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Market Update

San Miguel de Allende Real Estate Market Update Mar, Apr, May 2021

Is Now the Time to Buy in San Miguel de Allende?


Those of you who have been following my market updates for a while know that I don't tend to write fluffy or overly positive articles about the San Miguel real estate market just to generate sales.  I simply try to give our clients good data and an honest evaluation so that each of you can make the best decisions based on solid information. However, for the first time since mid-2014, it feels like there are several indicators pointing to a window of opportunity for buyers which may not last long.   


Let me explain why by starting with the lists of what's pushing the market upward and what's pushing the market downward.



What Will Push the Market Upward

  • Commodity prices spike upward - A big factor that will drive prices up is that commodity prices have risen exponentially since the beginning of the year.  All commodities, including steel, cement, and lumber (things homes are built out of) are priced at the wholesale level internationally in USD.  Although these prices have come down since the peak in April, from January through May, lumber has gone up 100%, steel 92%, and cement 42%.  Because sales have been slow in SMA, the homes currently on inventory will not reflect these price changes yet, but new homes being built will.  In the long run, this will push prices upwards. (It's probably worth noting that commodities only make up between 20% and 40% of the direct costs to build a home.)  So even if commodity prices double, it doesn't mean that home prices will double.   
  • More US and Mexican states are opening up, Covid numbers are dropping, more are being vaccinated - Mexico's covid map shows almost all of Mexico's states completely green with a couple of exceptions and many US states, particularly in the South, are 100% open. As more states open, covid numbers continue to fall, and the vaccines become more available, it will reduce reluctance to travel, government restrictions, and will help restore mobility, which the lack of hurt San Miguel in the past year.
  • Smart money moving to hard assets - 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 into hard assets. Real estate is at the top of the list and is seen as a hedge against inflation.

What Will Push the Market Down

  • High inventory of homes for sale - The inventory of homes for sale still remains high in SMA at 31 months.  Until the excess inventory is sold off it will help hold price appreciation in check. Whether this will happen in a matter of months or a couple of years remains to be seen. Although many of the world's real estate markets are booming, this hasn't spilled over to SMA for various reasons.
  • Travel restrictions and or reluctance to travel - Although both of these factors are decreasing it will still take some time for many to be willing to travel.  It took the airlines 34 months after 9/11 for their number of passengers to return to normal.  I expect that the timeframe will be similar in this current case.  
  • Consumer confidence measurements in the US are quickly falling - 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 in the US has been dropping.
  • The pain of the shutdowns won't go away quickly for many - Although only a small percentage of our buyers will fall into this category, many people lost their jobs saw a reduction in income, and or have kids or family members struggling.  For a few, the pandemic has completely upended their plans but many more have had to put their plans on hold until they recover a little financially.


The Wildcard!

  • 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 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.  Because of this, I feel it is important to keep your eyes on the stock markets.



72 - Actual Closings (Avg 24 per month)

$398,117 - Average Sales Price

7.5% - Below Asking

293 - Avg Days On Market (9.8 months)

5 - Over $1,000,000

18 - Under $150,000 (often indicates lots or fixer-uppers)

29% - Mexican buyers


90 - Reported Under Contract (Avg 30 per month)

40 - Taken Off The Market

88 - Price Reductions

7.5% - Avg Price Reduction

178 - New Listings (59 per month, Avg Listing Price $519,140)



$499,000 - Median Price of All Properties

$497,750 - Median Price of New Properties Listed

$417,000 - Median Sold Price


738   - Total Resale Properties Listed End of May 

31 - Months of Inventory (Based on actual closings to number of properties listed)



  • The volume of sales has picked up to a nice level considering the travel restrictions that had been in place during this period.  
  • Inventory is still growing. 
  • Many agents in our office are working with several clients who are coming in the next few weeks, so I think we will see another uptick in sales. 
  • The sales volume, if it remains the same, would put us with around 43% more sales in 2021 than in 2020.
  • I have noticed a substantial increase in the number of lots or fixer-uppers sold in 2021. 



What This Means to Buyers

If this trend of higher commodity prices continues, it will end up raising real estate prices in San Miguel. The advantage that buyers have today is that compared to other cities which are starting to see real estate booms, San Miguel is lagging.  This provides a window of opportunity to purchase while home inventories are still high, prices are stable, but before we see price appreciation.  How long will it take for San Miguel to catch up?  Much depends on two factors that play off of each other.  Since SMA is a tourist and second home destination, the confidence to travel again in large numbers will play a big role.  The other determining factor will be the home inventory levels.  As long as there is more than a year's worth of inventory, prices will be held in check.  Even though the sales data doesn't reflect anything that looks like a boom yet, I have witnessed rapid changes in the San Miguel de Allende real estate market in previous cycles. After all, San Miguel is still a very desirable and multiple award-winning world-class city!


For Mexican buyers specifically, the fact that the peso has remained strong against the dollar means that your pesos still have purchasing power.  However, since all homes are built using cement, steel, and lumber (all priced in USD at the wholesale level), the window for a good buying opportunity probably has a shorter time frame for those with pesos than for those with dollars.  If these commodity prices continue to stay high, it will force builders to raise their prices sooner rather than later. As many Mexicans know well, in every significant world shift or crisis, investors flock to the USD and the pesos can lose substantial value against the dollar in a matter of days. With all of the instability in the financial markets, a similar devaluation of the pesos is easy to imagine.  Following the smart money sooner rather than later and moving your cash to hard assets may help you avoid a decrease in the purchasing power of your pesos.



What This Means to Sellers

Every seller has slightly different personal and family circumstances, financial needs or lack thereof, and plans and desires for the future.  Below is a brief list of things to consider regarding the information I have written here and the options I see for various life circumstances.

  • For those who have been wanting or needing to sell, the next few months will probably bring you opportunities to sell that we haven't seen in at least a couple of years.  You may not end up selling at a higher price, but it may provide you the freedom you've desired to move on with your life.  
  • For those who need or want to relocate to another part of the world (swap houses), much depends on what's happening in the real estate market where you want to move.  If it is also lagging behind like San Miguel, then perhaps there is no advantage to waiting.  In general terms, you sell low now (in San Miguel) but can also buy low in the city where you want to relocate. However, if the market is already booming in the city where you want to relocate, there could be an advantage in letting SMA catch up before you sell so that you don't sell low here and buy high there. 
  • Obviously, there are no clear answers that fit everyone's needs and even throwing out possibilities requires speculation on how trends may or may not materialize. 



The Best Team I've Ever Worked With!

It may sound a bit cliché, but I wake up every morning thankful and almost giddy because of the team I work with.  There are currently 30 of us and I can honestly say that they make up the best and most complete team that I have ever worked with in my whole career.  They are all great individuals who are solid and reliable.  The few who have little previously direct real estate experience are learning our industry quickly and bring with them a broad range of experience from being architects, engineers, MBAs, marketing specialists, and several attorneys. The blend of new blood and energy has inspired the older core of Realty San Miguel.  Lucero, Gloria, Jessica, and Bryan all have their 14th anniversaries working with Realty this year and then several more are not far behind.  We believe we are the most loved and respected agency in San Miguel.


The Best Clients!

It's impossible to pause and express gratitude for our team without also being equally grateful for and to our dedicated clients.  We know that many of you have options and are often also friends with other agents who work for one of our competitors, yet you continue to choose us.  We don't take that lightly and thank you.  For those who are new to San Miguel and really don't know who to choose, we are honored every time you give us a chance to earn your confidence and trust.  We have to date helped over 1600 clients sell or purchase a property.