A recent report released by real estate portal Point2 Homes shows that Puerto Rico’s housing market is on the path to recovery. The island is still struggling with the harsh economic conditions brought on by the recession that started in 2006 and the subsequent declaration for a form of bankruptcy. However, the housing market shows signs of improvement, with certain markets looking at some staggering jumps in home prices, according to Point2 Homes.
Puerto Rico’s seasonally-adjusted, purchase-only house price index climbed 14.01% in Q2 of 2019, compared to the same period in 2018, and individual markets are witnessing much more significant home price appreciation.
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Asking home prices in Dorado – an upscale tourist destination affected by the recession and the 2017 hurricane Maria – saw a 66% jump since 2018, heading at full speed for its pre-hurricane price levels.
Humacao, another established tourist destination, comes in second with a 39% increase in asking prices, taking a turn for the better after the prolonged recession and the hurricane took their toll.
Cities like Ponce, Aguadilla, Isabela, San Juan and Vega Baja are slowly, but surely clawing their way back to the pre-hurricane market conditions, with Ponce and Isabela actually surpassing their home prices before Hurricane Maria.
A few other cities witnessed improvement as well, albeit less dramatic. Asking prices in Mayaguez and Rincon went up 14% compared to 2018 , and in the case of Rincon surpassed pre-hurricane net figures, while Arecibo, Carolina, Bayamon and Fajardo noted more modest upticks, of 7% and 8%.
The only four cities where home prices depreciated compared to last year are Cabo Rojo (-14%), Aguada (-6%), Luquillo (-5%) and Guaynabo (-5%). These cities have not seen their home prices take off post-hurricane Maria, like the other ones, but instead continued on the downward slope they started on when recession first hit the island, in 2006.
Largely due to effective governmental initiatives – including new tax incentives and other housing stimulus measures, as well as federal aid and insurance money – Puerto Rico’s housing market seems to be improving, Point2 Homes figures show.
This is great news for an economy hit by more blows than it could ever withstand. But home price appreciation might point to a reversal of luck for the Americans who, only a year ago, were eager to find bargains on the island. In 2018, there was a significant spike in the number of investors interested in scooping up distressed or foreclosed properties in Puerto Rico. Nowadays, that seems to be getting harder to do.
Although Puerto Rico is far from being out of the woods, the case can be made for cautious optimism regarding the island’s future. Americans, as well as other foreigners looking for real estate on the island’s main tourist spots ensured the boost in demand that set many local housing markets on their course to recovery. Puerto Rico’s economy remains fragile, but the people fighting for the island’s reconstruction and rehabilitation have reasons for hope.