| Pages:
1
2 |
bajabound2005
Ultra Nomad
Posts: 2760
Registered: 10-15-2005
Location: Punta Banda, BCN
Member Is Offline
Mood: words cannot describe...
|
|
Baja feels the effects of housing downturn
Experts confident slump is temporary
By Diane Lindquist
UNION-TRIBUNE STAFF WRITER
December 5, 2007
CARLSBAD – The U.S. housing slump has spread south across the border,
dampening a coastal real estate boom boosted in recent years by
Americans snatching up vacation and retirement homes in Baja
California and elsewhere in Mexico.
How long the downturn will last dominated much of the conversation at
yesterday's Mexican resort development conference at La Costa Resort
and Spa. The event, sponsored by the Baker & McKenzie law firm and
Sausalito-based Contact Development, drew about 400 attendees on the
first day. It ends today.
Developers and financial executives speculated that the slump in
Mexico will continue for anywhere from six months to two years – or
perhaps even five years.
About 30 resort and housing projects that had been planned in
northern Baja California and Puerto Peñasco on the Sea of Cortez in
Sonora, south of Arizona, won't get built, predicted Embree "Chuck"
Bedsole, managing director of the global advisory firm Alvarez &
Marsal.
"There is a lot of supply in the pipeline," he said. "We've been
debating whether that's going to be developed."
Until recently, before prices fell and became more volatile,
appreciation rates on Mexican property had reached 15 percent
annually. That's expected to drop to 5 percent to 10 percent during
the slowdown.
Unlike the housing market meltdown in the United States, which has
been partially caused by young first-time buyers failing to make
payments on their adjustable-rate mortgages, the Mexican slowdown is
more associated with baby boomers who pulled equity out of high-
priced property to buy retirement or vacation homes in a sunny
climate. The condos, townhomes and houses range in price from
$150,000 to more than $1 million.
The boomers' monetary shortfalls are more temporary, the experts
said, because they have more equity and are inheriting money as their
parents pass away.
"Baby boomers have a lot of wealth. You've got a lot of people who
are going to have time and money to do stuff," said Textron Financial
senior vice president Adam Greene. "The feeling is there's a lot of
money waiting on the sidelines."
Over the past decade, the number of such buyers settling into active-
lifestyle communities in Mexico has increased from 200,000 to between
600,000 and 1 million. About 100,000 U.S. citizens retire to Mexico
each year.
Property sold in Mexico also tends to be in the luxury category and,
thus, more immune to impacts from the current U.S. housing situation.
"There's a temporary downturn in sales," said John McCarthy, chief
executive of Mexico Leisure Real Estate Development Partners, "but I
think the demographics are there. And once the psychological effect
of the subprime crisis passes, the market will come back."
The "Gold Coast" corridor from Tijuana to Ensenada could lag behind
other areas in recovery, said Bruce Greenberg, who heads an Arizona
real estate appraisal and consulting firm. He said the region's
developers tended to be smaller developers and builders who came
across the border.
"Two guys with cell phones" was the description offered by Justin
Mehren, managing director of Latin America Capital Group.
The current slowdown will spur a better quality of development, said
the experts. Mixed-use projects that anchor lodging with shops,
restaurants, attractions and entertainment will attract funding that
is available, several said.
"Diverse planning is needed. And there's a need to integrate with
tourism," McCarthy said. "We need to give people more to do than just
go to their condos and watch the sunset."
The most popular and lucrative projects now are those that are
branded, such as golf courses designed by champion golfer Jack
Nicklaus, who spoke yesterday about his role as the top golf course
architect in Mexico.
"As soon as golf became part of the equation, prices went up," he
said. "A branded golf course will boost the value and income of a
resort."
----------------------------------------------------------------------
Diane Lindquist: (619) 293-1812; diane.lindquist@uniontrib.com
Friends don't let friends drink white zinfandel.
|
|
|
Minnow
Banned
Posts: 1110
Registered: 8-30-2002
Location: Lost Wages
Member Is Offline
Mood: Embarrased Harry Reid is a Nevadan
|
|
I pity the poor ******** who bought property in that area in the last couple of years. This article doesn't even mention the latest crime issues.
That is going to have a MAJOR impact on prices in the northern baja region. A fifty percent decline would not be out of the question. Let alone the
mensos who bought on leased land. What were those people thinking. They have
nothing.
[Edited on 12-6-2007 by Hose A]
Proud husband of a legal immigrant.
|
|
|
MrBillM
Platinum Nomad
Posts: 21656
Registered: 8-20-2003
Location: Out and About
Member Is Offline
Mood: It's a Zip-a-Dee-Doo-Dah Day
|
|
That's Life !
