17.9445 on Sept 28
The Dollar Hit 18 Pesos. What Does That Actually Mean for Puerto Vallarta Real Estate?
The dollar reached 18 pesos during trading on September 28, and the real estate posts practically write themselves: “American buyers just received a discount in Puerto Vallarta!”
Hold on. Some did. Many didn’t.
Here is what actually changed. Banco de México recorded a closing rate of 16.8912 pesos per dollar on September 4 and 17.9445 on September 28. The dollar buys more pesos than it did earlier this month. Whether that helps you buy or sell a particular condo depends on the price you agree to and the currency you will use.
Let’s use one simple example.
A seller wants 9 million pesos for a condo and keeps that price at 9 million. At 16.89 pesos per dollar, a US buyer would need roughly $532,860. At 18 pesos per dollar, the same 9 million pesos would cost $500,000. In that situation, the stronger dollar makes a real difference to the buyer.
Now change one detail: the seller wants US $500,000, and the parties agree to keep the price at that dollar amount. A buyer paying in dollars still owes US $500,000. The condo did not suddenly go on sale because the peso moved.
The reverse matters too. If you hold pesos and agree to pay a dollar-based price, a higher dollar can make that purchase more expensive in pesos.
What about sellers?
A seller receiving dollars and planning to spend the proceeds in Mexico may welcome a stronger dollar. For illustration, converting US $500,000 at 16.89 would produce about 8.45 million pesos; at 18, it would produce 9 million pesos. Actual proceeds depend on the conversion rate and costs.
But a seller whose price stays fixed at 9 million pesos has a different result: that amount is worth fewer US dollars when the peso weakens. And a seller planning to take the proceeds back to the United States or Canada needs to calculate the result in the currency they ultimately need.
This is why I would not tell every buyer to rush in, or every seller to raise their price. An exchange-rate move does not tell us whether an individual condo is priced well. It does not fix a title issue, change an HOA balance, improve a view or erase the competition down the street.
My advice if you are considering a purchase or sale in PV: Look past the currency symbol in the advertisement. Find out what price and currency the parties are actually agreeing to, how any peso conversion will be calculated, and when it will happen. Then compare the property with the other choices on the market.
The dollar hitting 18 is news. Whether it changes your deal takes a little more math.
Will Hutt
Puerto Vallarta Realtor
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