We began our 2001 real estate trends article with “The past season proved to be sporadic, with periods of high demand matched by periods to little activity.” Well, that certainly hasn’t been the case this year. The most common complaint heard from realtors is how little time they have; they are always running. I don’t think at that time we could imagine how much the marketplace would change in such a short period of time. Today, real estate in Vallarta is very different than it was five years ago. In most cases, the real estate options available are different, the players are different and the “hot” regions are different.
Consider this: Five years ago there was one publication dedicated to real estate. Today, there are four, and I’m sure a few more are in the works.
The gross sales of the MLS system has doubled over the last five years, and as of April this year it had already reached 75% of last year’s total sales.
There were 22 real estate offices that were part of the MLS, while today there are 40.
There were no new condominium projects available in Marina Vallarta; today there are three major projects with close to 500 condos under construction. Two new developments, Punta Mita and Real del Mar, as of May this year had sold nearly as much in gross volume as the total MLS system did last year, and the MLS is having a record year so far. (Real estate developments are not part of the MLS system.)
No doubt about it, the real estate market in Puerto Vallarta is hot. Here are some of the trends driving this growth.
For the most part, the south shore of the bay is either rather inaccessible, difficult to build upon because of the steep terrain or has already been developed. It was inevitable that growth would move north, across the border into the state of Nayarit. The widening of the highway from the airport to the Punta de Mita turn-off gave access to this region and cut travel time dramatically; its now a 40-minute drive to Punta Mita or Sayulita.
Plans have been announced to straighten out the highway from La Cruz to Punta de Mita, which would certainly improve the real estate situated north of Real del Mar to Estiladeras. At present, this windy highway limits what could be developed on this beautiful coastline. As well, the gravel road that links Punta Mita to Sayulita, following the coast north, will also most likely be paved with the announcement of the new FONATUR development. (More on that shortly.)
Luxury homes prior to 2000 were primarily built along the south shore of the bay by small-time developers doing a couple of houses a year. Most were built in Conchas Chinas and Sierra del Mar, with others situated in between the coast highway and the coastline heading south of Vallarta.
Today, that’s no longer the case. Most of the luxury market is now focused on the north shore (where beachfront is still available) and inside large, planned residential communities. The most successful of these has been Punta Mita.
Punta Mita: The MLS office has been visited quite frequently this past year by real estate consultants and professionals, looking for statistical information for potential new developments in the area. Many stress that Punta Mita is establishing new standards for what an international real estate tourism development should look and feel like.
When complete, Punta Mita will have three golf courses (two by Jack Nicklaus), five boutique hotels (presently the Four Seasons, Rosewood’s La Solana and talks continue of St. Regis coming soon). Just this fact is amazing; where do you find brand hotels such as these located in the same development and in such close proximity? Punta Mita nearly single-handedly is responsible for Aerotron’s (the private hangar at the airport) business tripling in the past five years and why they are in the midst of tripling their tarmac space.
The location is incredibly unique, situated on the northerly point of the bay on a peninsula that looks more like a partially inflated balloon; narrow at the entrance and then thrusting out towards the Marietas Islands. Add to this the small mountain/hill situated on the northerly side of the property, giving it height for non-oceanfront property, and you have developable property that always has an ocean view.
Word outside of Mexico in the luxury real estate market is that Punta Mita is “hot,” and it shows with sales surpassing last year’s sales in the first quarter of this year.
Punta Mita’s success is good for the whole market. The exposure they receive will certainly help the destination and other real estate projects. Also, not everyone can afford their prices.
Real del Mar: The next success story is Real del Mar, which at this point is nearly sold out. The development has a wonderful southerly exposure and the layout of the land, with its hillsides and valleys, delivers excellent views from every home site. Real del Mar has nearly equaled Punta Mita in first quarter sales and has far surpassed what they did for the whole of last year. This has allowed them to begin focusing on their newest development: Punta Esmeralda situated between Bucerias and La Cruz. The concept of townhouses and condominiums with excellent view and affordable pricing entry points leads one to assume this project will be just as successful.
Paradise Village has become one: With the addition of a golf course and expanded marina, Paradise Village has become a planned community inside a larger development: Nuevo Vallarta. With its rich mix of real estate options, it truly offers, better than any development, “something for everyone.”
Flamingos Club Residencial: Situated off the coast, just off the highway before Bucerias, Flamingos offers a product and price point that is attractive to the marketplace, primarily for people from Guadalajara or the Bajío that want a second home near the beach.
Costa Banderas in progress: This development, situated next to Punta Mita, has been slower to take off, but Costa Banderas holds some of the best oceanfront left in the bay for development, so it’s just a matter of time. At present there are a number of smaller developments that offer oceanfront lots and homes and a soon-to-announced condominium project at the Los Veneros beach club.
Marina Vallarta: Originally developed by Grupo Situr, Marina Vallarta is still one of the finest marinas in Latin America, which pioneered the concept of mega developments in Mexico. Today it is still offering new real estate in large condominium projects along the beach.
