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Ricky
Junior Nomad
Posts: 56
Registered: 4-7-2014
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Property Values?
Thinking about purchasing a condo in the Rosarito area before the current crisis. Now, I love Baja, and chomping at the bit to return. BUT what does
the group here think of the pre - closure prices vs the current market? I’m sure prices should drop, but by how much? 10%, 25% 50%? Inquiring mind.
Thanks in advance!
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RFClark
Super Nomad
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Mood: Looking forward to 2024
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Prices will probably increase this fall not go down. There seems to be a lot of interest.
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mtgoat666
Select Nomad
Posts: 17289
Registered: 9-16-2006
Location: San Diego
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Mood: Hot n spicy
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Quote: Originally posted by lencho  |
That surprises me in face of the current uncertainty; where are you seeing this interest? Are you in real estate? |
economy is in dumps, usa unemployment is at 25%,... mexico seems to be in same boat as usa,... y'all be dreaming if you think demand will be there to
sustain prices!
economy will take years to recover
Woke!
“...ask not what your country can do for you – ask what you can do for your country.” “My fellow citizens of the world: ask not what America
will do for you, but what together we can do for the freedom of man.”
Prefered gender pronoun: the royal we
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mtgoat666
Select Nomad
Posts: 17289
Registered: 9-16-2006
Location: San Diego
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Mood: Hot n spicy
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| Quote: Originally posted by Ricky | | Thinking about purchasing a condo in the Rosarito area before the current crisis. Now, I love Baja, and chomping at the bit to return. BUT what does
the group here think of the pre - closure prices vs the current market? I’m sure prices should drop, but by how much? 10%, 25% 50%? Inquiring mind.
Thanks in advance! |
who knows???
it's mexico, property title is very nebulous (a crap shoot), do not invest more than you can afford to lose!
Woke!
“...ask not what your country can do for you – ask what you can do for your country.” “My fellow citizens of the world: ask not what America
will do for you, but what together we can do for the freedom of man.”
Prefered gender pronoun: the royal we
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Don Pisto
Super Nomad
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Registered: 8-1-2018
Location: El Pescador
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Mood: weary like everyone else
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rent something and wait it out......nothing but uncertainty out there
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RFClark
Super Nomad
Posts: 2331
Registered: 8-27-2015
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Mood: Looking forward to 2024
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Personally, I think that people are planning to get out of the U.S. before the end of the year. South of San Felipe there have been a number of beach
houses with offers recently. During and just before the lockdown.
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chuckie
Elite Nomad
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Location: Kansas Prairies
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What PT Barnum said.....
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BajaMama
Super Nomad
Posts: 1106
Registered: 10-4-2015
Location: Pleasanton/Punta Chivato
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Mood: Got Baja fever!!
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If I recall correctly, in the Punta Chivato area prices tanked in the mid to late 2000s as a result of the great recession. It always seemed to me
that Baja had more tourists/temporary-permanent residents prior to 2007 but never really recovered. There were so many little shops that never
re-opened in Mulegé and there seemed to be more people overall. Maybe Americans just drifted further south? I am wondering the same. What will
happen to property values in BCS and Baja as a result of covid 19? Will the lack of HQ medical care in the face of a deadly virus be a deal breaker
for older Americans wanting to spend time in Baja?
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wilderone
Ultra Nomad
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Check out the listings online - see how long they've been on the market. There are local realtors you can talk with to get their opinion. If you've
got a few months, check the number of listings now, and compare a month from now - compare with new listings, and see if the prices came down. If a
unit has been on the market for a year, probably willing to negotiate. Also might be some long term rentals available instead (Las Gaviotas?).
Consider that once you buy, that's your primary go-to destination. If you like Baja generally, you might want to roam - not spend all your time in
Rosarito. Airbnb rentals are popular - some seasonal homeowners like a house-sitter for months at a time. Thing is, there are options without
incurring the full financial responsibility. Or buy a trailer of some sort - park it for a couple months at a time somewhere.
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Lee
Ultra Nomad
Posts: 3455
Registered: 10-2-2006
Location: High in the Colorado Rockies
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| Quote: Originally posted by Ricky | | Thinking about purchasing a condo in the Rosarito area before the current crisis. Now, I love Baja, and chomping at the bit to return. BUT what does
the group here think of the pre - closure prices vs the current market? I’m sure prices should drop, but by how much? 10%, 25% 50%? Inquiring mind.
Thanks in advance! |
Too many variables. Are you planning to f/t? How well do you know the area? 2nd home? Have you written off the rest of Baja?
