Jump to content
Chapala.com Webboard

Archived

This topic is now archived and is closed to further replies.

Ajijic

A Factor In Real Estate Sales in Mexico

Recommended Posts

Another interesting factor in Real Estate sales here is the recent upsurge in the U.S. dollar. This means that materials are going to cost more, at least in the short run, while the Eurozone gets hammered. Which means........

That dream home is going to cost you more, not less.

A stronger $US (today more than 14 pesos to $1) means building local will cost LESS, not more.

Share this post


Link to post
Share on other sites

A stronger $US (today more than 14 pesos to $1) means building local will cost LESS, not more.

But prices on imported materials will rise.

Share this post


Link to post
Share on other sites

But prices on imported materials will rise.

That would be materials imported from the US. The US has risen against many currencies, including the Canadian dollar. So, it will hurt US exports, but aren't there alternatives for most building materials used here? What are the materials that Mexico depends on, imported from the US, required for building.

I do not know how it will impact buying power for Americans wanting to purchace (though it sounds like a good thing for them), but I know a few Canadians who are putting home purchases on hold until the Canadian dollar improves..... and Canadians are a factor in Mexican Real Estate in this area.

Share this post


Link to post
Share on other sites

That would be materials imported from the US. The US has risen against many currencies, including the Canadian dollar. So, it will hurt US exports, but aren't there alternatives for most building materials used here? What are the materials that Mexico depends on, imported from the US, required for building.

I do not know how it will impact buying power for Americans wanting to purchace (though it sounds like a good thing for them), but I know a few Canadians who are putting home purchases on hold until the Canadian dollar improves..... and Canadians are a factor in Mexican Real Estate in this area.

Let's say you want American style kitchen or bathroom cabinets? Custom made here=expensive.

Share this post


Link to post
Share on other sites

Let's say you want American style kitchen or bathroom cabinets? Custom made here=expensive.

Wrong, custom made here = inexpensive. What are you thinking? Fabulous cabinet work is available here at a fraction the price of NOB. The strong $ makes them even less costly.

Share this post


Link to post
Share on other sites

The vast majority of a home's building cost is labour, concrete, building bricks and profit to builder. For a typical Mexican home almost nothing comes from the US.

What is happening for purchasers with pesos, re-sales prices have gone up about 25% dues to exchange rates in a very few short months with the ridiculous issue of pricing homes in US$. A wise Mexican, Canadian etc should simply step back from any home priced as such.

Here is where Canadians who want homes outside of Canada are buying:

http://www.moneyville.ca/article/1091048--cross-border-home-shopping-for-the-long-term?bn=1

Share this post


Link to post
Share on other sites

No doubt if you want to split your time between Canada and the U.S., Florida and other sunbelt areas are a screaming bargain right now. Las Vegas and Phoenix are even cheaper. But none of them have a year-round climate.

Carrying costs such as property taxes and condo fees are also much higher in the U.S.

When are you moving to Florida, John? :)

Share this post


Link to post
Share on other sites

Dan I bought a new house in SMA, but in pesos and for much less than there. :-) Interesting is that the building material is sillar. For anyone building I would recommend looking into it. The volcanic material is carved into blocks about 10" x 20" and has good insulating properties and comes in various shades. Plus, due to size of the blocks less labour to build.

Friend's home in FT Myers property taxes are $600 a year (based on current market value) and homes cost dramatically less than in lakeside. Plus much easier to rent there full time due to all the foreclosures. One Canadian friend has bought 16 homes with cash in Ft Myers and all rented full time giving her a very good return with rents between 600 and 1100 and purchase priceincluding updates typically 35K.

So, I understand why thousands of Canadians look at Florida especially with the idea of returning to Canada in the summer, English language, less crime, an easier drive / flight back to Canada, mortgages readily available and home prices half and often less in this market.

But the point of this thread is why homes may not be selling to expats in Mexico.

On a side note... imagine a person buying a house priced in US$ with pesos 4 months ago and closing today with the exchange rate of 14 to 1.... yikes. Or imagine homes in the US or even Canada priced in MXN pesos? lmao

Share this post


Link to post
Share on other sites

That doesn't change the climate negatives. However, if your goal is investing for rental, the U.S. is a screaming deal right now. As a real estate investor, I've not had great results with absentee ownership. You'd be amazed at how much damage how quickly bad renters can do to a property. And although purchase prices are low, repair costs are not. It is very hard to find property managers who will really watch your properties the way you would.

