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Welcome to our monthly newsletter, Riviera Partners Realty, designed to keep our clients and friends informed of news in the Punta Mita, Costa Banderas, and the general Northern Bay of Banderas region. Our objective is for this monthly communication to be an anticipated tool for staying in contact with your resort home community, so please feel free to share with us any ideas for information you would like to receive, and share our newsletter with your friends, family and colleagues.
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 Market Perspective: by Brock Squire
A BUYERS’ MARKET – what it is and how does it affect pricing now?
Certainly it should not come as a ‘newsflash’ that the market in the Puerto Vallarta / Riviera Coast is in one of the strongest ‘buyers’ market’ conditions we have seen in over 25 years. At the same time, while most people’s notion of a buyers’ market is that there are relatively more sellers than buyers, what does that really mean? To really understand the anatomy of the meaning of a buyers’ market, as it relates to this market, one must examine closely the economics and then try to understand the dynamics of how these economic circumstances relate to buyers and sellers.
Supply and Demand 101
On the supply side, we have had a severely over-built condition in this market for about the past 18 months, especially in terms of condominiums being sold. Pre-construction condominiums now being offered to the market conservatively number at least 5,500 last count – some projects have stopped construction but are still selling, some are still selling but behind schedule and some are on schedule or finished and of course are still selling – so this number is a bit of a moving target give or take 10% to 15%. In addition to this inventory there is also approximately an additional 1,600 properties for sale in the re-sale MLS inventory. So to get a number on the supply side, one could reasonable say that there is now about 7,000 properties ‘for sale’ in the general over-all market. This number also excludes a very large number of social housing units and properties for-sale-by-owner and untitled properties that would add significantly to this base.
On the demand side of the equation it is a bit more difficult to gauge exactly what that number is. Historically, annual demand for all units in the area has ranged from about 1,500 units sold per annum up to a high of about 2,500 units sold per annum. Currently, and over the past 9 months or so, based upon MLV stats, personal contact and market knowledge, I would estimate that the number of sold units per annum is running about 800 units. That would be about 66 units per month, give or take. Keep in mind this is an average number and reflects several months over the past 9 months where the monthly average was likely closer to 30 units being sold in a month than the 66 average.
Without getting too much further into detail, it would seem that this market currently has an 8 to 9 year supply of product to potentially work through at current absorption rates. Of course those last 3 words tell the story. Markets change and so will this one, the question of course is when and by how much? The answer to that question I will leave to the next person who may dare to look into the clouded crystal ball!
Sellers Beware!
Now, the interesting part… What is the actual microcosm of a transaction when a buyer encounters a property he is willing to make an offer on? And what is it going to take to separate him today from his very, very valuable cash? Typically in most real estate transactions, the asking/listing price has been the subject of some research on the part of the agent who has undertaken to find the true market value through current market analysis using recent sales, recent listings and the agents’ and seller’s experience. Once an offer has been presented (which today will typically be at least 10% to 15% less than what better be a realistic listing price), the negotiations then begin with counter-offers and new offers until there is hopefully a negotiated price and terms to the transaction. Typically these negotiations are quite active and in probably 70% to 80% of the cases there will be agreement between the parties at usually something close to half-way between what the offering price is and the listing price is, and both parties walk away with some level of winning satisfaction.
But today’s market is anything but typical! Today the negotiation process has become much more abbreviated, and if the seller is not properly prepared, he will be left ‘standing at the altar’ wondering what happened to his ‘buyer’. The fact is that virtually every buyer comes into this marketplace having done some level of research on the internet or through friends and associates who may live or own in the area. It doesn’t take long for a savvy buyer to figure out that with 50% fewer buyers coming to see 8 years of inventory, he is in a pretty strong negotiating position - Purchasing Power! At the same time, this buyer has heard and read all about the various reasons why he should never consider buying in Mexico, notwithstanding the economy and the state of the market – so the buyer is beyond nervous when he or she does finally make the offer. At this point, if the seller thinks he is in a typical offer / counter-offer situation, he has already put himself in a position to lose! There must be utmost care given at this point to ensure that any type of counter-offer has been sounded out with the buyer and that the buyer’s level of motivation and comfort is solid with the terms of the counter-offer. If the seller reacts too strongly against the first offer in his counter-offer many recent experiences has shown that the buyer will react negatively and nervously and be completely out of the deal. The original offer that is made by the buyer to the seller, while it may be massaged and perhaps brought up slightly – say 1% or 2% - that will often be the maximum that can be managed without the very real possibility of losing he buyer altogether.
