May 5, 2006, 4:55 PM
Post #3 of 8
Actually I am a former broker in the area and am now a real estate consultant. I am out of the promotion business and are helping buyers and sellers in the process of buying and selling providing home inspection services and market analysis.
Re: [pat] Ajijic Real Estate Market and some background
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What has happen with sales during the first four months of the year is similar to the last two years however, it is indicating that the trend is still continuing of brisk sales
The first four months of the year are generally the highest point of sales for the year with the snowbird traffic and many new people investigating the area. For the last few years I have kept some data and researched other sources to come up with the following information. These numbers are approximate and to the best of my knowledge.
The sales have been like this for the first four months over the last few years ...
Jan to Apr
% Entire Year
The effects of 9/11 caused a lot of potential buyers to hold back from buying since the future was not certain (reasons too many to go into here). Hence for the years of 2002 and 2003 the buyers held back and overall sales were slow. However, at the end of 2003 and into 2004 there were a lot of buyers that finally made the move and sales zoomed. You can see this by the sluggish sales in the first four months of 2003 and then the sales started to pick up significantly by the end of 2003.
In 2004, it was a historic year for total number of sales. Prices started to increase and the developers started to take notice. Sales continued to be good in 2005 and as you can see, the first four months of 2006 they have been good however, have dipped slightly and I anticipate sales will continue to be brisk finishing the year with approximately 350 sales. Still near historic high levels in sales.
Inventories have remained relatively stable with approximately 450 homes for sale but what is interesting is in certain sections of the market depending on price and location, the inventories have been lowered. For instance, the demand remains high for village properties (Ajijic) and some of the prices remain high. Properties may receive multiple offers or only be on the market for less than two months. Also there are fewer homes in the below $150,000 USD than in previous years. This is also a factor which has caused the average price of sale to increase. Buyers are opting to pay the higher price rather than go into something smaller.
Lot sales were very good over the last two years and the contractors and builders are all very busy here at Lake Chapala. Many of these are homes built to live in rather than to speculate on the market as we saw in building boom of 1995-1997.
The market has changed and I believe the sales will continue to be healthy however, the rapid increase in prices has started to level off in my opinion. Like all real estate cycles there ebbs and flows (peaks and valleys if you like) and this appears the sales have slowed slightly but the bubble is not bursting and is allowing the market to catch up. Buyers are taking time to research and investigate their options (price, location, age of home, etc).
The number of people buying and selling privately has increased slightly as well. I have seen as a consultant and talking with the lawyers and notarios in the area, that there have been more deals without a real estate agent however, I estimate the real estate agents are involved in approximately 75% to 85% of the sales in the area. This is totally the opposite of the national average (Mexico) where 75% of the sales are done without a real estate agent. The level of services available and professionalism of the real estate agencies locally is better than the national average and perception by the consumer.
The summer should be interesting since this is when there is a higher percentage of serious buyers however, not as many buyers in total as the first four months of year.
Well I have run on a little too much, I am sure that there will be a lot of feedback to this posting.
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