After being on a downward trend for several years in a row, home prices in Puerto Rico showed signs of leveling out in the first ten months of 2013. What’s more, in several important cities, the market has seen prices increase by as much as 25% compared to 2012.
Since 2006, when the island started to show the first signs of recession, Puerto Rico has been dealing with an excess of unsold houses, condos, and high-end properties, and falling home prices. Hoping to turn the situation around, in 2010, the government introduced a stimulus plan which included a series of incentives targeting home buyers and sellers alike: no property taxes for the first 5 years, no capital-gains taxes when a home sale closes, and the possibility to get a government loan for those who qualify. As a result, by 2012, the inventory dropped by more than 50%.
To see what happened with home values, Point2 Homes analysts looked at asking prices and saw that, in the first 10 months of 2013, the overall median asking price remained stable compared to 2012, although still 22% down compared to 2010.
Note: Puerto Rico’s median home price is comparable with that of Pennsylvania, although median income is almost three times greater in Pennsylvania, according to the US Census Bureau. In 2010, a peak year for the Puerto Rico real estate market, the median home price was $224,000 while in Pennsylvania it was $248,000.
What’s more, there are several key local real estate markets in Puerto Rico that have registered year-over-year increases in their median asking prices in 2013.
Ponce is one of them. The median asking price for homes for sale in Ponce is $149,000, a 25% year-over-year jump, although still 7% less than prices in 2010. San Juan is also on the list of Puerto Rican cities with a home price increase, although with a much more modest growth of 6% year-over-year.
Check out median home asking prices in other Puerto Rican real estate markets favored by foreign investors: