The price of homes in the towns of Dorado, Humacao, Ponce, Aguadilla, and Isabela are going up and, in some cases, are even surpassing pre-Hurricane María levels, according to a study by Point2 Homes, a firm that covers real estate market trends and news.
Although Puerto Rico’s economy is still in the mire, the island’s housing market seems to be on the path to recovery, it concluded.
“Americans looking for bargains — as well as other investors moving in to scoop up distressed or foreclosed properties — have had a positive influence on the real estate market, helping in no small way with the island’s recovery,” said Andra Hopulele, senior real estate writer at Point2 Homes.
“The bulk of the help, however, came from several governmental initiatives — including new tax incentives and other housing stimulus measures, as well as federal aid and insurance money — all intended to revive the economy,” she said.
To follow up on a study from 2018 and to take a closer look at Puerto Rico’s current housing market, Point2 Homes zoomed in on the real estate asking prices in some of the largest Puerto Rican towns. While four of them remained on the downward course they started on more than a decade ago, 15 markets in the analysis witnessed home price appreciation.
Here are the study’s main highlights:
- Puerto Rico’s seasonally-adjusted, purchase-only house price index climbed 14.01% in the second quarter of 2019, compared to the same period in 2018;
- Dorado — an upscale tourist destination affected by the recession and the 2017 hurricane — also “witnessed the most spectacular comeback; the town experienced a 66% increase in asking prices, going from a modest $190,000 in 2018 to $315,000 this year;”
- Runner-up Humacao, another tourist destination, saw its home prices jump 39% compared to last year;
- Ponce, Aguadilla, and Isabela all noted home price increases greater than 20%;
- Cabo Rojo is one of only four towns where properties continued to depreciate, leading the way with a 14% drop;
- Although home prices in Aguada went up slightly in the post-hurricane Maria period, they declined by 6% in 2019; and,
- Luquillo and Guaynabo, on the other hand, stayed the course — listing prices in these markets were driven down by the volatile economy, with the hurricane adding to their distress.
“Although Puerto Rico is still navigating uncharted waters, given that it is the first state in history to seek out bankruptcy-like relief, there is one notable factor pointing to improvement: home price appreciation,” Hopulele noted.
At an islandwide. level, the change is barely noticeable (1%), but individual markets like Ponce, Isabela, Mayagüez, Rincón, and Guayama have seen their average home prices surpass pre-hurricane levels. Property prices, fueled by slowly rising demand, are pointing to a recovering market, the study showed.
Río Grande home prices have remained virtually unchanged since last year, clocking in at $125,000, while Guayama, Caguas, Fajardo, Bayamón, Carolina, and Arecibo all witnessed increases less of than 10%
Cautious Optimism Regarding Puerto Rico
The severe recession that affected the people was discouraging in and of itself; unfortunately, the natural disaster added a tragic dimension to the island’s trajectory. Many Puerto Ricans continue to face the immediate problems of both a lack of proper housing and access to services. They also struggle with the challenges brought on by the debt restructuring process and population losses, in addition to the insidious phenomenon of “brain drain.”
Even as some improvements are made and Puerto Rico takes slow, measured steps toward recovery, the market remains fragile – just like the territory’s future. But, in a place where so much emphasis is placed on sustainability, resiliency, and finding solutions, in the words of Silvio López, president of the Puerto Rico Mortgage Bankers Association, “there’s nowhere to go but up.”