In the following interview, a panel of TOP
Mexico Real Estate experts answer several questions about projections for the market in the last quarter of 2009 and in 2010. Each member of the panel shares what they have experienced in each of their local real estate markets. While each area varies, the general tone is that 2009/2010 has and will remain a buyer's market. "There are great opportunities so long as buyers know where to search and the buyers have an experienced on site team to help manage risks and have strategies for the purchase of the
Mexico Property." - Ivan Castillo
The interview includes 3 questions and each one is followed by answers from each of the panel members.
1. How do you see your local real estate market for the last quarter of 2009 and for the coming year of 2010?
The real estate market is starting to move, of course not with the same intensity as past years, but definitely there are some good number of transactions closing. For the next year I see it a bit more stable with developments consolidating, more lenders and
Mexico mortgages coming in and more prominent purchasers arriving to the area.
I think the last quarter of 2009 will be slow for the
Cancun Real Estate market. It is typically slow September through Christmas week. I think that it will improve by the end of the year and beginning of 2010.
July was my most active month ever as far as viewers on my website; August was my second most active. It's obvious that folks interested in
Puerto Vallarta Real Estate are doing a lot of reading about living in Mexico; however, few are inquiring about real estate purchasing.
When I found out that the developer of a certain magnificent
Puerto Vallarta Condo complex was willing to drop the prices by 30-35% from last year's prices - for example, a new $835,000 condo was selling at $550,000
- I immediately sent out the details to my top 10 buyers interested in the best condos on the beach in the best area of town. I received a few responses. From my perspective the buyers are still few and far between. There are currently more than 7,000 new condos left unsold and on the
Puerto Vallarta Real Estate market; this means that there are a lot of choices.
This upcoming season in the
Mazatlan Real Estate market should be fairly exciting. With the opening of the new convention center, the ongoing construction of many new
Mazatlan Beachfront condo projects and the price reductions in our already very competitively valued market, there is great potential. Interest in Mazatlan remains high and is growing, as Mazatlan was number one in tourism for the 2008-2009 season.
Our office, Ajijic Real Estate, is the top-selling office in the
Lake Chapala Real Estate area so our projection does not necessarily reflect the market in our area, as we are doing well. Our average, last year and this, has been very satisfactory compared to years before...and we expect to do at least that well in 2010.
With the recession in the U.S. we expect to see more people from there who are interested in the lower economics of
living in Mexico, yet still being close enough to return to family and friends without a great cost of doing so.
The market is moving. A lot of rentals - at least 50% more than last year. A lot of people who first rent here, soon want to live here permanently and end up buying real estate. High class properties are also on the move; this type of client wants to see things move, so Valle de Bravo Real Estate has a lot to offer them.
The
Playa del Carmen Real Estate market has slowed down when comparing the Spring and Summer to the previous years activities. It is interesting to note that here in Playa del Carmen we have seen several years with appreciation rates in key neighborhoods above 15%. Now what is interesting is that many developers and brokers have noticed movements in the market coming from National buyers. People are stating that 70% of their sales are Mexican versus 30% now coming from non-Mexicans. We do have an interesting quantity of non-Mexicans who have seen what has occurred in their home country markets where decreases in market values can hover around 15% - 30% and many of these people expect to see similar reductions in the Mexican markets. But, the first three quarters of 2009 has not copied these decreases to the same extent, the market is soft, but some property rotation and transactions are keeping the sellers with hopes that this winter and spring will bring another new breath of air into the region. At the end of 2009 I see it remaining slow, 2010 depending on the tourism re-activation it should spur more real estate activity which will slow as in previous years during the last semester of 2010. In 2-3, and 5 years, I see a very strong demand which I explain in more details below. There is a slowdown in my region, but if you are on your toes and work with realtors who have the experience in navigating through these rough waters, (such as the brokers on this panel of TOPMexicoRealEstate Network) This could actually be a time to save a nice amount of money and set yourself up for some interesting rebounding appreciation potential.
2. Where do you see some opportunities?
There are opportunities that I’m seeing in the market, such as: i) Purchase Prices are a bit lower; ii) Purchase Prices are also negotiated in pesos; iii) the developers are structuring fractional ownership in addition to full ownership; iv) more lenders are coming in the area.
The Mexican Purchasers are very important, just in Cancun 70% of purchasers are Mexican.
There are lots of reduced prices making for some very attractive deals for both investors as well as end users. Those looking to buy a property for their second home or for their
Cancun Retirement are wise to do it now while these deals are available.
The lower priced
Puerto Vallarta Condos are in the $200,000- 350,000 range, down from the $350,000-700,000 range of pre-2008. We have some developers that are now promoting fractional ownership, which could offer some interesting possibilities.
The opportunities will be in the expected high tourist traffic, the growing interest in
Mazatlan Retirement, the current favorable pricing and the willingness of owners to negotiate. This past summer, we have seen that the smart money has already become aware of these issues and has been buying some of the nicer properties in town.
Our high season is coming up as we get lots of “snow birds,” many of whom are interested in a permanent property. The majority of our sales are to U.S. and Canadian citizens, except for Lake Chapala Land, as many lots are sold to Mexicans.
Arturo Hernandez - Valle de Bravo Real Estate
Many people with different resources available are interested in purchasing Valle de Bravo Land as a secure investment. There are a lots of ranches, 20,000 m2 and up, which offer packages, with services included such as golf club memberships, closed areas for horse riding, tennis courts and swimming pools, and have nice restaurants and bars, etc. It's an easy home - you come and enjoy living, with no other worries. Valle de Bravo Homes and Condos of this type are available for around $120,000 dollars.
