A short answer to the question “is the real estate market changing in San Miguel de Allende?” Is, yes, it seems to be changing. The big question is, are the changes a long term response to economic changes, or a short term correction. Last year (2017-2018) during the high season from October to March prices were rising rapidly and buyers seemed willing to pay high premiums to live in or near Centro Histórico. The cost of land in Centro Histórico was being valued at $2,200 US per square meter and buyers were paying those prices. Sellers were receiving multiple offers on million dollar properties if they were in the best locations, and inventory was tight.
As we moved into the high season of 2018-2019 the market shifted. In the first two months of 2019 AMPI (the association of professional realtors) statistics showed 85 new properties coming on the market and 45 price reductions. The inventory of available houses has increased and realtors are noticing fewer buyers shopping, and many of those who are looking are making low ball offers or holding out for better deals.
As a realtors in San Miguel de Allende, we are meeting with sellers who may be in denial about the changing market and who are asking to list their properties at prices that don’t reflect the current market. Sellers are listing their homes above market value and saying they’ll wait and see if someone’s interested, but the problem is, there are similar homes coming on the market for less.
The change in the real estate market here in San Miguel de Allende seems to be mirroring changes occurring in expensive markets in the United States. It’s not possible to tell now when things will turn around and a lot depends on the economy in the United States. If the United States slips into a recession, the market changes here in San Miguel de Allende may be longer-lasting, after all 65% of our buyers are from the United States. But it’s also possible that we’re just experiencing a market correction as a result of prices increasing rapidly beyond what the market could support.
The real estate market is still healthy with many buyers purchasing homes for sale in San Miguel de Allende because of the climate, lifestyle, and activities to be found in this charming colonial city. Time will tell if the market is making a long term adjustment or if we’re just experiencing a short-term correction.