2022’s Top 30 Best Home Buying Locations in the Americas
- Searches for real estate-related keywords for Mexico exploded in the last 12 months, recording an impressive 60% year-over-year jump.
- This increase in interest solidifies Mexico’s reputation as the most popular location for buyers of second home.
- Despite some massive changes in search patterns, the top five most attractive locations for homebuyers remain the same as last year: Mexico, Canada, Costa Rica, Puerto Rico and Belize.
- Search volumes more than doubled in three countries in the Americas — Haiti, Chile and Aruba — pointing to growing interest.
- In five countries, including Canada, searches for vacation homes decreased.
The first six months of the pandemic were marked by confusion, frustration and lockdowns. Confinement was the word of the moment and people had no choice but to witness their once-treasured homes turn into something resembling more of a stifling prison cell.
That’s why the second half of 2020 — and especially the beginning of 2021 — saw Americans jump at the opportunity to buy a vacation home abroad: Searches for keywords like “homes for sale in Puerto Rico,” “Puerto Vallarta homes,” and “condos for sale” in Costa Rica and Belize took off. Moreover, the explosion in searches really stood out compared to 2015 and 2018, the first two years that Point2 analysts began following Americans’ interest in buying vacation homes abroad.
So, what changed and what stayed the same in the last 12 months? Are U.S. homebuyers loyal to their trusted locations or are they changing their preferences? To discover the new trends, we analyzed search volumes for more than 2,000 real estate-related keywords in islands, countries and cities in the Americas.
#1 Mexico Keeps Its Crown: America’s Favorite Destination Sees Explosion of Searches for Vacation Homes
Just like last year, Mexico remains the king of vacation destinations and locations for second homes for Americans. However, what did change was the number of monthly searches. After a 60% increase, the number of monthly searches for keywords related to buying real estate in the country surpassed 132,000 — and no wonder: In absolutely dreamy locations like Puerto Vallarta, Tulum or Cabo San Lucas, home seekers aren’t just looking for their next vacation home, but also a more joyous lifestyle and their very own slice of paradise.
In our last study, we discovered that the top three most-searched destinations within the country were Puerto Vallarta, San Miguel de Allende and Cabo San Lucas. But, in the last 12 months, the top three most desirable locations were Puerto Vallarta, Tulum and San Miguel.
#2 Despite Drop in Searches, Canada Remains 2nd Most Sought-After Location
Canada was the only location among the top three most desirable countries in the Americas to see a decrease in interest from potential U.S. homebuyers. Even so, despite a 13% drop in monthly searches, Canada maintained its position as the second-most desirable destination for second homes.
Specifically, Vancouver, BC and Toronto, ON remained the first- and second-most wanted destinations for American home seekers looking for a vacation home. (Or, let’s face it, looking to actually move there). Notably, Hamilton, ON, lost its place on the podium. This year, Montreal, QC moved into one of the three places that American homebuyers preferred as their next homebuying location.
So, if you were interested in buying a home in one of these three cities, what’s available? Here’s what the median U.S. home price ($405,000, equaling approximately $526,000 CAD) gets you in the three most desirable Canadian cities:
#3 Costa Rica Snatches 3rd Place as Country Remains Close to American Buyers’ Hearts
According to real estate agents in the area, prices for homes in the country — and especially in the southern coastal region — have been rising due to growing demand.
To that end, Tim Fenton, a broker with Blue Zone Realty International based in the southern Pacific coastal region, was quoted by The New York Times as stating that home prices in the southern coastal region had increased about 20% in the second half of 2021, as well as another 20% in the first quarter of 2022. The article goes on to emphasize that:
“[…] the country’s housing market rebounded strongly in 2021 after the pandemic lull, with prices rising in some areas thanks to tight supply and high construction costs. Foreign buyers, looking to relocate or buy vacation homes, are returning, and changes to the country’s residency laws and taxation rules are making it easier for them.”
When it comes to the most desirable locations within the country, the top three list saw some minor changes: While last year was all about Tamarindo, Jaco and Santa Ana, this year it was Tamarindo, Santa Ana and San Rafael that took the limelight.
In 2022, the Number of Searches for Vacation Homes More than Doubled in 3 Countries & Fell in 5
Although we’re not talking huge numbers (as real estate-related searches went from 680 to 1,810 per month) Haiti claimed the most significant spike in interest from American homebuyers: Certainly, an 166% increase is nothing to sneeze at.
Two more countries followed in its footsteps: Chile and Aruba saw their numbers of searches double in just one year. They stood out due to their net numbers, as well: Both countries had more than 3,000 monthly searches in 2021. Then, after 2022 increases of 130% and 116%, respectively, they had close to 7,000 and 8,000 monthly searches from the U.S. alone.