Tough luck for those who made poor investment decisions. Just like the "DotCom" bust, the market was so obviously over-heated that anyone should have
been able to foresee a downturn regardless of what ANY so-called expert said. Buyers tried to bet that they could time the downturn and many failed.
|
|
|
gnukid
Ultra Nomad
Posts: 4411
Registered: 7-2-2006
Member Is Offline
|
|
Anyone who has property on the coast or anywhere in Baja and Sonora has a wonderful place to live that is highly valuable, they may need to add a few
security measures or reduce their expectations but to live on the beach is an amazing experience thats worth it. Camping is even better.
|
|
|
Al G
Ultra Nomad
Posts: 2647
Registered: 12-19-2004
Location: Todos Santos/Full time for now...
Member Is Offline
Mood: Wondering what is next???
|
|
Hmmmm....can anyone see this as anything but good?
I would never want this to happen, because of some Baja people getting hurt, but a cool down over economics will help Baja cope...I think
Albert G
Remember, if you haven\'t got a smile on your face and laughter in your heart, then you are just a sour old fart!....
The most precious thing we have is life, yet it has absolutely no trade-in value.
|
|
|
Minnow
Banned
Posts: 1110
Registered: 8-30-2002
Location: Lost Wages
Member Is Offline
Mood: Embarrased Harry Reid is a Nevadan
|
|
| Quote: | Originally posted by gnukid
Anyone who has property on the coast or anywhere in Baja and Sonora has a wonderful place to live that is highly valuable, they may need to add a few
security measures or reduce their expectations but to live on the beach is an amazing experience thats worth it. Camping is even better.
|
Anyone who buys property for a "wonderful place to live", is better of renting. Buying property is an investment. Now buying a house on someone
elses property is stupid.
Proud husband of a legal immigrant.
|
|
|
castaway$
Senior Nomad
Posts: 742
Registered: 7-31-2007
Location: Gold Hill, Oregon
Member Is Offline
Mood: Fish on!
|
|
As with the states, where I am a veteran Broker of good markets and bad, this could be a tremendous opportunity to buy in Baja for investors and
retiree's. The downturn in the market should have people asking once again "When is the bubble going to pop", because we are again in a bubble it's
just 180 degrees from 2005. I believe there is plenty of opportunity in Baja and I would be willing to bet that most people selling have 1 of 2
reasons-
Need cash
Failing health
This usually means that people are more likely to be more negotiable than in the past when people are just buying up everything they can get their
hands on for speculation. As always a word of caution that seems to be said over and over again, "If you are going to buy in a foreign country don't
spend more than you are willing to lose". I don't own yet but I will, I am doing my homework and I plan on taking advantage of this temporary
downturn.
|
|
|
tripledigitken
Ultra Nomad
Posts: 4848
Registered: 9-27-2006
Member Is Offline
|
|
| Quote: | Originally posted by Minnow
Buying property is an investment.
Minnow,
When I have bought houses (those that we live in) in the U.S., they were bought for lifestyle reasons. As it turned out 2 out of 3 were good
investments also, but not the reason for the purchase. Rental property and vacant land is most assuredly investments and we have done that also.
Likewise, from our point of view, our purchase of land in Baja (with the plan to build on it) was also a lifestyle decision. It is our investment in
our well being and our daughter's (who will inherit it).
Just another way of looking at the world.
Saludos,
Ken |
|
|
|
Al G
Ultra Nomad
Posts: 2647
Registered: 12-19-2004
Location: Todos Santos/Full time for now...
Member Is Offline
Mood: Wondering what is next???
|
|
| Quote: | Originally posted by castaway$
As with the states, where I am a veteran Broker of good markets and bad, this could be a tremendous opportunity to buy in Baja for investors and
retiree's. The downturn in the market should have people asking once again "When is the bubble going to pop", because we are again in a bubble it's
just 180 degrees from 2005. I believe there is plenty of opportunity in Baja and I would be willing to bet that most people selling have 1 of 2
reasons-
Need cash
Failing health
This usually means that people are more likely to be more negotiable than in the past when people are just buying up everything they can get their
hands on for speculation. As always a word of caution that seems to be said over and over again, "If you are going to buy in a foreign country don't
spend more than you are willing to lose". I don't own yet but I will, I am doing my homework and I plan on taking advantage of this temporary
downturn. |
Nothing to do with you, but this is what the brokers in Baja want you to believe...Just keep the money flowing. This is the beginning of the bubble
break...and if you buy now, you will bail-out some of the speculating brokers. Is this what you are saying to do now???
"this temporary downturn"...could last 2 years plus...market could fall 25%
Albert G
Remember, if you haven\'t got a smile on your face and laughter in your heart, then you are just a sour old fart!....
The most precious thing we have is life, yet it has absolutely no trade-in value.
|
|
|
castaway$
Senior Nomad
Posts: 742
Registered: 7-31-2007
Location: Gold Hill, Oregon
Member Is Offline
Mood: Fish on!
|
|
Al G your point is well taken, I think that we are at the beginning of the slide dowhill, it could last at least a year maybe two if it is dependent
on the U.S. market. I want to stress that it could all be over in a blink of an eye and many could be left standing on the sidelines going damn I
missed again.
