Coyote11 Posted February 24, 2017 Report Share Posted February 24, 2017 In January I wrote about the ridiculousness of Realtors comparing home valuations to the relationship between the Peso and USD. Now that the Peso has strengthened by 1.5% against the USD does that mean all for sale homes quoted in USD need to be increased in price by a similar amount, I don't think so? Does that restaurants and other vendors should now start to lower their prices, that would be a laugh? As I expect the Peso to settle around 16-17 to the USD in next few months it shows how ridiculous it is comparing home prices quoted in USD to the fluctuations of the Peso. It just means the would be buyer, in what ever foreign currency the own, may need more or less of that currency when buying a home quoted in USD. For the Mexican people I am glad their currency is strengthening but I don't .believe that they will see any direct benefit. For people buying gasoline and relying on USD income you have just received another 1.5% increase in the the cost and so on for other products quoted in Pesos. For those that quoted their homes for sale in Pesos or that person who says they would only buy in Pesos well you now need more of your foreign currency as you cost to buy has gone up 1.5% minimum. Maybe they now need to lower their prices by 1.5%? Glad to see the foreign currency dealers are regaining the faith in the Peso and future economic potential of the Mexican economy. Long Mexico and its fabulous people. Link to comment Share on other sites More sharing options...
ComputerGuy Posted February 24, 2017 Report Share Posted February 24, 2017 Personally I see no confusion. If a house is priced in USD, it doesn't change, no matter what the peso does. And if it is priced in pesos, same thing. The valuations have nothing to do with fluctuations in rates. Of course, the big "gotcha" here is that the houses are priced in USD in the first place. This is just an ongoing problem. The peso loses value and the "price" for buyers who work in Mexico and get paid in pesos... goes up. I'd like to see a market based on the country's currency, period. In Canada, when the dollar gets weaker compared to the US dollar, housing prices don't directly change. In Australia, their values don't change based on the Chinese yuan or the American buck, so why here? Link to comment Share on other sites More sharing options...
bigd Posted February 24, 2017 Report Share Posted February 24, 2017 You know after reading these post for several years and asking myself "are you kidding me " The thing that is missing in so many is LOGIC. I think that in a lot of place in Mexico the "market is based on the countries currency. Link to comment Share on other sites More sharing options...
Lexy Posted February 24, 2017 Report Share Posted February 24, 2017 This tendency of realtors' putting home purchase and rental costs to match the USD exchange rate started big-time about 2015 and has continued up until now, when more buyers and renters are finally saying, Hey wait a minute. Some rental agents and landlords were (and still are) actually asking (and getting) more pesos each month as the USD exchange rate increased just about every month. How is it possible for a landlord to demand to be paid more each month on a year's lease, and get it? I see that renters (I don't know about home buyers) are finally saying no to that. As a renter, I know about this, disagreed with it, and at the time (2015) didn't win the argument and I was desperate to get that particular rental. Now my lease is almost up and things have changed. No more will my landlord get full benefit of the USD/MN exchange rate on a lease renewal. If I choose to pay my rent in pesos the rent will be stated in the lease and be the same rent for the duration of the lease. Some time ago there was a big argument about this on one of our forums. I expect that some will still argue the case, no matter how unfair and illogical it is/was. Lexy Link to comment Share on other sites More sharing options...
ComputerGuy Posted February 24, 2017 Report Share Posted February 24, 2017 I'm with you. I was so glad to get out of that USD valuation for my rent. Now I'm sure my current landlord is bemoaning the fact that we signed the lease in pesos, based on the exchange rate on date of signing. Back then the rate was around 13. Link to comment Share on other sites More sharing options...
pappysmarket Posted February 24, 2017 Report Share Posted February 24, 2017 Willing landlords and tenants will continue to write leases in any currency they agree to. The tenants will always have the right to pay in pesos at the official rate. Why that annoys anyone is beyond me. Link to comment Share on other sites More sharing options...
ComputerGuy Posted February 24, 2017 Report Share Posted February 24, 2017 When I first moved here, I was quite unaware of the dollar/peso situation or how it might affect a person actually living here. Now I know better, and if I sign a lease in US dollars, shame on me. In my early days, the peso didn't fluctuate that much. Now, at .20, that's a big difference. Link to comment Share on other sites More sharing options...