The other thing you have to look out for is how hard it is to evict non-payers. In some places, it can take 6 months or more. Believe me, after 40 years of owning rental properties, I can assure you that it is hardly risk free or a sure thing investment.

Sales are slow here, there's no doubt about that. Personally, I think that all the narco publicity has a great deal to do with that. Far too many sellers here of less than stellar properties simply fail to prepare them for showing properly and they ask too much money for them.

When I compare prices here, I look to places around the world with similar and highly desirable climates. Compared to southern California beach communities like San Clemente where my brother lives, things are still pretty cheap here. His climate is nearly as good as ours, though they do have to heat in the winter.

Canadians are in the cat bird seat when it comes to real estate these days. Their prices are still high, their homes are still selling and the Loonie is high too. However, all things change and I'd be concerned about a RE bubble in Canada. Good time to cash out and invest somewhere else.

Share this post


Link to post
Share on other sites

Dan agree with much you say but not time for Canadians to cash out. There an open mortgage is 2.2% and latest stats this week is that prices still rising. As soon as interest rates go up and not likely for a couple of years or so then market will at least soften. People buy based on monthly payments not price of house so right now one gets a lot of mortgage and therefore house at 2.2% interest. Some I know simply kept payments the same as when mortgages were 5% and are quickly paying off their homes at the current low rates.

Share this post


Link to post
Share on other sites

Remember that when RE bubbles unwind, they tend to do so very quickly. It is difficult to time any market and than includes RE.

If the Chinese stop buying in Vancouver because their economy is going south rather quickly, watch how fast those crazy prices unwind.

Share this post


Link to post
Share on other sites

It would be interesting to actually see what homes have sold for. I've watched the market Lakeside since Jan. 2009. There are homes still on the market today at the same price I saw them in 2009! Homes I physically looked at and liked in Jan. 2010 at @$795K eventually were on the market for <$599K. Many, if not most of the homes we liked in 2010 are still on the market...some at the same price...some hugely reduced...but clearly not selling. I just checked and there are 503 residential listings in Chapalamls.

When I first considered moving we very quickly decided San Miguel Allende was way too expensive. A recent look showed 328 homes at over $1M!!!! That's not the price range we're looking in, but it seems like a huge number in a town that size. On the other hand, homes in the $500 to $700K range are suddenly looking much more appealing. Many say "reduced" on the listing...again showing things aren't moving, but I'm becoming more intrigued with the quality and variety of what's available in very close in and walkable locations in San Miguel. Almost anything that's not close in in Ajijic will require a car, and the Carretera sure isn't going to be getting any wider. These are definitely considerations. Another thing I've noticed is the lack of razor wire and electric fences in the listings in San Miguel. What does that say about the area?

We were initially convinced that Lakeside was THE place for us, but I'm starting to think perhaps we'd be happier in the lively core of San Miguel.

All of these are purely personal choices, but as the market has stagnated in both areas, and there now seem to be some bargains to be found in San Miguel...I'm thinking we need to reconsider...and at least give San Miguel a look.

I'll probably hear from a few of you who I know have moved from one of these locations to the other...and are perfectly happy for having done it. I'd love to hear more about your reasons...!

Those of you who advocate renting for a while to be sure probably have the right idea. Seems no matter what we might buy either place...we'll probably be stuck with for a mighty long time.

Share this post


Link to post
Share on other sites

..... Seems no matter what we might buy either place...we'll probably be stuck with for a mighty long time.

Why would you buy anything that you'd feel "stuck with".

Being here a long time is OK with many (if not most).

Share this post


Link to post
Share on other sites

I think that whether one buys here or in the U.S., one should expect to live in it for an extended time or indeed it is much better to rent. If you recall, even when RE markets were more normal, neither boom or bust, when one took into account buying and selling expense, it easily required 6 years to break even. In current circumstances, that could now be longer though even bad markets have good sectors or locations.

Share this post


Link to post
Share on other sites

So Myron - rent, rent and rent until you're sure where you want to be.

Ditto Ditto Ditto

sounds if you have done your research and looking for a magic bullet..there is none..... come down and rent or low ball the asking price and maybe you will get what your looking for

Share this post


Link to post
Share on other sites

×
×
  • Create New...