BajaNomad - Real estate sales sliding

Real estate sales sliding

makana.gabriel - 11-18-2008 at 02:49 PM

Real estate sales sliding

BY GARRETT NASWORTHY

The News

Brokers from abroad have seen high-end and large commercial property sales in Mexico stagnate in the past several months, with some saying they are now selling nothing.

"I have listed mid- to high-range properties in Acapulco, Cancún and Mazatlán that have been receiving many little bites and inquiries, but no one has been willing to make a purchase," said Richard Miranda, a broker at Uptown Real Estate Group in Houston. He added that properties in the border and traditional areas of development for foreigners are all susceptible.

Miranda said before the current downturn in sales his firm would close at least 4-5 properties per month.

"Now we have seen a definite downturn in closes, not many people are buying," he said.

Last week, the Mexican Association of Real Estate Professionals, or AMPI, said it had revised down estimates for real estate sales in 2008 due to poor high-end and border-zone sales.

AMPI expects sales to rise 5 percent year on year in 2008. It had predicted 17 percent growth at the beginning of the year. The border zone has seen sales drop 50 percent this year versus 2007, AMPI said. Particularly hard hit were coastal destinations.

"What has been a real surprise is that coastal areas have been hit particularly hard, even ones not frequented by U.S. buyers," said Sergio Gómez Rábago, president of AMPI's chapter covering the Mexico City metropolitan area. European buyers are as thin on the ground as U.S. buyers, he said.

The organization's national executives went as far as asking for government assistance and investment late Thursday, saying that investment was direly needed to promote sales in its high-end developments.

Woooosh - 11-18-2008 at 03:01 PM

Sliding? Now that's an understatement! Crashed, stalled, anemic, dead are better.

The current security problems were already an issue when they made the 17% growth predictions- they were just stuck on stupid and forgot to put the negative sign before the 17, that's all. The world econmy is crashing- Mexico will fare worse becaue of the additional challenges beyond the economic ones.

tjBill - 11-18-2008 at 03:10 PM

So I guess its not only the Gringo market in Baja that's having trouble. Its the entire local and commericial market.

CaboRon - 11-18-2008 at 03:24 PM

You can always sell if you lower the price .....

And keep lowering the price until you have a buyer ....

Simple reality ....

And you may not make any money on the investment ....

But, if you lower it enough you will eventually sell ...

It is simply not worth what you think it is anymore ....

Get real ...... :cool:

CaboRon

gnukid - 11-18-2008 at 03:32 PM

On the other hand, their are many excellent properties in Mexico which have passed hands between two individuals at fair prices, with excellent values all over.

I think the market for agency sales is not a good market statistic since far more transactions occur without so called 'agents'. I understand that many sales are taking place in Baja just not silly over-inflated prices on pre-built sales. For those who have a home finished and who would like to sell at a reasonable price the market is strong, since these homes represent a good value for retirees and also for Mexican Nacionals who make up a majority of visitors to Baja.

bajaguy - 11-18-2008 at 03:37 PM

I was at the Baja Country Club (Ensenada) last weekend and noticed 4 new homes in various stages of the construction process, and was told that there will be two more homes started within the next two weeks. Still great values at good prices to be had

Acuity - 11-18-2008 at 03:59 PM

Maybe there's just a lag in BCS, but there's still activity here. In fact, sales of houses YTD are >500% up on last year. Goodness knows where these people are coming from - they must live in a different economy to that which I inhabit!

CaboRon - 11-18-2008 at 04:05 PM

Quote:

Originally posted by Acuity
Maybe there's just a lag in BCS, but there's still activity here. In fact, sales of houses YTD are >500% up on last year. Goodness knows where these people are coming from - they must live in a different economy to that which I inhabit!

What does that mean ?

>500% literally means less than 500%

A little too obtuse for me.

CaboRon

tripledigitken - 11-18-2008 at 05:09 PM

Quote:

Originally posted by CaboRon

What does that mean ?

>500% literally means less than 500%

A little too obtuse for me.

