Market Update

San Miguel de Allende Real Estate Market Update February 2021  

Last month I mentioned that both the US and Canada had put new restrictions on people entering or re-entering the country by air and had expected that real estate sales would slow down.  They have not.  February actually showed several nice sales and March already seems busier than February. 

San Miguel has dropped its covid alert from orange to yellow and like most cities, are seeing cases drop rapidly. 

Despite the international travel restrictions, the town seems busy.  Most of the agents in our office are working with multiple clients.  It’s different than before, with fewer people just coming to investigate, and tends to be clients who are already determined to purchase. Beginning in February we also began to see walk-in clients again.

I live in the country so have to pass through a covid checkpoint on the highway every morning on my way to work which usually only delays me 2-3 minutes.  However, this holiday weekend I was twice delayed more than 30 minutes because of the volume of tourists driving into San Miguel.  Despite the Jardin and other public areas being “closed,” on Sunday when I came into town it was wall to wall people in Centro.

Our website and email activity continues to increase, which indicates that there is still a strong interest in San Miguel.

Although it is only anecdotal evidence, it feels that as the covid slows people are just ready to start living again and that there is a lot of pent-up demand.

MARKET ACTIVITY FEBRUARY 2021

21 - Actual Closings

$570,702 – Average sales price

8.0% - Below Asking

519 Avg Day On Market (some really old listings were sold)

3 – Over $1,000,000

5 – Under $150,000

21 – Reported Under Contract

6 - Taken Off Market

43 - Price Reductions

51 - New Listings

726 - Total Resale Properties Listed

$478,000 - Median Price of All Properties

$450,000 - Median Price of New Properties Listed

$478,500 - Median Sold Price

34 - Months Of Inventory (based on actual closings to total properties listed)

Observations: 

There is not a lot of new information to comment on.  If you did not ready my January Market Update where I show the data backing the idea that San Miguel real estate prices have moved back into reality you can do so here.

Where's The Market Going?

This is mostly a repeat of last month’s Market Update.  I don´t really see any data point which would cause prices to drop much further or cause prices to quickly appreciate.  The sense that there is pent-up demand will probably help the sales volume, but probably will not be enough to cause price appreciation.

• In general, San Miguel homeowners have paid cash for their homes and with the carrying costs so low, tend to just sit on them when the market is slow.  The price correction we have seen in the past few months is probably coming to an end as most of the fluff has been taken away.  Most will not sell at a loss even if there is continued downward pressure.  Unless something else in this list or unforeseen emerges, I wouldn’t expect any substantial changes in prices for the near future.
• Although this pandemic has hurt many, it has less so the demographic who typically buys homes in San Miguel.  Also, it has not taken away buyer’s liquidity like the global financial crisis of 2008 did when we saw huge stock market losses and a halving of real estate values in the US.
• The performance of the stock markets is something to watch over the next few months.  Although fewer buyers are actually depending on selling stocks to make a purchase, drastic corrections can cause consumer confidence to fall and new highs will cause consumer confidence to strengthen.
• The one area that somewhat concerns me is a recent report that showed 6.7 million people in the US are in some kind of mortgage forbearance program with many of those programs set to expire in March and April.  That represents about 5.5% of all households.  Although it appears many of those are working their way out of the program and be fine with full employment again, the larger concern is if there are more shutdowns and job losses which will raise the delinquency numbers.  Banks dumping large numbers of repossessed homes onto the market at discounted prices pull all home values down. 
• As more receive their vaccine, I suspect that more will be willing to travel.  Of course this only helps the real estate market here.

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