The change in the real estate market in Banderas Bay is palpable. From lamenting the loss of ‘authenticity’ in Old Town on Facebook forums to the hushed conversations of how much their neighbors place really sold for at cocktail parties, everyone is talking about the real estate market.
In a recent, very informal survey, the Vallarta Tribune asked buyers of homes throughout Banderas Bay to answer a few questions. The take-away from their responses was for anyone thinking of buying to not only take their time but to understand that the process itself takes time. While aspects of buying real estate in Banderas Bay are similar to purchasing north of the border, there are some marked differences including using a bank trust or Fideiocomiso and use of a notario publico. (See the Ask a Realtor section for more details on these two processes.)
One reader wrote when asked, “What is the one thing they’d share with prospective buyers?” responded with “Patience! Expect the unexpected. The process and timing of purchasing real estate in Mexico are not the same as in the US. Not inherently better or worse, just different! Be prepared to pay a greater percentage of closing costs as a buyer.”
Of the responses received 66.7% had purchased in the last year, 20% in the past two years. 60% bought condos, 20% purchases villas and 20% purchased townhomes, most with a budget of USD 300,000 or under (73.3%) but 20% had budgets over $500,000. Important to note here is that closing fees are nearly entirely borne by the buyer in Mexico and are roughly 8-10% of the property value whereas in Canada that amount is on average 1-2.5% and in the US closer to 2-5%.
For those that downsize into a condo, you need to weight the benefits and challenges. Security and less maintenance are cited as benefits, but you also give up a few freedoms when you become beholden to your condo association. “If you’re considering a condo after having owned your own house, think long and hard about how much privacy and control you are willing to give up for ease of maintenance… There are days when we still wonder if we made the right decision, but our wonderful neighbors usually convince us that we did.”
When asked, “Where did you buy your property?” the responses went from Amapas to La Cruz. 33% of respondents said they bought in Bucerias. This community is increasing. Where before there were limited condo towers and mostly long established family estates, these sizeable oceanfront land parcels have been bought up and are now undergoing rapid development. It’s understandable; it’s the best beach in the bay and a sweet little town. Hopefully, it stays that way.
A close second was Old Town (20%), with its massive influx of new condos at a variety of price points, and proximity to all that Old Town offers including year-round entertainment, restaurants, and shops. From a vacation rental standpoint, Old Town makes considerable sense for investors as much as year-round residents.
When weighing all the options, sometimes choosing to be out of the hustle and bustle is the best option and the Cinco de Diciembre neighborhood is popular for just that reason, plus put yourself on the hillside, and you’ll have endless sunset views. Says one respondent, “We wanted to be relatively close to Centro and the Malecon but to be in a more traditional Mexican neighborhood… Having a view of the bay was important, and five de Diciembre’s elevation provided that.”
Perhaps most interesting is how respondents viewed the ‘state of the market.’ When asked if they felt it was a buyers market and the seller was eager and flexible to sell, 40% responded with a no, and 40% responded with a yes. I suspect barring any major market downshifts the answers to this question are going to become more skewed.
Ultimately what is most important is working with a team that has your best interests at heart and that you do not feel pressured to buy something – anything. Trust your gut and work with people that are professional in all that they do – from timely responses to transparent negotiations.
To see the survey, click here.