The Puerto Vallarta/Riviera Nayarit region reported gross sales volume of $141 million for the first quarter of 2023, just slightly above the fourth quarter of '22, but still more than 30% below the all-time high reached in the second quarter of last year with $205 million in sales. That increase in sales, though, was most likely the result of pent-up demand when buyers pulled back during covid. Although volume for the 1st quarter of this year is lower, it's still above what was reported pre-covid, as the chart below shows.
The Vallarta/Nayarit continues to suffer from a lack of inventory, but should return to a more balanced portfolio of properties as developers continue to build new products to add to existing inventory.
The price of a two-bedroom condominium continues to rise, as the chart below reflects. This is a nearly 20% increase over the average price in 2022 and a 66% increase since 2017.
The region with the most activity with 19% of all sales was Nuevo Vallarta/Flamingos, followed by Bucerias, which accounted for a surprising 17% of sales (usually it is around 10%). The loser was the downtown region, Centro South, which dropped from a high of 23% of all sales in 2017, to just 11% in the first quarter of this year. Why's that? There's a few reasons. First, starting about 10 years ago, the first market area to recover from the 2008 real estate crash was the downtown, more specifically Central South. Developers could build condominiums off the beach but in the center of town for a reasonable price and offer very popular amenities such as rooftop pools and lounge areas that for many offered panoramic views. They helped lead the recovery in the marketplace. Secondly, in a downturn or recovering market, at least for the Vallarta/Nayarit region, people tend to want something close to the downtown core. As the market improves prices go up because of demand (The average sales price in Central South downtown last year was $452,000 whereas it was only $252,000 in Francisco Villa). Prospective buyers tend to then gravitate to outside areas where property prices aren't as expensive. That's what's happening now, with increased demand outside of Vallarta into Nayarit, and especially behind Vallarta in the region referred to as Francisco Villa, which includes the neighborhoods of Versalles, Fluvial, and Las Gaviotas. This is reflected in the two graphs below:
Overall sales volume has dropped not so much because of demand, but because of supply. There isn't enough good quality properties on the market for the number of people looking. So there's good reason to think that prices will continue to go up until that demand can be met.
