Berkshire Hathaway HomeServices Resort Report 2023 by Berkshire Hathaway Homeservices

RESORT REPORT 2023

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

Welcome As the season shifts to cooler weather around the world, sun-soaked destinations beckon us with warm nights, tropical breezes, and crystal-clear waters. In the inaugural Berkshire Hathaway HomeServices Resort Report, we explore the stunning resort destinations of Aruba, the Bahamas, the Cayman Islands, Cancun, Hawai'i, Los Cabos, and Tulum. These treasured locales have many common attributes—as well as a host of unique qualities. Together, they are home to some of the world’s most coveted beaches, enough aquatic activities to keep everyone entertained, and—most importantly—some of the best resort properties available on the global market right now. Yet, even in these paradisiacal settings, the unexpected can shatter the tranquility. Early in August 2023, the Hawaii Firestorm struck, with Maui bearing the brunt of its devastating impact. Tragically, 97 lives were lost, and thousands saw their homes and dreams reduced to ashes. This was particularly close to home for the Berkshire Hathaway HomeServices network—the Maui office was lost in the fires and members of their team also lost their homes. But the message from Alex Iskenderian, broker/owner, Berkshire Hathaway HomeServices Maui Properties, is clear: they are eager for tourism to return to normal—a sector that economically impacts their island and beyond. Our hearts go out to those who have been affected by these devastating events, and we offer our earnest wishes for a swift and successful rebuilding to the resilient residents of Maui. In the pages that follow, we will be exploring the current market trends and more in these exquisite destinations. Christy Budnick CEO, Berkshire Hathaway HomeServices

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

Table of Contents

RESORT REPORT 2023

Aruba

Bahamas

Cancun

Cayman Islands

Hawai’i

Los Cabos

Tulum

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

Aruba

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

While the end of November signals the start to Aruba’s high season, the island greets a steady number of tourists throughout the year due to its positioning in the south of the Caribbean Sea meaning that it consistently maintains warm temperatures and little rain—as well as being outside of the typical hurricane path. As is typical in many real estate locales right now, inventory on Aruba is tight, thanks to the COVID-era surge

RESORT REPORT 2023

Customers are looking for city living in the Caribbean Rudolph Kok Broker/Owner Berkshire Hathaway HomeServices Aruba Realty

in demand from buyers snapping up luxury properties—typically ranging from USD $700,000 condos to $5 million+ gated homes in golf communities—as well as a moratorium on new condo developments in the popular Palm Beach area. But that’s not to say that construction on the island has ground to a halt. In the city of San Nicolas—the country’s second largest— there are new condo developments rising, as well as in the capital and largest city Oranjestad. “Customers are looking for city living in the Caribbean,” said Rudolph Kok, Broker/Owner, Berkshire Hathaway HomeServices Aruba Realty. Since the emergence of Palm Beach as the country’s tourism capital around a decade ago, Aruba’s government has been planning ways to bring attention back to Oranjestad. Along with new housing developments, the strategy is to bring restaurants, entertainment, cafes, and more to the capital in order to make the city more appealing to visitors. Riecardi Irausquin, Director of Operations, Berkshire Hathaway HomeServices Aruba Realty, said, “Great opportunities are coming back to the island—not only on the beach strip but also in the cities.” Of the buyers who purchase property on Aruba, 60-70% are from the United States, with 20% from Canada and the rest coming from other countries, including Argentina and Italy. The island’s popularity with foreign buyers is buoyed by its “open-door policy” as well as “excellent real estate options with stable and secure return investments,” Irausquin added.

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

Bahamas November through March is typically the busy season for the Bahamas—both in terms of tourism and interest in the housing market. “People come down when it gets cold up north,” explained Jim Bernard, President/Broker, Berkshire Hathaway HomeServices Bahamas Real Estate. “Summers are typically slow, although this summer we were busy pretty much straight through.” A slight slowdown in sales had momentarily concerned Bernard, but things are looking much rosier today. “2021-22 were gangbusters years,” he said. “2023 came in like a lamb but we’re going out like a lion. We were concerned by the drop off but recently the very high end of the market has really picked up,” referring to multiple recent sales, including a US$30.8 million beach property, a US$14.5 million canal-front home, and a US$5 million land deal. All this despite the fact that inventory on the islands is making matters particularly challenging. “We still have buyers looking in that US$10 million-plus range; they are currently being patient and are waiting for properties to come up. When inventory increases, we’ll have some really nice sales.”

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

We still have buyers looking in that $10 millionplus range; they are currently being patient and are waiting for properties to come up.

According to Bernard, the two locations that buyers are most interested in are beach-front and canal-front properties, especially on the most populous island of New Providence—which measures up at 21 miles long by 7 miles wide. “We are running out of land in the popular areas, and there are no large tracts for future waterfront single-family residential communities.” said Bernard. “We are seeing condo developments arrive on small parcels of land. So there’s a lot of condo developments coming on-stream— Goldwynn has just completed a development here and they're about to launch phase 2. The Four Seasons Residences are being developed—which is a beautiful beachfront development—plus several others.