FONATUR: Future major developments will take place outside of Banderas Bay, heading up the Narayit coast. FONATUR, the real estate development division of the Mexican tourism department, has three new projects planned here, with the first starting in late 2004 (at least that’s what the brochure states), just north of Punta Mita in Litibú. When complete, it will feature an 18-hole golf course, six hotel sites, as well as condominium and residential home sites.
The shoreline just south of Puerto Vallarta is the more “traditional” real estate market, with smaller residential developments such as Conchas Chinas, Sierra del Mar, Mismaloya and, most recently, Sierra de Vallarta, Castillos del Mar, San Xoaquin and El Paredón. They offer, in most cases, hillside homes sites or homes, except in the case of El Paredón, which is on the beach. There are also a number of small condominium projects in this area that have been quite successful, most situated in Las Amapas just above town and before Conchas Chinas. The niche for these properties is their excellent views because of the height offered from the mountain hillside and close proximity to downtown Puerto Vallarta.
Golf has become big in Puerto Vallarta in an extremely short period of time. Five years ago, the area had two golf courses; today, there are seven. Last year, Vallarta sold more rounds of golf than Los Cabos, which up to this time has been seen as the golf destination of Mexico. Not anymore. Golf will continue to play a major role in real estate development and in marketing the destination.
Prior to 2000 there were very few 10-story-plus condominium projects in Vallarta. That changed with the 500-plus Bay View Grand in Marina Vallarta, which sold out very quickly. The developer of this project has followed with Porto Fino and a new, even higher project at 16 floors, Shangri-La, is going up next to the Marriott. Look for another project soon next to the Holiday Inn and most likely at the entrance to the marina (by water) on the Punta Peninsula site.
There are now many more properties listed over one million USD than there were five years ago, with the majority of these properties situated on the beach or with spectacular hillside views. And they have been the properties to see the most appreciation over the past five years. However, this hasn’t actually meant that it’s becoming impossible to purchase a home in Vallarta; you just won’t find one on the beach if you are looking for something under $200,000 USD. But there are homes available for these prices; you just have to look a little farther inland or without the view.
For the most part, 9/11 did not have a significant effect on the Vallarta real estate market. Sales did slow down somewhat in 2002, but they were back in 2003 and going extremely strong so far this year. If anything, 9/11 has helped the marketplace. Many Americans, after this attack and the recovery of the stock market, have reevaluated their lifestyles and made the decision to have a second home, perhaps outside of the USA, but still close enough so they can return if they need to. And in the case of Mexico, they can drive home if they have to, not so with Hawaii or the Caribbean, two competitive real estate markets.
That $150,000 price-point condo you want is no longer on the beach; however, it is available in town, perhaps without a view, but still close to many amenities. Reasonably priced homes are still available, but again, not on the ocean and perhaps not with a view, but close to town. Oceanfront, however, has gone through the roof and there’s no end in sight as it is still less expensive than comparative properties in Hawaii or Los Cabos.
Vallarta has certainly grown, but that growth has brought in more and better services, a variety of real estate and lifestyle options and great restaurants.
If you preferred the quaint village that PV once was, there’s still Sayulita, San Pancho and Lo de Marcos to the north. However, if you want an extremely stylish modern condominium unit with the latest accessories, that is now available as well.
And the downtown, although certainly not without its problems, is still the prettiest central area of any coastal community in Mexico. The addition of the new pedestrian bridge of the Cuale was a wonderful addition to the waterfront Malecon.
Our prediction for the next five years is that mortgages will finally become available in Mexico, with attractive interest rates. This should really change the marketplace, especially when you consider that up to this point most sales have been primarily cash driven.
Real estate growth will continue to be very strong, with development continuing to focus on the coast north of Puerto Vallarta, beginning to move outside of the bay toward Sayulita, San Pancho and as far north as Platanitos.
And fractional ownership, which was on our list three years ago as an up-and-coming trend, we have yet to see become popular. But it will. There are a number of developments that are presently in the planning stages with fractional as part of their product line. And most, it seems, will be looking for expertise north of the border to operate these programs, with companies in resort towns that have proven it can be done successfully.
Require more information on Vallarta real estate or want to be kept up-to-date? Check out the following Web sites and publications.
www.mlsvallarta.com Vallarta’s MLS service online.
www.vallartarealestateguide.com A graphically driven Web site that makes it very easy to understand what options and variety of real estate are available around the bay.
www.virtualvallarta.com Excellent information source about Puerto Vallarta.
Vallarta Real Estate Guide: Published monthly, the Guide contains property listings for the MLS, a map showing the locations of real estate developments and articles on buying real estate.
Vallarta Lifestyles: Published quarterly, along with having an extensive real estate section, “Lifestyles” offers information on what to see and do while in Puerto Vallarta.
Vallarta Style: This new annual publication focuses on what is new, stylish and trendy in Puerto Vallarta.