BY NICK FONG
In this article, I aim to address several frequently asked questions that have come my way via social media and from our valued Ronival Real Estate clients. Essentially, everyone wants to know: What’s on the horizon for the real estate market as we approach the high season?
Question number 1:
What should we expect for the real estate market in the coming months, especially now that we are about to start the high season?
The high season typically starts at the end of October here in Baja Sur. My expectation is that just like every year we are going to get more tourists coming to our region. More tourism means more buyer tours and interest. And based on what I’m seeing with our real estate agents within Ronival right now, we’re actually going to have a fairly typical start to the high season, which means a lot of tours and sales will start to increment up, starting at the last two weeks of October, continuing through November, December, and all the way through the month of May, and really drizzling into June and July. Like this year we saw June and July were still fairly good months, and I expect the same thing for the 2023-2024 season.
Question number 2:
If I am a buyer and I want to find my home in Cabo or Baja, what can I expect?
Are prices going to go down or will they be stable?
Prices overall are going to be stable. In some communities, they’re going to actually rise because of the supply and demand, the supply is still well below the demand. There are going to be instances -that I’m seeing right now- where sellers were overly eager in raising the prices to a point where the demand is just not willing to pay. And so it’s a situation that we’re seeing here and also in the United States.
Question number 3:
If I am a seller, what can I expect?
The sellers, you’re going to get more buyer traffic than the last two to three months which have been our summer low season for real estate and if you put your house or your condo on the market, and you’re working with a real estate agent that is well equipped with the information and the sales and marketing tools necessary to sell, it will sell this season.
The average days on market for all properties in our MLS is just under 300 days, so less than a year. But for a finished resale product, it is 90 to 120 days. So that means if you put your property on the market, condo or house, in November, it’ll be under contract on average by the end of February.
Question number 4:
How has the exchange rate, with the peso stronger, impacted the real estate market?
What’s interesting is since the Mexican peso has gotten stronger against the US dollar and the majority of our real estate, and in fact all of our real estate in the MLS is quoted in US dollars, more Mexican buyers have been entering into the market because they typically are earning and saving and investing in Mexican peso currency and then they’re converting and buying in US dollars. Their Mexican pesos are going much further.
On the flip side, it’s caused a lot of havoc with our Mexican developers because they’re building, they’re buying supplies typically in Mexican pesos and they’re recovering their expenses with revenue in US dollars. They are suffering and it’s a situation where more Mexican or any developer in Baja Sur is suffering.
Question number 5:
What is my prediction for the real estate market in the coming months?
As we usher in the latter half of 2023, Baja California Sur’s real estate horizon beams with unprecedented potential. Predictions indicate an oncoming surge of international investments, bolstered by global economic rejuvenation and the region’s enduring appeal.
The imminent launch of a great number of residential and commercial projects suggests a market keenly attuned to rising demands. This anticipation is further accentuated by the local administration’s initiatives focused on infrastructure augmentation and enhancement of tourism-driven facilities.
An emergent trend to watch is the escalating inclination towards sustainable and eco-friendly property developments, aimed at satisfying the discerning, environmentally conscious investor.
If you have more questions, please subscribe to The Nick Fong Podcast on your favorite audio platform where you will get many of the answers you are looking for or message me on Instagram @nickfong_ronival and @ronivalvacations.