Demand: There is supply and buyers willing and able to purchase the inventory. Opportunity.
Rarity: When there is a limited supply property in particular locations and more buyers want this type, there may still be more demand. Missed sales if the inventory is sold out.
Condition: Affects the demand. If there is a lot of work needed for the property to be in demand, the price needs to be low enough to enable the buyer to pay for repairs and not be paying over the market price. No sale if price is not right.
Transferability: Refers to the ability of the property to be legally transferred. Due diligence is necessary. There is no sale if the property cannot be transferable.
Characteristics of Real Estate Markets
- Anticipation: Real estate value is based on its future and continuing value.
- Balance: Property attains maximum value when the supply and demand are more in sync.
- Developers, sellers, and agents bring the product to market using land, labor, capital, and vision.
- Change: Value is influenced by variations both inside and outside of the market.
- Competition: Efforts of agents to develop, offer, or obtain real estate give consumers opportunities to shop value and price. Competition among properties can capture consumer attention. Property worth is impacted by both types of competition: sales and marketing and the property itself.
- Conformity: Value increases with demand for certain amenities in the same category or location.
- Contribution: When you purchase, you want the property to increase in value or at least hold its value.
- Externalities: The value of real estate is impacted by exterior conditions such as the economic, social, political, and environmental.
- Substitution: A property’s value cannot be greater than the sale price of those with similar features and utility.
- Supply and demand: When supply is high, and demand is low, the price of real estate is low; conversely, when supply is low and demand is high, the price is high.
Second Home Market Demand and Supply
in Banderas Bay Including Jalisco and Nayarit States
- Prices most often in US dollars because of the quantity of foreign buyers.
- Most sales are condominiums, resale and pre-construction.
- Condominiums with an average price in the $300,000´s is the most popular being sold.
- Home prices have increased, and are on average in the 300,000 USD range, as well.
- Very little multi-family is being built and sold. These would be multi units owned by one owner and imply they are rentals.
- 2020 is the best year since 2009 for reporting sales prices and number of solds.
- Hard to say if increased prices are equity which sellers have acquired, or the higher sales price developers are able to get in high demand areas such as Zona Romantica in Vallarta, Zona Dorada in Bucerias, Francisco Villas West, and Punta Mita.
- Factors affecting demand in foreign second home markets:
- Security versus crime
- Health care
- Infrastructure and services
- Entertainment and restaurants
- Behavior of locals to foreigners
- Corruption in local government
Puerto Vallarta Real Estate Blog published every week –
read it here: http://casasandvillas.com/blog/
and in the PV Mirror:
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This article is based upon Flex MLS reporting, 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 own due diligence and review. If you have any other questions, contact me through my website.Harriet Murray