June 19, 2021

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Real estate sector gains strength on the Island

The Puerto Rican real estate sector has overcome the initial hit of COVID-19 with force in recent months with figures in the acquisition of homes that have not been registered for years while sales and rental prices rise.

Industry specialists stressed to Efe on Friday how the market for the sale of homes and rent, both with rises, has managed to overcome the difficulties posed by the first months of the pandemic in which the confinement interrupted all economic activity.

The COVID-19 pandemic caused in the first months of 2020 in Puerto Rico a nosedive in the sector to practically zero activity.

The growth in activity registered in recent months has occurred both in the increase in home sales and in the rise in prices, which is also applicable to rents.

The president of the Puerto Rico Mortgage Bankers Association, Peter Torres, said that the last months of 2020 were “excellent” for the real estate sector.

Rise confirmed by statistics

Ramos’ words are ratified by statistics, since according to the Office of the Commissioner of Financial Institutions of Puerto Rico, the number of mortgages granted for the purchase of homes had not been recorded for years.

Mortgages granted for the acquisition of homes in December 2020 were nearly 30% higher than in the same period a year earlier.

During the month of November 2020, the mortgages granted for the purchase of homes were 11% higher than those of the same month of 2019.

If, for example, December 2017 is taken as a reference, the differences are even greater, since 70% more were granted in 2020.

Torres justified this strong growth in real estate activity for three fundamental reasons.

The fall in the price of money contributes

The first, obvious one, as he pointed out, is the fall in the price of money lent by banks, which currently stands at close to 3%, well below years ago.

The second, he clarified, is that the population is preparing more and more for the purchase of a home than years ago, when priority was given to other goods, such as the acquisition of a vehicle, which made it impossible to face both purchases at the same time.

The third point pointed out that it is the need that has been created among many people after the negative experience of confinement, which forced them to work remotely and which caused families to realize the need for more space in their homes.

Torres also pointed out that prices have risen, which, as he said, may have contributed to the fact that many people have chosen to remodel their homes, which has undoubtedly added value in the market.

Home prices go up

Real estate appraiser Esther Rivera told Efe that the price of homes has grown, especially at the end of 2020.

“The appraisal prices of homes are evident that they have risen compared to the past years, although it is difficult to know precisely the percentage of the increase,” he said.

Some experts in the sector explain to justify the growth in activity in recent months that it is a trend that also occurs in the United States and that it possibly has to do with people spending more time at home during the pandemic and they feel the need to move to another type of housing.

According to data provided by the economic consulting firm Estudios Técnicos, during 2020 the upward trend in the average price per square foot of residences in Puerto Rico intensified.

The average price went from $ 97 per square foot at the end of 2017 to $ 103 in March 2020 and $ 133 last September.

Those prices, however, are far from those of late 2007, when the average was $ 140 per square foot.

The good performance of the sector in recent months is confirmed by the arrival on the island of the real estate company eXp Puerto Rico, affiliated with eXp World, as part of a global expansion strategy.

The director of eXp Puerto Rico, Ivelisse López, told Efe that “there are many opportunities to grow” on the island and that this is an ideal time for international investors to set their sights on Puerto Rico, which will undoubtedly help an increase in activity, prices and in general an improvement in the economy.

“There has been an increase in rental prices, although there is a shortage of inventory,” said López.

He said that it is clear that COVID-19 made many people want to own their own home and that has helped the market experience an improvement in activity.

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