US and San Miguel Market Disconnect – Hopefully Closing Soon
I thought it would be worthy to comment on the current disconnect between the real estate markets in the US and San Miguel de Allende and the opportunities I believe it represents to buyers. I´m writing this on August 3, 2020 – (hopefully) almost post covid.
I noticed in July that there were many markets in the US which are now booming again and even some markets where homes are selling very quickly and a high percentage of them via bidding wars between buyers. Several of the authors are not sure if this is just a rebound from the months of shutdown or if it is a new trend. Certainly it is something I am keeping my eye on.
From the articles I´ve read, dense intercity areas are somewhat suffering, but smaller cities, suburbs, and country homes are doing well because many buyers are now wanting a little more outdoor space.
Although we have seen a number of buyers wanting a place to ride out any future outbreak, we have not yet seen anything that one could call a boom, and if you have been following my blogs you have probably seen that we are sitting on ten plus years of inventory and sales have been slower the first six months of 2020 than they have been in several years. Much of this has been created by the limited ability to travel.
However, we are starting to see an increase of buyers planning trips and expressing the desire to both beat the next rush and believing that they can negotiate more aggressively on price when sales are slow.
From my experience (since 2004), I believe this is wise thinking for three main reasons.
- First, San Miguel´s real estate market does seem to reflect what´s happening in the US market both on price and sales volume - but with a few months delay. So if the overall US market is on an uptick now, then San Miguel´s will also be within a short period of time.
- Secondly, there are always sellers here who are under outside or self-imposed pressure to sell. Since almost all homes here are purchased with cash versus a mortgage, selling a home in San Miguel represents liberating a nice chunk cash which provides a lot of flexibility for the next stage of the seller’s life. When sales are slow, sellers tend to be much more negotiable on price and this is the time when a buyer can find some of the best deals.
- Lastly, San Miguel’s real estate market is actually fairly small and the inventory at any specific price range can be depleted fairly quickly when the sales volume picks up. A few months of goods sale volume can reduce a buyer’s selection by half.
So if you are thinking of buying a property in San Miguel de Allende, there could be an advantage to buying sooner rather than later. You will more than likely have much more selection of homes within your budget and can probably buy it at a much better price.