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Mexico s Real Estate Market Stable and Doing Fine |
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HOME >> NEWS >> Mexico s Real Estate Market Stable and Doing Fine |
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 In this part of Mexico, real estate is big business. Beyond buildings are three recently completed 20-story buildings. Up the beach a few steps are more condos with magical names – Shangri-La, Grand Venetian, Portofino and Bay Grand. Construction goes far beyond the confines of Puerto Vallarta, it is everywhere along this beautiful coast. In the places where it is not yet completed, billboards – in English – announce the imminent arrival of another opportunity to live in unsurpassed luxury and elegance. Even distant Sayulita, the charming, funky surfing town celebrated by Barry Golson in his book Gringos in Paradise, is booming with building. The supply of condos and homes for sale exceeds demand. What that means for anyone who has contemplated a second home in Mexico or retirement in Mexico is simple: A buyer's market is here or on its way.
In this part of Mexico, real estate is big business. Beyond buildings are three recently completed 20-story buildings. Up the beach a few steps are more condos with magical names – Shangri-La, Grand Venetian, Portofino and Bay Grand. Construction goes far beyond the confines of Puerto Vallarta, it is everywhere along this beautiful coast. In the places where it is not yet completed, billboards – in English – announce the imminent arrival of another opportunity to live in unsurpassed luxury and elegance. Even distant Sayulita, the charming, funky surfing town celebrated by Barry Golson in his book Gringos in Paradise, is booming with building. The supply of condos and homes for sale exceeds demand. What that means for anyone who has contemplated a second home in Mexico or retirement in Mexico is simple: A buyer's market is here or on its way.
While the number of millionaire households in America has shown stunning growth in the last few years, millionaires are still in short supply relative to the number of luxury opportunities that have been created. It's good to know, of course, that if a shortage of condos develops in Miami, there's a backup supply in Puerto Vallarta. The market here isn't likely to suffer the steep declines we're seeing in places like San Diego, Las Vegas and Miami. Here's why. Does this mean a crash is coming to Puerto Vallarta? The average condo resale price rose 79 percent from $196,000 to $351,000 between 2003 and 2007, according to Vallarta Lifestyles, whose current 265-page issue is bursting with real estate ads.
Mexican oceanfront real estate priced in dollars looks a lot less expensive to Europeans than it does to us. The appreciation isn't so stiff if you pay in euros. The euro has appreciated about 25 percent against the dollar over the same period. Here, property owners are likely to hang tough, waiting for a better market. There will be fewer distress sales. Most homes are purchased for cash. So if speculators have bought houses and condos in Mexico, they're probably well-financed compared with the folks who used liar loans to borrow their way to bankruptcy in America. Another thing to remember is that Mexico isn't blessed with our creative financing. Indeed, home mortgages barely exist.
As a result, the supply of houses for sale in PV may increase significantly in the next year or so as Californians look for a source of cash and find it in Mexico. And the majority is from California. I would not be surprised if many of the condos sold in the last few years were purchased with cash from refinancing a house in California. But there's a reason all those billboards are in English. Americans are the primary buyers in Puerto Vallarta.
Source: http://www.turks.us/ |
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International Corporate Governance
This issue explores how governance attributes are directly related to the substantial variation - across both countries and companies - in ownership, investment and valuation. |
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