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Market Update

Is it Still A Good Time to Buy Real Estate in San Miguel de Allende?

Is it Still A Good Time to Buy Real Estate in San Miguel de Allende?


In this issue I will compare Real Estate Sales statistics for 2021 with those of the last peak of the market in 2018.  My apologies for not doing more Market Updates this year, but it has been a busy one and even though the stats will change a little with two more weeks of reporting in this year, I don´t want to wait.

On one hand, this has been a great year and we surpassed both the number of sales and dollar volume of 2018 which was the last peak of the market.  However, there are some subtleties to the data that keep me from saying that the market is booming.  I´ll explain more as I go.








Total Sales



Average Sales Price



Below Asking



Avg. Days On Market



Sales over $1,000,000



Sales Between $150,000 and $999,999



Avg, Sales Price Between $150,00 and $999,999



Sales Under $150,000



Total Lots Sold



Percent Mexican Buyers



Reported Under Contract



Taken Off Market



Price Reductions in Period



Average Price Reduction



New Listings



Avg New Listing Price



Median Price of All Properties



Median Price of New Properties Listed



Median Sold Price



Total Resale Properties Listed Dec 10, 2021



Months of Inventory






  • The average sales price only increased since the last peak of the market in 2018 at an annual percentage rate of a little less than 2%.
  • One detail that is not obvious is that 52% of the increase in the number of sales compared to 2018 were lot sales and many of which were purchased by Mexican Nationals. There are two possible influences here. First, Mexico doesn´t have any type of tax free savings/investments like the US, so buying lots is one of the few ways one can see their money grow without having to pay an annual tax on the gain. Secondly, historically when there is an increase in lot sales it is because buyers perceive home prices to be inflated and choose to build rather than purchase a finished home.
  • When you combine the average price reduction of 8.9% with the 6.73% sold below asking (15.63%) is an indicator that buyers are not willing to overpay for a house and that sellers are for the most part being reasonable. In general, prices have not increased in prices this year and in fact, compared to 2018, have not even kept up with inflation.
  • The number of sales over $1,000,000 broke all previous records.  Plus, in this price range there were two record sales above $5 Million and $6 Million dollars.
  • The $150,000 to $999,000 price range did see an increase in sales, but the

average sales price did not really increase much.

  • Considering the travel restrictions that have been in place for all of 2021, this has been a great year and based on the number of clients we are already working with who are planning buying trips for 2022 it seems that the volume of sales can continue.



Two Markets


Every year it becomes more difficult to accurately represent what´s going on in the overall market.  In the past I have only focused on the Resale Market, which excludes most of the new developments on the outskirts of town. They tend to use in-house sales teams and then often pre-sale homes or condos which won´t show up in the public registry for a year or two after the unit actually went under contract.  So obtaining good data on this part of the market is almost impossible. 


However, this market has become huge and finished homes may equal the size of the resale market.  If you included all of the partially built and permitted but not yet built units, this whole market has probably grown to four if not five times larger than the resale market and becoming more important to take into consideration.


For many foreigners, living on the outskirts has not really been on their radar since it may mean having a car and not being “walking distance” to town.  However, besides often being half the price of properties in town, many of these places have great amenities, some have shuttles, and best of all can be purchased in pesos.  With the dollar so strong (20.94 pesos to the dollar today) this makes these homes much more attractive to foreigners.


Eric Martinez, who recently become a Realty partner, is working hard to have all of these options available on our website.  His team is already helping several gringo clients who have shown interest.  If you like a more tranquil setting or have a limited budget, it is probably worth considering these areas.  Although there may be 100 or more homes within a development, many of them are weekend homes, which means that there are few people using the amenities during the week.



What Will Push the Market Upward

  • Commodity prices –The cost for cement, steel, and wood have doubled or almost doubled in 2021.  Since these are some of the things homes are built out of this will continue to push prices higher.  Not necessarily in existing homes, but certainly new homes.
  • Smart money moving to hard assets – I commented in the last Market Update that as confidence in currencies falls and fears of inflation grows, governments, banks, money managers, equity funds, corporations, and wealthy individuals have been taking action to preserve their wealth by moving more into hard assets. Real estate is at the top of the list and is seen as a hedge against inflation. I still see the same trend.
  • Economic recovery – If the economy and tourism will continue to recover this will only bring more tourist to San Miguel, which translates into prosperity for the locals.
  • Restrictions versus less restrictions – Although there was no formal survey of the motives of real estate buyers in San Miguel de Allende in 2021, several that I spoke to were from areas of the world where the covid restrictions are the most stringent or limiting and they just wanted to move to an area with more freedom of movement and perhaps less risk.  The president of Mexico mentions almost daily in his news conferences that Mexico will not shut down again.  As long as this trend continues it will make San Miguel a desirable destination.   

What Will Push the Market Down

  • High inventory of homes for sale - The inventory of homes for sale dropped from 31 months in March of 2021 to 23 months in December 2021.  The high inventory at the beginning of the year is probably what kept home prices in check for most of the year.  At the current level, home prices will still probably be held in check until perhaps another six to twelve months has been sold off.
  • Covid – Until the pandemic is declared over, it will put downward pressure on the real estate market here.


Things to Watch!

  • Travel restrictions and or reluctance to travel - Although both of these factors continue decreasing it is an important indicator to watch.  If reluctance and restrictions continue to wane, this will be a good sign for the market. However, if some new variant pops up that causes a return to more restrictions and or reluctance it could push the market down again.
  • Consumer confidence - A high consumer confidence level accelerates spending and a low consumer confidence index rating causes buyers to be more cautious and often delay making big financial decisions until things feel more stable.  Consumer confidence both in the US and Mexico are leaning up at the moment, but there have been lots of ups and downs this year and very little stability in the numbers. 
  • The Stock Market – The importance of the stock market in this context isn’t a prediction of whether it will go up or down but rather the broad impact it has on most things financial, consumer confidence, and even real estate in San Miguel de Allende. I still see many money managers saying that there will be a long overdue correction.  If so, the issue becomes on how deep or shallow.  The deeper the correction the more severely it will affect real estate and the more shallow the converse is true.  Also, the larger the correction the more domino effect it could have on other industries or markets and reverse some of the indicators above. 


What This Means to Buyers

At this writing, it seems that it will continue to be a good time for buyers and seller.  There is not a lot on the horizon that I believe would push the market up or down in a drastic way. This means buyers can continue to take advantage of a slightly high inventory which will hold prices in check until most of the nicest homes have been sold off. 


As it relates to new developments, there is a really high inventory of permitted but unbuilt homes (a lot of competition), which will also keep prices in check.



What This Means to Sellers

With the inventory dropping from 31 months earlier in the year to the current 23 months, every seller has less competition today than they did a year ago. The less competition means the less competitive you will have to be on price.  If your home is in top shape and in a good location there is a good chance that you will see more activity this year and have a good chance to actually sell.