Just like every action has an equal and opposite reaction in physics, it appears that similar laws govern the domain of vacation homes: For every island where there was a spike in interest, there was also an island or a country that fell from grace. In particular, homebuyers’ interest dwindled in the last 12 months in places like Grenada, Guatemala, Ecuador, the U.S. Virgin Islands and even Canada. Clearly, Americans’ desire to find their dream vacation home or forever home just across the northern border is diminishing. Whether that has to do with climate or harsher conditions imposed on foreign buyers doesn’t really matter, because U.S. buyers have so many other options to choose from.
Like any other crisis, the pandemic led to major changes, breakthroughs and, ultimately, innovation. Furthermore, it seems that the Law of Diffusion of Innovation — explained by Everett M. Rogers and following a bell curve model— might also apply here.
The curve outlines the percentage of the market that adopts a product — or, in this case, a trend — and remote work was just the trend that everyone seemed to be waiting for. With working from home making a hasty entrance when the pandemic hit, a few lucky souls were able to simply extend their vacations: They kept working from a desk facing the ocean or the white sand beaches of some tropical paradise. But as it turns out, those lucky few became the pioneers ushering in a new lifestyle. They were what Rogers calls the Innovators.
Only the Innovators had the courage to truly embrace work from home from the get-go, and quickly turn it into work from anywhere, while the rest of us were still in a haze. The Early Adopters followed in their footsteps and completely erased the line between work and life. And then, becoming aware of the incredible advantages of work-from-anywhere, the Early Majority began looking for homes not just further from the big city, but also closer to nature.
The question that now arises is: With the world returning to pre-pandemic normalcy, is this trend approaching a tipping point? Or will buying a vacation home soon become last summer’s trend? After all, two — and arguably three — large categories of people (the Early Majority, the Late Majority and Laggards) can’t or simply won’t just get up and abandon city life for vacation life.
For more on how foreign homebuyers influence local real estate markets, we looked beyond the data for advised opinions. Here’s what our Costa Rica expert had to say on recent developments in his area, as well as what American buyers and investors can hope to find once they buy a home in another country:
Scott Cutter, Broker/Owner – 2Costa Rica Real Estate
What are the most significant changes that you noticed in your local market this year compared to how things were last year?
The marketplace here in Costa Rica continues to be incredibly robust. Since our borders reopened after the initial COVID-19 crisis, we have experienced an incredible rebirth of the destination as the core elements which define Costa Rica, its natural beauty, biodiversity, conservation, peace-loving and happy people are an elixir to the world right now. This post-pandemic growth in both tourism and real estate has also been fueled by the incredible price increases which destination and lifestyle markets in the U.S. have experienced due to all of the low interest rates and buyers investing in these lifestyle destinations. Since our real estate markets are predominantly cash markets, with incredibly low-holding cost here in Costa Rica, we didn’t experience the same peaks in values and Costa Rica has become a real value proposition in the global market.
In the first year after COVID, the low interest rates, incredible appreciation rates and also booming stock market had Costa Rica competing as an investment destination with a lot of other markets. Volume of sales here was still at an all-time high, driven by the sheer beauty, value and pent-up demand after the pandemic. Now we are seeing more and more savvy investors who earned a lot in their real estate and stock investments over the past 10-12 years who see less upside in both realms in the short- to mid-term in their traditional markets, and are now taking advantage of using those gains to invest in Costa Rica. So many of our investors are seeing Costa Rica as an amazing emerging market which provides a diverse investment opportunity with dividends in personal lifestyle, legacy and enjoyment, but also with solid rental returns in a tourism market which has tremendous growth potential along with great mid- to long-term equity gains. We are seeing buyers now viewing their investments here as more than just a lifestyle play but as strategic parts of a financial diversification plan internationally in a place that also happens to be an amazing place for them to share with friends and family.
What changes, if any, did you make in your activity and business practices to adapt to the new market conditions?
As a firm working in an international-destination market, we have invested heavily in technology and expansion of our team. We are seeing more interest than ever in Costa Rica but, with that volume comes the responsibility to educate, invest and ensure that these foreign buyers are informed and guided towards investments that will be sustainable in all senses of the word. In hot destination markets, it is easy to sell the “wow factor,” which is the setting, and the beauty here is intoxicating. We have redoubled our efforts to ensure our clients, both buyers and sellers, are informed about global and regional market trends, and also about the great deal of diversity even within Costa Rica in regards to lifestyle, amenities, tourism flow and real estate values. Ensuring our agents are trained and educated on more than just the square footage of a listing, but on the market drivers of tourism, macro economics and how global trends are affecting our local markets is a crucial element of our business identity and an adaptation strategy in what is an increasingly global real estate market place.
- To discover the most-searched destinations for Americans who were looking to buy property abroad, we analyzed more than 2,000 keywords related to real estate in combination with all of the countries and territories from the Americas.
- We used Ahrefs.com to extract the average number of searches per month, for the past 12 months (June 2021 to June 2022).
- We then ranked these locations based on their accumulated number of searches.
- For this study, we analyzed the same keywords, during the same periods of time as in previous editions (2015, 2018, and 2021) to be able to accurately assess and compare the evolution of homebuyers’ interest.
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