A recent case is illustrative of this situation. After doing a lot of research, evaluating the area and the development for several months, a bona-fide purchaser made a written offer to purchase a particular property at $3.2M on a listed value of $3.9M. The seller, after taking about 10 days to deliberate countered the offer at $3.4M. The purchaser thanked agent and seller, and declined. Three days later (over a weekend) the buyer informed the agent that he had entered into a contract to purchase a property in Hawaii for $3.2M. Unbeknownst to the original seller, the seller came back to the agent to inform him that same day that he would accept the original $3.2M offer. Needless to say, the purchaser had already had his Hawaiian property under contract and the seller lost out!
The point here is we are in a very soft and unusual imbalance between supply and demand; and that while properties seriously for sale must be attractively and realistically priced in today’s market, the first offer is very likely to be very close to, or in fact, the best offer and sellers absolutely need to be keenly sensitive to this situation. The unfortunate fact is that there is not only an immense amount of inventory available in this market but in almost every one of our competing markets as well and those markets are eagerly looking for the very same buyers that we are!
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 Feature Properties for Sale: Special Buying Opportunities…opportunities such as these will likely become more limited in the future, there has never been a better time to purchase real estate in Punta Mita and Los Veneros!
Riviera Partners Realty is pleased to feature this limited selection of very special purchase opportunities. In the past 60 days we have experienced a marked increase in interest and offers being extended, although the market is still very much in the hands of the purchaser, and those sellers who understand the current market conditions and are willing to work within its boundaries. As such, we believe the window of opportunity for obtaining undervalued properties or special purchase terms could potentially be beginning to draw to a close.
Among our extensive boutique inventory of select properties, we feel the following offer exceptional values, either through recent price reductions and/or personally offered creative financing terms. We invite you to review the selection of properties below, and should you have an interest, please contact us for additional details.
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Four Seasons Private Villa, #18, located above the Four Seasons Resort, in this acclaimed enclave of residences. What makes this residence special is its prime location in the community, adjacent to an arroyo, which offers additional privacy as well as sweeping southwesterly views. This Villa was customized during construction by the current owner with his extensive design and construction experience and with the assistance of his two noted daughters who are themselves architects. This spectacular 5-BR, 7-bath Villa offers expansive majestic panoramic views of the Pacific Ocean, Marietas Islands, the entire Punta Mita residential community, and commanding year round sunset views, as well as its full access to the services and amenities of the neighboring highly acclaimed Four Seasons Resort. Price has recently been reduced. View it now at: Four Seasons Private Villa 18
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Las Palmas Villa #22, is a customized villa within the vibrant community of Las Palmas. With partial ocean-and golf views, this 4-BR, 4 ½ bathroom fully furnished Villa features the entire living area, living, dining, kitchen, expansive terraces and a pool on its upper level, plus additional other extras that the current home owner included. Conveniently located in the heart of Punta Mita, in easy walking distance of the Resident’s Beach Club, and surrounded by golf fairways. The current owner has priced to sell, with the listing price being that of pre-construction of 4 years ago, notwithstanding the owner is offering extremely accessible owner-financing to further facilitate the sale of this property. View it now at: Las Palmas Villa 22 |
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Hacienda de Mita Penthouse 8-1 – enjoy spectacular views from the expansive terrace of this prime Penthouse condo, in one of Punta Mita’s most popular communities. Featuring 3BR, 4 ½ bathroom plus a “flex” room. Hacienda de Mita community amenities include an oceanfront Beach Club with pool, plus access as a resident member to Punta Mita amenities. Contact us for special pricing, offered for a limited time. View it now at: Hacienda de Mita PH 8-1
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Lagos del Mar 21 – Lagos del Mar has evolved into one of the great residential sub-communities within Punta Mita, known for unparalleled views that combine the best of Banderas Bay and Jack Nicklaus Signature golf. Few home sites remain undeveloped, and fewer still come to the market. Price to sell. Lagos del Mar home site number 21 is a great opportunity not only with regard to price, but also for its location, as this home site already has the two neighboring homes built, allowing you to design your resort home taking this into consideration to maximize views and lot usage. With great vistas of the Bay of Banderas and the lake on the 13th hole of the Jack Nicklaus Signature Pacifico golf course, Lagos del Mar #21 provides a singular opportunity for constructing your dream resort home. View it now at: Lagos del Mar 21
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Los Veneros 211 – The Los Veneros condominiums are notable for their expansive size and ample outdoor living terraces, complete with private pool. The Los Veneros community is located on 37 acres, including 1,262 feet of coastline on one of the most beautiful, wide sandy beaches in Puerto Vallarta and the Nayarit Riviera. Also planned at Los Veneros is a boutique hotel with 80 suites to complement the eight residential buildings encompassing 239 condominiums. What makes this unit special is its prime beachfront location—one of only 41 beachfront condos in the community. Recently completed, furnished, and ready to move in, it features 4 bedrooms plus 4 baths. Contact us for special pricing, offered for a limited time. View it now at: Los Veneros 211
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Additional special opportunities are available in the Punta Mita, Punta de Mita, Los Veneros and other Costa Banderas communities. For additional details on any of these special opportunities, or to schedule a viewing, contact Riviera Partners Previews, at: sales@rivierapartnersmx.com
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Feature Properties for Rent: Las Palmas de Punta Mita; Villas #2 and #14 plus other selected properties available from August 1st.