Jim Bernard President/Broker Berkshire Hathaway HomeServices Bahamas Real Estate

One of the new projects has a boat share club; buyers can opt in for a boat share with a beautiful boat and a captain which is a great solution to getting around that lack of canal-front community options.”

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

Cancun On the tip of Mexico’s Yucatán Peninsula, Cancun has long been known as a place to let your hair down—but there’s much more to the area than bars and nightlife. Vacationers and second-home owners of all ages flock to the city for its white-sand beaches, recreational activities, and range of cultural attractions. While inventory is currently fairly healthy in the area, ocean-facing properties in Cancun’s popular Hotel Zone are a rare find, with just a few streets facing the sea. Ocean-facing properties tend to sell for around US$5,000 – 10,000 per square meter, while properties facing the Nichupte Lagoon are around US$3,000 – 5,000 per square meter. Currently there are just four developments under construction on this 25 km stretch of land. The last few years have seen another area of the city emerge as a hotspot for high-end second-home buyers. Puerto Cancun, northwest of the Hotel Zone, includes canals, golf courses, marinas, shopping, and restaurants— as well as 4,000 residential properties,

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

The next year is going to be a really good one Luis Mirabent CEO Berkshire Hathaway HomeServices Cancun Properties & Tulum Properties

with more than 1,500 apartments in the area available to buy right now, which range from US$500,000 to US$5 million, according to Luis Mirabent, CEO, Berkshire Hathaway HomeServices Cancun Properties & Tulum Properties. In downtown Cancun, situated just to the west of Puerto Cancun, Mirabent noted that “on Huayacán Avenue there are more than 500 developments for sale in the range of US$100,000 to US$500,000. These are selling well—the apartments are being snapped up in order for people to rent them out to vacationers.” Another new in-demand spot is Isla Mujeres, an island just off the coast of Cancun which will see high levels of development— including over 1,000 apartments—over the coming year. In addition, Punta Sam, with its pristine beach, is currently undergoing various stages of development. “As we witness the flourishing expansion in Punta Sam, we eagerly anticipate further progress,” Mirabent said. With rising inventory and plenty of interest from overseas buyers, Mirabent is optimistic for the future. “The next year is going to be a really good one,” he said. “People are awakening from the pandemic, and they want to invest in the best places, which includes Cancun.”

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

The islands have managed to avoid much of the uncertainty that has affected other real estate markets, thanks in part to the strong global presence the territory enjoys. In fact, despite already being seen as a place where the highest echelons of society enjoy some respite, the Cayman

Berkshire Hathaway HomeServices EWM Realty

Cayman Islands

Located in the western Caribbean Sea, the Cayman Islands is a British Overseas Territory popular for its water sports, luxury amenities, and safe, family-friendly environment.

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

Islands are attracting the ultra-high-end market even more so today. “In terms of amenities, we offer very high-end products and services in tandem with safety, discretion and privacy,” explained Paula McCartney, Broker/Owner of Berkshire Hathaway HomeServices Cayman Islands. “We have evolved from ‘the Islands that time forgot’ where those in the limelight came for hiatus, to a status destination where people want to be seen, yet not interrupted. With our Cayman Kind ethos, visitors are well taken care of from the moment they arrive to the moment they leave. We are also fast becoming one of the foodie capitals of the world where a bad meal is as rare as our crystal blue waters.” Mid-November to mid-April has customarily been the islands’ busy season, and McCartney expects hotel occupancy to be near or at capacity during the coming months. And thanks to new direct flights to and from Los Angeles and Barbados, as well as direct air service to many other international destinations long established, it’s never been easier to visit the Cayman Islands. Developers are working to meet the ever-rising demand for luxury inventory evidenced by signs of construction throughout the islands comprised of a mix of projects delayed due to the COVID pandemic as well as new emerging ventures. One such venture is a development called Lacovia, where an existing property is being redeveloped to make way for a 10-story ultra-modern complex which will be the new benchmark in luxury real estate on Seven Mile Beach. “We have restricted land space and are seeing both ends of the market picking up which have us looking forward to a well-rounded season,” McCartney said.

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

Hawai’i Since becoming the last state to join the U.S. in 1959, Hawai’i has remained a hotspot for sun-soaked vacations and secondhome owners. The recent devastating fires on Maui were an insurmountable blow for residents, but they are ready to heal. Residents and businesses are starting to bounce back—but tourism dollars and other external sources of capital are much needed. Hawaii has two distinct property markets—Oahu, and the Outer Islands, including Maui. Traditionally attracting buyers from the west coast states and Japan, these days the Oahu market entices travelers from New York and Florida, as well as a large influx from Canada. Maui predominantly draws interest from the west coast and Canada, plus high-end markets around the country, like Scottsdale, Grand Rapids, and Las Vegas. And while buyers are usually after two things in particular—a view and a lanai—the property market is more varied than one might expect. “On Oahu, the market is vast,” explained Mina AngelesMontero, Director of Relocation Services, Berkshire Hathaway HomeServices Hawai’i Realty. “We have both urban and rural

