sales in the Puerto Vallarta real estate market are seasonal, an annualized rate would suggest nearly $190M of total sales volume at list price or 26% if the dollar total of listings remains constant.
It is also important to differentiate the difference in list price versus actual contract values. As the chart above indicates, average discounts have ranged from 10% to 13% since the beginning of 2013.
Next we will review statistics segmenting condos OVER $500K versus UNDER $500K.
Sales OVER $500K
Segmenting the market for sales Over $500,000 price demonstrates $67M of sales in 2014 of a total list volume of $77M reflecting an average discount of 13% from list price. Sales increased from $51M in 2013 up 29% year over year ended 2014. Unit sales increased form 52 to 69 year ended 2014.
And unit sales for the comparable 5 month period ended May 2015 showed an increase from 30 to 37 or a 23% increase in unit sold with a sales volume increasing from $31.6 million to $33.6.
Partitioning the market above this half-million price point demonstrates an average selling price close to the $1M range in 2013 and 2014 with a decrease in average sales price to $900K in the most recent 5 month period ended May, 2015.
Sales OVER $500K by month
Source: Flex MLS
Per the graph above, the average sales price of units OVER $500K fluctuates dramatically month to month due to the relaively low number of sales.
Sales UNDER $500K
Total dollar volume UNDER $500K was $67M. Unit sales UNDER $500K increased 46% from 207 to 303 in 2014 and are continuing a good trend into the first 5 months of 2015 with 153 units sold year to date as of May versus 119 for the comparable prior period.
The Average selling price for this part of the market has increased from $200,000 to the $230,000 range over the last 18 months, demonstrating a healthy increase in price. Average discounts were between 8% and 10%.
Sales UNDER $500K by month
Source: Flex MLS
As can be noted from the graph above, sale volume by month is clearly seasonal, but the average selling price is trending higher.
Finally, with respect to comparison of the UNDER versus OVER 500K segments, units volume is obviously multiples higher in the UNDER segment, but perhaps the most recognizable comparative point is that the average selling price has increased UNDER $500K, but declined OVER $500K.
One clear interpretation is that there are fewer buyers in the higher end of the market. And in the continuation of a buyers market, there remains more selling pressure in offering a compelling value.
An overall conclusion is that calendar year 2014 rebounded substantially from 2013 not only in volume of units, but in total sales volume, volume as a percentage of total listings and in the important category of average selling price as well. And this positive momentum continued in the first 5 months of 2015, particularly with respect to the annualized rate.
Obviously, these are broad based conclusions on a general overview of the market, but the positive trend and solid base suggests the Puerto Vallarta real estate market should experience sustainable growth going forward.
In future articles we will examine the price per square meter in specific locales around Banderas Bay, beginning with Punta Mita, the most luxurious master planned development in the region.