Lexy Posted February 25, 2017 Report Share Posted February 25, 2017 I deleted most of my post here. Prices have risen in stores, restaurants, etc. That's to be expected. But only in a greedy real estate market are home purchases or rentals tied to the currently unprecedented and escalating exchange rate. Negotiate. Lexy Link to comment Share on other sites More sharing options...
pappysmarket Posted February 25, 2017 Report Share Posted February 25, 2017 Exactly CG. If one wants a lease in pesos just find a landlord who wants the same and a house you like and you both are in high clover. Forget about trying to force other landlords and tenants to do likewise. Live and let live. We're supposed to be enjoying retirement, not trying to force our preferences or opinions on others. Opinions are fine when they are clearly stated but when the words such as"should" or "ought" find their way in you are putting down anyone who disagrees with you. Link to comment Share on other sites More sharing options...
zerbit Posted February 25, 2017 Report Share Posted February 25, 2017 When the OP is talking about sales, my reply would be this: I bought my home from a Mexican citizen, who hired a Mexican owned Real Estate company to list it. Both of those parties listed that home for sale in USD. My payments were wired to a US based bank and held in escrow in USD. What they did with those funds after the sale is unknown to me. If a seller is retuning to the US then they will want the USD value of the home wired to their US bank. I guess if you bought it in USD, you want to sell it in USD. Makes it easier. That said, I bought my other property in another state in MX Pesos. I watched listing prices jump up weekly as the peso value to USD got weaker. More work to get your price when you are doing battle with the USD daily. Link to comment Share on other sites More sharing options...
pappysmarket Posted February 25, 2017 Report Share Posted February 25, 2017 I think Lake Chapala is ripe for a rent control ordinance. Link to comment Share on other sites More sharing options...
Al Berca Posted February 25, 2017 Report Share Posted February 25, 2017 Yup. That's what we need. Even more unenforced rules, regulations, ordinances and laws. Link to comment Share on other sites More sharing options...
Zeb Posted February 25, 2017 Report Share Posted February 25, 2017 Rent control. Horrible Idea. That was going on in New York when I lived there. I think there are still some places where the rent is controlled. The result is that some poor landlords are getting rents that are years behind the actual cost of getting any repairs done, so they can't afford to repair or improve their properties. Whenever government gets involved with finances, things get much worse. don't know why anyone would think some bureaucrats know best. Most have zero business experience and have no business interfering in our business or a private transaction and private parties agree to what they want. Free market principles work best for everyone. Costs go down when there are fewer customers and people just refuse to over pay. This is how the cost of computers and other electronics have gone down over the years. It allows for innovation and lower prices. Link to comment Share on other sites More sharing options...
pappysmarket Posted February 25, 2017 Report Share Posted February 25, 2017 Zeb, my tongue was firmly in my cheek. Link to comment Share on other sites More sharing options...
Zeb Posted February 27, 2017 Report Share Posted February 27, 2017 On 2/25/2017 at 1:50 PM, pappysmarket said: Zeb, my tongue was firmly in my cheek. Good to know. It is hard to tell on line when someone is kidding. Link to comment Share on other sites More sharing options...
Mainecoons Posted February 27, 2017 Report Share Posted February 27, 2017 A couple of observations. First, this pricing of real estate in dollars isn't unique to this area. It seems to happen where ever there's a significant foreign population, not just U.S. citizens either, such as PV, Cancun, Cabo, Rocky Point just to name a few. Second, the dollar appears to be currently overvalued against a number of currencies based on purchasing power. I've tried to figure out what a parity rate might look like and concluded it is somewhere around 15:1. I'm curious if anyone else has tried to figure this out as well and what you came up with. It is a little ironic considering that Mexico at this time is a great deal more fiscally responsible than the U.S. Clearly there are other factors at work here including the price of oil and the political atmosphere between the two nations. I expect the exchange rate to slowly fall as the big issues are resolved. Unfortunately some of the cost hikes we've seen related to the 20:1 rate most likely are here to stay. Link to comment Share on other sites More sharing options...
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