There is still time to book this special Summer Rental offer at the acclaimed community of Las Palmas Punta Mita, in two signature residences, Villa 2 and Villa 14. Riviera Partners Previews is offering a special rate of $650 USD per night, in these 3-bedroom private villas. Las Palmas is located in the heart of the Punta Mita resort community, just a 5-minute golf cart ride away from the Residents’ Beach Club or Punta Mita Golf Club.
These three-bedroom villas feature over 3,800 square feet of expansive indoor/outdoor living areas, and embody the open-air lifestyle of Punta Mita. Both border the fourth fairway of the Pacifico Jack Nicklaus Signature golf course at the Punta Mita Golf Club, with views across to the famed “Tail of the Whale” island hole.
The single level, 3-bedroom, 3-bath homes feature a combination living/dining room that opens onto a partially covered expansive terrace, with outdoor dining area and private pool. The primary master suite offers a separate, private terrace, as well as a walk-in closet and large bath with outdoor shower and patio. The second bedroom, also with walk-in closet and private bath, opens up to the main terrace. Just off the large central patio, which showcases a stunning water feature, is a gourmet kitchen and laundry, as well as a guest bath and third bedroom. Included is satellite TV and wireless Internet access.
These homes are ideal for those wanting to explore Punta Mita’s real estate opportunities. To reserve, please contact Nancy Bravo, at: nancy@rivierapartnersmx.com.
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| We are pleased to announce a new monthly section in the Riviera Partners Realty Newsletter, focusing on mortgage financing opportunities and related financial news that may impact your decision on financing resort property in Mexico, contributed by Meridian Capital Partners LLC (MCP). MCP’s sole focus is to assist affluent individuals interested in financing a primary, second or investment home in Mexico. |
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Mexico Mortgage Financing Report,
by Meridian Capital Partners
The past twelve months have been—by all accounts—one of the most difficult and challenging in the history of the U.S. mortgage industry. Mexico has suffered its own set of economic setbacks, based in large part on its close ties to the U.S. economy. This was then amplified by a record drop in tourism over recent months due sensationalized media reports about incidences of violence and the outbreak of the H1N1 flu—both issues which bypassed the resort areas near Puerto Vallarta. Mexico’s tourism industry is an important economic driver, and especially so for areas where tourism drives resort home property sales.
Still what we have observed is that in the key regions of our focus—which include Punta Mita, Riviera Nayarit and Los Cabos—home sales velocity has slowed, however these regions are not experiencing the downward price adjustments that have been seen in many parts of the U.S.
Why? Two reasons – Mexico property purchases have traditionally been made via all-cash transactions, meaning there is less pressure to sell in order to meet debt obligations. As well, prices paid for properties were perhaps more realistically related to value, where easy availability to money didn’t work to drive up values to levels that were higher than warranted. Second, the owners of these high-end properties are likely less affected by the economic downturn, and have the ability to wait out a soft market, rather than sell at potentially the low point for property values. Of course, there is also the fact that many owners simply enjoy using their resort homes, and have no desire to sell at this time.
In our primary market of Punta Mita real estate, values have held, with an increase in sales activity occurring over the past 60 days. Where activity had come to a complete halt between October and April, a number of transactions have entered the closing process since May. Riviera Partners tells us that they are seeing a stronger interest in financing properties than ever before – historically, financed transactions comprised only about 10% of the market, but they are now seeing that percentage move significantly up to about 30 to 35% of the market.
Our view of financing encompasses not only the transaction itself, but also how this property acquisition fits into your overall strategic financial goals, such as current income requirements and estate planning. As you investigate real estate opportunities in Mexico, we encourage you to consult with Meridian, to evaluate the very best way to make this transaction work to your financial benefit. We invite you to visit our website and view our blog on Mexico financing at: http://www.MeridianMexico.com.
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Feature Resort: Four Seasons offers unbeatable 1-2-3-4 Special!
There are many reasons to visit Four Seasons Resort Punta Mita this summer, but the best reason of all is their newest offer featuring truly unbelievable savings. Book four nights and receive a resort credit of $1,234 USD. This represents an impressive savings because, unlike most other resort-credit deals, you can apply the $1,234 credit toward the cost of your room (as well as toward any incidentals). Rates begin at just $415 per night.
