Real Estate Speculators in Puerto Vallarta, Mexico See Silver Lining It's a buyer's market in PV that we've never before witnessed and will probably not see again in the future. There are currently thousands of incredible finished condos available at rock bottom prices
Thanks in part to the tech and housing bubbles, Americans have experienced an unusually strong growth in net worth during the past 15 years, The graph below depicts a typical stock market portfolio value growth of more than 200% during the first five years of this period followed by the bursting of the tech bubble and then returning to more than 200% followed by the bursting of the housing bubble and finally recovering to nearly a 150% gain.
The combination of stock portfolio growth, housing value appreciation, easy credit, and refinancing capabilities put most Americans of the Pre-Boomer and Boomer generations in a financially comfortable position and an optimistic mood for most of the past decade.
Having confidence in the economy and the feeling of financial strength, many of these about to retire people started planning for retirement and the thought of a second home on the beach or Sierra Madre hillside in sunny and beautiful Puerto Vallarta, Mexico seemed like a very logical and affordable plan.
In 2000, representing the Alliance for Change and the Mexican National Action Party (PAN), Vicente Fox, and then six years later, Felipe Calderon (both Harvard graduates), promoted strong foreign investment philosophies thereby creating an environment conducive to capital expenditures in Mexico.
With the retiring North Americans shopping for a beautiful place to retire and the Mexican government inviting them with open arms, conditions were ideal to ignite a ten year housing boom. Consequently, from 2000 to 2008, the demand for condos seemed to be insatiable and developers from all over Mexico, the US and Canada, and even Europe raced to Vallarta in order to cash in on the land rush.
The developers started buying up all of the remaining beachfront property and the available prime hillside lots and soon thereafter, they started planning their developments. By 2001-2002, construction of the first projects was underway. It seemed as though the supply just couldn't keep up with the demand as many of the projects were at least 30% sold out prior to breaking ground and were completely sold out well before the project was finished.
Due to the success of these initial projects, the developers immediately started planning future, substantially larger projects. By 2006, there were more than 100 developments (many mega-projects) in the planning stage and pre-construction sales were well underway. Many were multi-tower or multi-building complexes with hundreds of condos that were to be constructed in phases.
As soon as the design of a new project had been completed and attractive conceptual drawings had been prepared, the developers would set up a trailer or perhaps an office in one of their completed projects and start their pre-construction sales activities. Of course, the first "invitees" allowed to take advantage of the pre-pre-construction prices (slightly above the cost of construction) were those that had previously bought in one of the developer's completed projects. Immediately thereafter, the general public was offered pre-construction pricing and construction began.
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