CaboRon

CaboRon,

Correction...........it is just the reverse:

>=greater than
<=less than

Agree the concept of sales that high seems obtuse to me. :lol:

Ken

Barry A. - 11-18-2008 at 05:23 PM

My ex-wife is a broker/agent of high-end resort properties in the Utah/Colorado area-------she says as of about 5 weeks ago the high-end market has gone "dead"--------"kaput".

Hopefully a temporary phenominae (sp?)

Barry

Pescador - 11-18-2008 at 07:51 PM

A friend who is in the high end sales told me that it started out pretty slow and definately tapered off from there. :bounce:

Bronco - 11-18-2008 at 08:11 PM

Quote:

Originally posted by gnukid
On the other hand, their are many excellent properties in Mexico which have passed hands between two individuals at fair prices, with excellent values all over.

I think the market for agency sales is not a good market statistic since far more transactions occur without so called 'agents'. I understand that many sales are taking place in Baja just not silly over-inflated prices on pre-built sales. For those who have a home finished and who would like to sell at a reasonable price the market is strong, since these homes represent a good value for retirees and also for Mexican Nacionals who make up a majority of visitors to Baja.

I'm sorry but could you give a real,concrete example. I still have trouble getting my friends down for a visit. Some are retiree status with a few shekels, love a good deal and they think we are out of our trees. 11yrs here and love it! 30+years of traveling all of Mexico.

greybaby - 11-18-2008 at 10:10 PM

We've had to put our house in Cantu in the market since it's just too hard for us to maintain from a distance. And let me tell you, it's a steal. Less than we have in it and a large corner lot. Someone will get a great deal. If retirees have lost in the stockmarket (who hasn't???), they can buy in Baja and have money left over. If we weren't working, I'd just head right back there. Especially this time of year.

Hook - 11-18-2008 at 10:16 PM

Quote:

Originally posted by bajaguy
I was at the Baja Country Club (Ensenada) last weekend and noticed 4 new homes in various stages of the construction process, and was told that there will be two more homes started within the next two weeks. Still great values at good prices to be had

Maybe prices have come down enough for some of the locals to afford them. Maybe builders are desperate and cutting prices.

Is Baja Country Club a gated community? That might be a big draw, given the situation in northern Baja.

bajaguy - 11-18-2008 at 10:42 PM

Quote:

Originally posted by Hook

Quote:

Yup, gated and 24/7 security.....off the beaten track, quite peaceful

slimshady - 11-18-2008 at 10:54 PM

Heard from my friends in Los Barriles that the market is dead. If you are lucky to have money this would be a great time to buy a lot. I just started construction on my lot in Los Barriles and am taking advantage of the low peso to dollar value as well as cheaper materials.

I have yet to build my home in the Corridor yet, just waiting for the construction costs to come down from 200 per square foot to about 160 per square foot. Southern Baja ballooned just like the U.S. and are not at its bottom yet. The market was supported by European and Asian investors who thought they were immune from the U.S. turmoil. But now since we are in world recession the baja real estate boom has difinitely subsided.

Pancho - 11-18-2008 at 11:45 PM

Isn't Los Barriles the most expensive community in Baja? Have you seen the inflated values? Perhaps the fact that few people can get large loans make high end investment unlikely though the under $200,000 is more likely to see action since liquid cash in smaller amounts is more prevalent with few strong stock market and money market options available. If you had 200,000 you need to put it somewhere and there are few options.

country club memberships

buddha - 11-19-2008 at 07:46 AM

Quote:

Yup, gated and 24/7 security.....off the beaten track, quite peaceful

Can someone just buy a golf membership and what do they cost nowadays?

bajaguy - 11-19-2008 at 07:56 AM

Yes, they do, but I do not know the fee. I checked their web site, but only daily (round) fees posted. Maybe Lizard Lips will chime in as he is a regular there.