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

From an appreciation standpoint, a Maui vacation rental is the best investment you can purchase. Alex Iskenderian Broker/Owner Berkshire Hathaway HomeServices Maui Properties

properties, with a lot of different price points. You can find a small studio in the mid $300,000 range, to a luxury home anywhere between $6 million to $10 million.” With inventory extremely low, contractors are getting more creative in sourcing development opportunities. “The downtown area of Honolulu is making a big push for revitalization,” said Angeles-Montero. “Developers are repurposing commercial buildings that were vacated during the pandemic, so we are starting to see building usage change.” On Maui, Alex Iskenderian, Broker/Owner, Berkshire Hathaway HomeServices Maui Properties, was very much affected by the wildfires, losing both his house and the company’s office, which has since relocated. “I’ve lived through that side of it, but I have no desire to stop doing what I’m doing—I have a huge optimism for the future.” With strict zoning rules and a dearth of available land, real estate on Maui is some of the most finite on the planet, Iskenderian says. “Property here has a value that’s priceless and will continue to rise. From an appreciation standpoint, a Maui vacation rental is the best investment you can purchase.”

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

Los Cabos A playground for Hollywood stars since the 1950s, the coastal community of Mexico’s Los Cabos has been attracting a much wider audience in more recent years. World-class beaches and golf courses, a burgeoning gastronomy scene, and ease of access from many cities in the Americas and Europe have put Los Cabos on the map for vacationers and second-home seekers across all price points. After a whirlwind couple of years, the area has fallen back into a more seasonal ebb and flow, said Ian Gengos, Broker/Owner, Berkshire Hathaway HomeServices Baja Real Estate. “In the higher end, inventory is very limited,” he said. “A lot of those sellers haven’t felt the need to divest of their properties. But in the mid-range and entry level, especially condos, we are seeing inventory bounce back to pre-pandemic levels.” The area is diversifying in more ways than one. On one end, “it’s not unusual to see US$30 – 50 million estates here,” Gengos said. “It’s becoming

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

We’ve grown into our own and have some of the most exclusive real estate in the world now. Ian Gengos Broker/Owner Berkshire Hathaway HomeServices Baja Real Estate

more of an international playground for the rich and famous and not just for Hollywood.” Yet, “further up the Pacific side, you can get ocean view condos for US$300,000 – $500,000. La Paz has some of the most beautiful beaches on the planet and condos starting at US$350,000 for a 2-bed. There are lots of opportunities for people who may have been priced out previously.” Another noticeable change that Gengos has noted is that people are staying longer, purchasing homes for secondary use as opposed to a vacation-only property. Typically a place popular mainly with North Americans—especially from the west coast—Gengos has observed that buyers are coming from further afield, including New York, Latin America, Canadian cities such as Toronto and Montreal, and Spain—the latter thanks to new direct flights to Madrid and Barcelona. “It’s an insular location,” Gengos noted. “It’s not an island but it feels like it. We’ve grown into our own and have some of the most exclusive real estate in the world now.”

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

RESORT REPORT 2023

Tulum

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

Just under a two-hour drive down the coast from Cancun, Tulum’s real estate market has seen significant growth in recent years, owing to its vast array of cultural attractions, breathtaking natural beauty— including lush jungles, and stunning cenotes (natural sinkholes)—and a focus on wellness and holistic living. The city is very much defined by its closeness to nature and a consciousness to not overdevelop the land. Properties currently

RESORT REPORT 2023

cannot be constructed over four stories, and restrictions are in place which mean developers must dedicate half a plot to land when constructing new properties—meaning, for a 500-square-meter property, a developer would have to purchase 1,000 square meters of land. Despite these restrictions, the area is still experiencing development and increased interest from buyers. The government is currently constructing an international airport which is due to be completed in December of this year and fully operational by May 2024. The new airport is set to include 18 slots for private jets. The Mayan Train, another brand-new construction project, will be operational before the end of 2023 and will connect Tulum with Cancun and other popular destinations in the Yucatán Peninsula. Because of these projects, now is a great time to invest in Tulum, according to Enrique Yañez, Sales Director, Berkshire Hathaway HomeServices Tulum Properties. He explained that for non-Mexican citizens to purchase property in the area, they typically need to follow a specific legal process that involves the creation of a trust, or a “fideicomiso.” This enables property ownership in what is known as the “restricted zone,” which includes areas within 50 kilometers of the coastline and 100 kilometers from the national borders. “As for the type of properties that digital nomads and other investors are seeking in Tulum, there are a variety of options,” Yañez added. “Many are looking for properties that suit their flexible lifestyle, such as condos or apartments that they can rent out when they are not in the city. Tulum offers a wide range of choices—from luxury, beachfront villas and condos to coastal houses and more affordable apartments in the city center.”

B E R K S H I R E H AT H AWAY H O M E S E R V I C E S

©2023 BHH Affiliates, LLC. Real Estate Brokerage Services are offered through the network member franchisees of BHH Affiliates, LLC. Most franchisees are independently owned and operated. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of Columbia Insurance Company, a Berkshire Hathaway affiliate. Equal Housing Opportunity.