Q: I have been searching for a place here for a few years. I just found a great option; it has an ocean view, a big kitchen (I love to cook), nice terrace, elevator, second bedroom and allows pets! I would really like to buy it now, but my friend thinks I should wait for the price to go down. What should I do? Kim J. Toronto
A: Great question! After giving this careful consideration, I have come up with a magic formula that will tell you the exact time to buy, right down to the day!
There are clearly some good buying opportunities right now. Last year’s global economic crisis, large inventory of available properties, and security concerns, brought fear and uncertainty in the marketplace. Nobody wanted to be the one who “overpaid” for their home in paradise. My experience is that sale prices here in general have fallen approximately 25 percent.
We are seeing a lot of buyers return to the market, and Canadian buyers are out in force based on the strength of their Dollar.
February and March were very busy months. Fortunately, many sellers are still willing to negotiate in order to make a sale.
There are some factors unique to our area that has helped stabilize prices:
1. The vast majority of sellers do not have a mortgage on their property. Hence, they are not under tremendous pressure to make a mortgage payment. Many owners are retirees, already have their “nest egg” and are not concerned about an imminent job loss.
2. In the last couple of years mortgages have become readily available for new buyers. This increases their buying power and greatly increases the amount of potential home buyers.
3. The “baby boomer” generation is reaching retirement age and even with this current economic downturn, is the wealthiest generation ever.
4. Our area is still seen as an inexpensive haven in comparison to many other world class vacation and retirement destinations.
So that may be a bit of bad news for you now, but it will be good news when you are ready to sell. From your letter, it looks like you have several important criteria that you are looking for in your property.
If you were willing to settle for just any generic condominium, you could probably wait to see what happens, as I do not expect the market to turn around overnight.
However, if the property you are looking for must have several unique features, you should give serious consideration to purchasing if you find just what you are looking for.
I can tell you from experience that, there are active buyers looking in the market right now, (we had a multiple offer scenario last month) and your “dream home” could certainly be purchased by someone else.
Well, enough of this.
Let’s get down to the reason you have read this far, the “magic formula”. It is really quite simple; the exact day you should buy your dream home down here is: the day you decide to quit worrying about what everybody else thinks, (myself included) and invest here with a time horizon of at least the next 5 years!
Anything else will just lead to “analysis paralysis” and frankly, you are just better off renting.
The time to buy is when YOU decide the time is right.
So make your decision, and when the time is right, go out there and make the best deal you possibly can, quit stressing out about it, and enjoy your new home in the sun!
Do you have a question about Real Estate in Puerto Vallarta?
Just ask!
Active in local and national Real Estate boards; published author and acknowledged expert on Puerto Vallarta Real Estate, Michael Green moved here in 1997 to take advantage of the unsurpassed lifestyle PV offers. Mike can be reached at: pvgetaways@hotmail.com
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