My advice: rent, house sit, hang out in Rosarito. Do not buy right now. Baja RE is effected by RE up North. No one knows how all the BS
right now will play out. If anything, I'd say prices will come down, may be way down, before going up.
Resale, in my opinion, is an iffy situation. Unless you're in for the long haul, getting your money out could take a long, long time.
US Marines: providing enemies of America an opportunity to die for their country since 1775.
What I say before any important decision.
F*ck it.
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sd
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California -
Depression Era level of unemployment.
Deferred mortgage payments. Deferred rent payments.
Failure of restaurants and business is just starting.
Open ended Pandemic.
We will see large reduction of values here, and it follows to Baja. Yours is not an investment, but a lifestyle choice. If you stay a minimum of 6
months a year, go enjoy if you can afford to. Renting would be the best start.
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ncampion
Super Nomad
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Registered: 4-15-2006
Location: Loreto
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Mood: Retired and Loving it
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Don't think I could give away my house in Loreto right now or in the foreseeable future.
Living Large in Loreto. Off-grid and happy.
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BajaNomad
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Thread Moved
5-12-2020 at 02:00 PM |
thebajarunner
Ultra Nomad
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Location: Arizona....."Free at last from crumbling Cali
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Last time we had a big economic downturn I pursued several possible deals in Baja.
Strangely, even with a serious down market, and values seeming to plummet, the asking prices went up for lots of stuff I was looking at.
There was quite a bit of discussion on this board about the illogical trends of pricing, given the slack times.
I am no expert in Mexican real estate. Owned a lot in La Mision years ago, but when I discovered the the ejido issues were so complex I gave it to a
good friend down there. Happy to make him happy.
As always, in tough times, "cash talks" But I would not count on a major downturn in prices if history holds. Even in a slack market with little
sales, prices tend to stay up in Baja.
I have been involved in major residential development in Central Cal for forty years, and right now, even in hard times, we are not cutting prices,
and we are selling a couple houses a week.
Bottom line is real simple.....?quien sabe?? Who Knows??!!
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Lee
Ultra Nomad
Posts: 3455
Registered: 10-2-2006
Location: High in the Colorado Rockies
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| Quote: Originally posted by thebajarunner | Last time we had a big economic downturn I pursued several possible deals in Baja.
Strangely, even with a serious down market, and values seeming to plummet, the asking prices went up for lots of stuff I was looking at.
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Prior to '08, Todos Santos' market was a feeding frenzy. Cash in hand buyers lining up. Then it dropped off drastically. No one was buying
in the same way. Still, prices didn't drop. Remained the same and even appreciated.
Don't know the percentage of cash vs. mortgage buyers. I believe most buyers in the Todos area are p/t and buying a second home. Think most
sellers know these buyers have cash.
US Marines: providing enemies of America an opportunity to die for their country since 1775.
What I say before any important decision.
F*ck it.
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BajaMama
Super Nomad
Posts: 1106
Registered: 10-4-2015
Location: Pleasanton/Punta Chivato
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Mood: Got Baja fever!!
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It will be interesting to watch. We will either re-build or buy an existing home in 2-5 years. Hope to spend 3-6 months a year. That's the current
plan anyway.....
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Alm
Ultra Nomad
Posts: 2716
Registered: 5-10-2011
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| Quote: Originally posted by Lee |
Prior to '08, Todos Santos' market was a feeding frenzy. Cash in hand buyers lining up. Then it dropped off drastically. No one was buying
in the same way. Still, prices didn't drop. Remained the same and even appreciated.
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I remember selling my condo in Canada in 2011, well after the crisis.
Prices went up to pre-2008 levels but nobody was buying. Sales volumes were lower than at the bottom of 2008. Home is sitting on the market 9 months -
this is a heck of a time in a big city, you take it off the market and re-list next year. If you can wait.
Those who couldn't wait, lowered the price. Occasionally an attractive property was causing a bidding war but mostly it was competition of sellers.
Often several condos on sale in a low-rise building, one drops the price and 5 others drop lower yet. On the average, detached homes dropped by 1%,
condos by 7-8% and there was a huge disparity btw the majority who didn't drop (and didn't sell for a year or two), and those who sold with 15-20%
drop. With renovations, realtors commission and if there was mortgage in the picture, those who bought less than 5 years earlier had lost ~30-60K.
Cash buyers fared better.
This lasted 2 or 3 years, until 2014. If your time horizon is 10 years or longer you'll probably get your money back.