Calculate the savings: If you book a garden-view "casita room" (the hotel's least-expensive room category) for $531 per night (including taxes and resort charges) for the minimum of four nights, it costs $2,125. But apply the $1,234 in resort credits, and your four-night stay now costs just $891, or $223 per night.
Once you’re there, what will you do? Here are 1-2-3-4 of our favorite things!
1. Relaxing on a daybed in your private pool side cabana, a five-minute foot massage and Evian spritz -- the perfect accompaniment to a leisurely morning...
2. Swaying to the beat of timbales during your first salsa lesson before a tasting session of añejo and reposado Tequilas at the Cultural Center...
3. Toasting to an exquisite dinner of regional Mahi Mahi and Red Snapper in Bahia, against a backdrop of an orange sunset...
4. Marveling at the Tale of the Whale, the world's only natural island green, as you tee off toward the Pacific...
This special rate applies for travel through: December 21, 2009 (certain blackout dates apply). For complete details and reservations, contact your travel professional, visit fourseasons.com/puntamita, or call the resort directly at: 1 (866) 280-9490, or (+52) 329/291-6000.
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 Marina Riviera Nayarit News
Take advantage of the following entertaining and fun-filled activities offered by Marina Riviera Nayarit in La Cruz, designed to bring people together to enjoy the nautical life…or simply the view! Activities are open to the public.
From August 13-15, Marina Riviera Nayarit will be hosting the 3rd Annual International Marlin & Tuna Fishing Tournament, Riviera Nayarit, Mexico. Complete tournament details and online registration are available at: rivieranayaritfishingtournament.com/en/, or call (+52) 322-225-5467. Also during this weekend, Marina Riviera Nayarit will host the 1st Annual Expo Nautical http://www.exponautical.com/ .
- Every Tuesday, at 7 pm, in the Etupa VIP Lounge – Dominos Night! 2-for-1 drinks, snacks, and dominos, in air-conditioned comfort.
- Every Friday, at 8:45 pm, in the VIP Lounge – Movie Night – Popcorn, soft drinks, beer and more.
The Marina boasts over 350 slips, ranging in size from 31’ to 400’, with a complement of full services for every slip. As well, the Marina’s open-air restaurant, Ikuai, is open daily for breakfast, lunch, and dinner, from 8am to 9:30pm, and is open to the public.
Every Wednesday, Ladies enjoy two-for-one breakfasts!
For more information on Marina Riviera Nayarit, visit www.marinarivieranayarit.com, or call them at: 329/295-5526.
Plaza Ollin Update!
Plaza Ollin, will be open throughout the summer months.
Mar de Suenos boutique has some great offers available at this time, so come on by and pick up something new for the summer!
The Boca Deli is now open for breakfast and lunch and is now offering a more complete menu. Come by for a fresh juice, tasty sandwich or try the delicious lunch menu!
Plaza Ollin 2009/2010 Social events: Stay tuned for our winter event calendar to be announced in our August newsletter. This coming high season, Plaza Ollin will be hosting bi-monthly social events for all local residents, guests, friends, visitors and hotel guests to get to know one another and enjoy what our vibrant and evolutionary community has to offer.
Plaza Ollin is located on Ave. de las Redes approximately just 100 meters from the second entrance into the Punta Mita community on the main street accessing the beach front restaurants and beach areas. For more information contact Plaza Ollin at (+52) 329-291-5442 or 329-291-5402.
Contact Information, Plaza Ollin:
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 By Jonathon Smart
Surf’s up! July ended with what will go down as an epic five days of swells offering waves that for two days in certain breaks around the northern bay (La Lancha, The Cove, The Light House, Punta de Burros and possibly others) had sets that exceeded double head high waves! There were waves for everyone with even the most learner-friendly of our local (El Anclote) breaks in front of Hacienda de Mita and the Punta de Mita village getting to head high at its peak. This area is a jewel for surfers, and the summer swells are bringing us exciting opportunities to enjoy a long curving bottom turn and some slashing more radical off the lip action for some. This was the first of our summer swells, the summer will inevitably bring many more and you can stay up to date with what breaks are working best here within our monthly Riviera Partners Previews Newsletter. For more up to day to day surf information feel free to contact me: Jonathon@rivierapartnersmx.com / (+521) 322-105-0243
Summer is already bringing beautiful crystal waters providing amazing diving inside and outside of the bay. This is the best time of the year to get PADI certified and explore the reefs as certified divers. Our friends at Punta de Mita Expeditions offer a Marine Snorkel Safari, where you travel by boat to the Marietas Islands National Park and have the opportunity to view giant Pacific manta rays, turtles and octopus – it’s an amazing experience! Warm currents are attracting the first schools of Yellowfin tunas and Wahoos opening the big game fishing season. For more adventures in paradise, contact Punta de Mita Expeditions, http://www.puntamitaexpeditions.com, (+52) 329-291-6649.
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