In my opinion, Playa del Carmen has 5 – 10 years of continued high population growth. As many of you understand, population growth is one of the major factors that influence the market value of real estate. Recently, the state government made an announcement that economic activity within Quintana Roo is the highest or one of the highest for all of Mexico hovering near 7% thus far for 2009 in spite of the fact that the majority of states are witnessing negative growth. And in regards to tourism and the real estate industry, Quintana Roo is at the top of the list of revenue generation of which reason large amounts of public and private monies have been invested in only the past 12 months into large infrastructure projects throughout the Riviera Maya. 5 major bridges along the highways leading from the Cancun airport through Playa del Carmen, down into Tulum have been constructed during this past spring and fall. And only a month ago, another major project has been approved within the Playa del Carmen municipality to build a "second floor" highway to ease the flow of traffic coming from the Cancun-Tulum highway and the flow coming from the avenues connecting the west and east side of the city. Hospitals? Two years ago a Spanish operator opened up their doors in Playa del Carmen, another major public hospital is within 6 months of opening their doors, and now another private group with funding from the US is in the process to open up their clinic and hospital to specialize in Cardiology and Diabetes. The opportunities that TOPMexicoRealEstate is finding for our buyers and our investors are from being able to find individual urgent sales. Some individuals or organizations that have over extended themselves (many times it could be Americans with a second home in the region), are willing to take prices that are equivalent to the market value 2 or 3 years ago. These are great opportunities if you take into consideration that we have seen 10% appreciation jumps for several years. This is a lull in the market, or a dip in the market which investors need to evaluate if they feel that our region will either a) remain stagnant for the next 2 or 3 years, or b) feel that the same growth which was seen over the past 10 years will return and continue over the next 5 years. In Cancun over 20 years ago there was an explosion of growth where today it has reached a population of over 1 one million people, in Playa del Carmen there has been an explosion of growth over the past 7 years and today it has a poulation of a rough 200,000. Tulum was just starting to see the start of a repitition of history with their own explosion. So in my opinion, the odds are in the favor of a buyer of real estate so long as the buyer is able to see beyond 1 or 2 years.
3. Who do you see as the buyers, or what types of properties in your region do you estimate?
Canadian, American and Mexican purchasers are very important; just in Cancun 70% of purchasers are Mexican. In fact some developers are changing there marketing strategies and they are also focusing on Mexican purchasers.
I am still getting lots of baby boomers looking to buy for a
Cancun Retirement although they may not be quite ready to retire. They are taking advantage of the lower prices in this current market. And in Cancun there are some Mexican buyers also looking for the reduced price deals. And the big demand for my market is still beach front or very close to the beach.
My market is mainly Americans and Canadians. But the number of baby boomers buying is lower than it has been. As Ivan from Stewart Title indicated (and they are also accurate barometers of the market), 70% of the buyers are now Mexicans. They typically buy in the lower priced locations and complexes.
Our buyers are Canadian, American and Mexican. At this point, all are interested in value and our market certainly has value to offer. Our buyers have a broad gamut of interests. Nationals are looking for a second home near the
Mazatlan Oceanfront that they can use for their summer vacations, Americans and Canadians are looking for investments and
Mazatlan Retirement properties. Mazatlan is a town that has something to offer all of them.
We have a great many developments going up, especially gated communities, giving security and privacy. We expect many who are part-time residents to feel comfortable living there and being able to lock up and leave for long periods of time without undue worry about safety for their property.
Arturo Hernandez - Valle de Bravo Real Estate
Most of our clients are Mexicans living in the capital. A lot of them are looking for a second home in Valle de Bravo as a healthy way to escape from the big city. This could also be an attraction for Americans and Canadians looking for a get-away from a busy life style.
In 2009, the key buyers have been Mexicans and major developers have been Spanish. They are leading the investments all along the Mexican Caribbean. Many non-Mexicans are arriving, seeing what has occurred in their home country or have been reading the financial stress that the world has faced and are expecting similar scenarios here in Mexico. Yes, there are many areas of Mexico which are facing a tremendous slowdown given the fact that the Mexican economy is very closely tied to its northern neighbors. But, regions in Mexico, as amazing as it sounds, can also see and witness growth. The
Playa del Carmen Real Estate market is not booming. But, given that many Mexicans are moving away from larger cities (Mexico City, Monterrey, Guadalajara, Villahermosa) and looking for new opportunities or different life styles; Playa del Carmen Riviera Maya is definitely one of the top five places throughout Mexico where we are witnessing population growth. (Playa del Carmen has been registered as the fastest growing community in Latin America). So these population movements have sheltered this region from the greater impacts of the economic downturns and have made good investment havens for those who have properties in the region. As for developers, Spanish companies have been investing strongly in foreign markets and within our particular region for the past 5 years and this can logically be traced back to Spain's over-inventory challenges they have been battling over the past five years. Major Spanish hotels and residential development projects have been growing along the Mexican Caribbean corridor. Now if we look beyond 2009, 2010. With the heavy investments in our region's infrastructure, the attention on preserving the green areas by the federal government, the easy access to long distance transportation, the living comfort and all the first-world services being introduced, I see a very strong demand coming from retired Americans and Canadians. Keep a close eye on the growth from this segment and plan your investments accordingly.
Beatriz Lozano, "TOP Mexico Real Estate NETWORK; Mexico's leading specialists for finding and purchasing Mexican properties safely !" (512) 879-6546 or the company's web site www.TOPmexicorealestate.com
Up until this year the project has been implemented mostly by investment from FONATUR (Mexico s program to develop and promote tourist destinations that have greater potential) and state and regional governments.
