Real Estate Market Update April 2022 San Miguel de Allende

San Miguel real estate continues to see higher than normal sales volume and there is clear evidence that prices are moving up. 

Sales in the last year or so have completely defied and have very distinct patterns from the previous three plus real estate cycles based on 35 years of sales data.  So, in this market update, we will try to comment on some of the raw data presented that may not accurately reflect the current market.

Although it appears that prices are increasing and occasionally we do see more than one offer within a day or two, San Miguel has still not seen some of the extremes of other US and Canadian cities.

MARKET ACTIVITY APRIL   2022

Observations

• Although the average sales prices comparing April of 2021 to April of 2022 increased by almost 40%, this is more of a reflection of the fact that there are many more higher-end buyers in 2022 than there were in 2021.  We can see prices increasing, but not anywhere near 40% compared to a year ago.
• Four other indicators that prices are increasing are:
  • There have been substantially fewer price reductions
  • The percentage of the price reduction is dropping
  • The percentage sold below asking continues to shrink
  • The average price of new listings continues to climb
• The increase in the number of days on the market is probably a reflection of the best inventory being sold off in the past few months and now homes that were previously considered a second choice are not being sold.
• The rental market is still extremely active.  Our agents who also work in rentals all have waitlists of clients wanting to rent within walking distance to Centro for the upcoming winter, but almost all of the homes between $1,000 to $3,000 USD a month are already booked.  If you have a home that is not being used and could be rented now would be the time to reach out to one of our rental agents.

What Will Push the Market Up or Down?

We continue to monitor many indexes or data points in an effort to determine where the market is going.  However, the list of things that can push the market up or down is larger than ever and much of what we normally track has conflicting data that are pushing in opposite directions. 

For example, the US Fed raising interest rates has put a huge damper on US home sales as buyers now need 50% more income to qualify for the same loan as just a few months ago.  Obviously this should push real estate prices down.  However, it has also been reported that in the US there is a shortage of two million homes, which should push prices up.  It is unclear how the volume of sales and sales prices will evolve. The buyer’s demand is there in the US, but the supply of money is waning.

The fact that San Miguel has still not seen the huge price increases that many areas of the US and Canada have seen in the past year is an indication that it is still a good time to purchase a home in San Miguel.

Philip Hardcastle

Lilia Aguilar