[Edited on 5-16-2020 by Alm]
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Hook
Elite Nomad
Posts: 9006
Registered: 3-13-2004
Location: Sonora
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Mood: Inquisitive
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The ASKING prices in San Carlos Sonora, after the 2008 downturn, stayed flat or continued to rise, slightly; much to the surprise of many of us.
I concluded there were a couple factors involved in this. Maybe some conclusions can be drawn from this for other areas.
Probably the foremost reason had two related factors.
One, the sellers purchase of the home was not financed; they paid cash for it, probably before the run-up in prices of the early 2000s. So, no
mortgage payments to service.
And, two, real estate in Mexico is actually very cheap to hold onto, while you wait to get your price. Even combining the cost of a fideicomiso,
property taxes, utilities and maybe a gardener, it's dirt cheap to hold onto property, compared to the US. So, there isnt a monetary incentive to
lower your asking price. The house isn't costing you that much to hold onto.
And, since the vast majority of homeowners in THIS area, still owned a home in the US or Canada, they always had a place to retreat to. They didnt
have to have the cash from the sale of the 2nd home, to continue living elsewhere. And that second home in Mexico was still a fun, cheap place to
vacation. A further reduction in strong motivation to sell.
All that SEEMED to change by about 2010. I say SEEMED, because, it was (and still is) difficult to get hard and fast statistics on what a home
ACTUALLY ENDED UP SELLING FOR. While an MLS of sorts was created by the real estate agents in town, it never listed (and still doesnt, I dont believe)
WHAT A HOME ACTUALLY SOLD FOR. You had to get that by word of mouth from friends, neighbors, friendly RE agents, etc. An outside shopping buyer might
have trouble getting that info.
Naturally, if homes were actually being sold at a large discount to the asking price, that isn't something that real estate agents would want to
reveal. They are mostly employed by sellers and their commission is based on the selling price, of course. If a buyer was unaware that most homes were
actually selling for 60% of the posted asking price, they might offer full asking price. Or maybe only 10% less.
Indeed, word on the street from about 2010-2014 was never offer more than 60% of the asking price. In many cases, it worked.
Now, a strong motivating factor to sell was coming into play. In a retirement area like San Carlos, people seem to come here in 10 year waves. It
started in the 70s, and accelerated rapidly in the 80s and 90s and early 2000s. Even right around the 2008 downturn, there were a large number of
persons who retired (myself included) and moved to San Carlos. That certainly helped prop up RE values, during that downturn.
Corresponding to this are people who are growing too old to be away from their health care systems in the US and Canada. Age takes it's toll. So,
there seemed to be a corresponding exodus at those ten year intervals. Some who retired before age 60, might actually stay for TWO ten year intervals
(or a portion of the second period).
But the horrific news stories of the cartel violence and the collusion by many levels of the Mexican government, began to really take its toll on
potential buyers around 2014, or so. This was coupled with the aging baby boomers starting to return home in greater numbers than the Gen X people
could replace them.
This downturn, due to the virus, could easily exceed the "Great Recession". I would not be buying right now, unless you are getting RE at a deep
discount to the asking price. One never knows the level of desperation to sell in a sellers mind. Health reason? Travel restrictions? Cartel violence?
Increase in property crime, due to incompetent policing?
Unless a property is very unique in some way, I think offering no more than 60% still makes sense. Especially in properties (like many in BCS) that
require a flight or a multi-day drive on a single lane road to get to. Who knows what the airlines are going to do after all this? Who knows what
routes they will cut out?
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Ricky
Junior Nomad
Posts: 56
Registered: 4-7-2014
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Thanks to everyone for their insight!
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CasaMaximus
Banned
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Registered: 9-17-2020
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I know in Todos Santos they have gone up, people from the North working from “home”. Most Bay Area tech firms do not care where home is. Houses
that were $250-$300k are now $350-$400k.
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RocketJSquirrel
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Registered: 8-3-2019
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I agree. The house across from my place was just listed for a ridiculous price.
People are bailing out of urban USA looking for safer places. I read an article yesterday where real estate prices in Aspen Co, for example, are up
440% over last August.
These days you can work from anywhere. Why not live near decent people? I know I do.
ncampion wrote: We will see large reduction of values here, and it follows to Baja.
I don't agree. Mexico is actually more stable than the USA. People here are used to adversity. They don't expect their government to solve every bit
of frustration they have. They know it won't.
Smart people are making the move.
Nonetheless, we are all full of chit and no one can really predict where all this goes. If you really think you can...
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