Homes with lots are starting at $153,000(USD)

bajacountryclub.com

[Edited on 11-19-2008 by bajaguy]

cftlet - 11-19-2008 at 10:04 AM

Is that 200 a square ft price fairly standard or is Los Barriles just really over priced? I guess our dream of having a place on the east cape is getting a little dimmer.

oldjack - 11-19-2008 at 11:01 AM

Prices in Los Barriles seem to be higher than any of the surrounding communities... the builders offer "built to U. S. standards"(you can bet that is a very rare occurence) ... for the past two years I have noticed that folks looking to have a place in the East Cape have ignored the price and just looked at how much money they have to spend.... there are a large number of trophy houses in Los Barriles/Buenas Aires and there are many more under construction.... a local builder offered me a lot in Cardinal for $280,000(usd) that was just under an acre... he was hyping the remoteness and the pleasant village... he ignored that the road is closed several times a year and you get isolated... maybe this would be a good time to sell my palapa and move to San Bartolo...

slimshady - 11-19-2008 at 04:31 PM

The going construction rate in Los Cabos is betwen $200-$350 per square foot. The high end finishes clearly demand the higher limits. In high I mean show case homes and not the ones designed for everyday use with nice finishes.

In Los Barriles the going rate is about $120 to $130 per foot. that is a fair value for contsruction I think for the entire region.

I talked to one guy over at Zoe's and he said he wouldn't touch ofr less than $250 in Los Cabos. That was last year. This year he would probably do it for $200, but I will not him the chance.

The prices clearly got out of hand in the past because a lot of people had money, now that the economy is dead, deals need to be made and don't pay until you get a good fair one.

Osprey - 11-19-2008 at 07:26 PM

Oldjack, you are point on. The "beach or nothing" mindset gringos bring down, realtors encourage and hype has brought us all to where we are today. A nice place in San Bartolo might cost you $50,000 for house/lot/mangos/guavas/tranquility --- need the beach, need to fish, swim, picnic -- it's all free thirty minutes south and east. All bets are off as soon as some canny realtor reads more things like this, goes inland a few kilometers and ruins what's left.

bajaguy - 11-19-2008 at 09:31 PM

Quote:

Originally posted by buddha
Yup, gated and 24/7 security.....off the beaten track, quite peaceful

Can someone just buy a golf membership and what do they cost nowadays?

Here is the info from a source at the BCC.......

There is no membership.....the fee is $250 for a months play beginning the 1st of each month. You get 18 holes per day, any day, at any time. That is for any day for which a tournament is not scheduled....very few....and you can even play after the tournament is over if it is a small one. The break even point is 6 to 8 rounds per month.

I guess if you like to play 2-3 times a week, it's a good deal.

slimshady - 11-19-2008 at 09:58 PM

People go to baja for various reasons. Some like the ocean, desert, customs etc. Living ocean close will always be the most desired location. To travel 1000 miles to go live in a Palapa and grow mangos in San Bartolo is not something I see myself doing. That being said I will not talk down someone who views that as their own paradise.

I like the golden corridor for many reasons, and like Los Barriles for others. thats why I own properties in both. Los Barilles is rustic but ever changing. But nothing is better than walking a few feet and dipping your feet in the ocean and looking at that beautiful colored water. Nothing I ever seen on California's shoreline even comes close.

Osprey - 11-20-2008 at 07:14 AM

Slim, people buy what they can afford, not just what they like. There are often several hundred thousands of dollars between being here, living just the best way you can on the beach and "near the beach". I won't talk down to people who will not settle for anything less than "right on the water" -- God bless em. There are getting to fewer of them. Were I in the money I would not buy/build/live right on the water -- the surf noise down here, where I choose to be, is killer near the water.

Terry28 - 11-20-2008 at 09:20 AM

$220-250 a square foot?? You are out of you mind!!! I know what labor costs are and who ever is charging that much in Baja is just greedy...but then again people are free to charge what ever they want....getting someone to pay that much is another issue...

slimshady - 11-20-2008 at 09:22 AM

The only reasonable beach front properties in the the East Cape are in the Boca Alamo/Cardonal area. Beachfront will cost about 300k-600k just for dirt. Regardless nothing is wrong with buying what you can afford and being near the water. Walking distance is awesome also and chances are your house will be left standing when the Hurricanes decimate the beachfront homes.