Espinosa, who was studying in Auckland, was in Whangarei for a summer break.
"Yes I saw him go under ... it's difficult to talk now, and we're with Victim Support," said the friend yesterday, who did not want to be named.
Espinosa was swimming with friends but went under the water while swimming and failed to surface.
The Police Dive Squad recovered a body at Whangārei Falls believed to be that of Espinosa.
Police have yet to formally identify the victim.
The area, a 10-minute drive north of Whangarei, has been closed since Friday afternoon while the search took place.
The scene was blessed yesterday and the site has been reopened to the public.
There have been a number of deaths at the 26m-high waterfall.
In 2011 a teenager was found on rocks at the bottom of the falls and two other teens also died at the falls on Christmas Eve in both 2002 and 2004.
Police and Victim Support are working with the family of the victim.
Meanwhile, another person has died in a water-related death in Northland this weekend - bringing to at least 12 the number of water-related deaths in New Zealand in the past three weeks.
In the latest incident, a fisherman has died in the Bream Bay area south of Whangārei.
Police were called to Ruakaka after the water incident this morning.
They were called to the scene at 7.06am after a fisherman appeared to get into difficulty while retrieving fishing nets.
The man died at the scene.
A St John spokeswoman said another person was transported to Whangārei Hospital in a moderate condition.