I don't think anyone should be in a hurry but I would suggest for those that don't own and are serious I would start looking now because the search if
done properly will take some time and if you find Nirvana play HARDBALL when you negotiate, if they need money they need it now and you may just get
25% or more off now, but of course if you do wait and have good timing you may get 50% who knows.
|
|
|
comitan
Ultra Nomad
Posts: 4177
Registered: 3-27-2004
Location: La Paz
Member Is Offline
Mood: mellow
|
|
All good info, I guess its time to raise the price on my property. For the hardballers.
Strive For The Ideal, But Deal With What\'s Real.
Every day is a new day, better than the day before.(from some song)
Lord, Keep your arm around my shoulder and your hand over my mouth.
“The sincere pursuit of truth requires you to entertain the possibility that everything you believe to be true may in fact be false”
|
|
|
vandenberg
Elite Nomad
Posts: 5118
Registered: 6-21-2005
Location: Nopolo
Member Is Offline
Mood: mellow
|
|
| Quote: | | if they need money they need it now and you may just get 25% or more off now, but of course if you do wait and have good timing you may get 50% who
knows. |
You must have just got home from a real estate seminar
|
|
|
Al G
Ultra Nomad
Posts: 2647
Registered: 12-19-2004
Location: Todos Santos/Full time for now...
Member Is Offline
Mood: Wondering what is next???
|
|
| Quote: | Originally posted by castaway$
Al G your point is well taken, I think that we are at the beginning of the slide dowhill, it could last at least a year maybe two if it is dependent
on the U.S. market. I want to stress that it could all be over in a blink of an eye and many could be left standing on the sidelines going
damn I missed again.
I don't think anyone should be in a hurry but I would suggest for those that don't own and are serious I would start looking now because the search if
done properly will take some time and if you find Nirvana play HARDBALL when you negotiate, if they need money they need it now and you may just get
25% or more off now, but of course if you do wait and have good timing you may get 50% who knows. |
"damn I missed again" There is a saying in the game I play..."never try and catch a falling knife"
You are right about getting ready though...but pulling the trigger on the way down can be fatal to your investment unless you in it for a time and are
aware it may never be lucrative.
If your timing is perfect you can still lose...crime gets worse or a socialist is elected and he declares all land returned to the state....both real
possibilities. In fact they are the main reason I believe the Baja market is way over heated...prices have gone up over 200% in a couple years. Some
much more then that, and I don't see the support for that kind of risk. Speculation is a major reason for the price spike and adds to the risk for the
average non spectulator...now is not the time to buy...and spectulators better hang on to their shorts...
Albert G
Remember, if you haven\'t got a smile on your face and laughter in your heart, then you are just a sour old fart!....
The most precious thing we have is life, yet it has absolutely no trade-in value.
|
|
|
castaway$
Senior Nomad
Posts: 742
Registered: 7-31-2007
Location: Gold Hill, Oregon
Member Is Offline
Mood: Fish on!
|
|
I appreciate your opinions Al. As I have stated I don't own in Baja as of yet but Iintend to. Being a Broker here in Oregon I work with a lot of
investors and I put on seminars to educate my clientele. So far myself and my clients have done very well investing and we have a very simple
strategy- Educate yourself about the investment before you buy it.
I highly advocate finding and listening to people that are on the front lines, I will be the first to admit I really don't know much about buying in
Baja, but I am educating myself and as I stated above I respect and appreciate your opinions. I am not in a hurry to buy and initially my intent is to
buy a second/retirment home but I guess my investment background always has me sniffing around for the good deals. I do think there are some good buys
out there now and I'm sure there will be better in the near future, but I also beleive that one key point that was made in the intial posting that
started this thread is probabaly true and could play a major role in how long it will take for the market to begin an upward shift- "Baby boomers have
a lot of wealth". There are certainly a lot of wildcards that can and will affect the Baja market and for now it may be wise to sit on the fence and
watch, and for me, keep learning from people with experience.
|
|
|
rogerj1
Nomad
Posts: 265
Registered: 4-29-2004
Location: Gig Harbor, WA
Member Is Offline
|
|
I've somehow managed to keep my money in my wallet these last 3 years since that fateful trip to Cabo that reawoke a passion for Mexico in me. It was
very difficult watching property prices take off without getting involved. It's been a huge learning curve along the way, which has been fun.
Castaway, you and I are in similiar lines of work except I'm in the stock market business. Perhaps we could put our heads together to sniff out some
good opportunities. I've met some great people on this board and elsewhere and as you know, contacts are very valuable in Mexico. I look forward to
reading more of your posts.
|
|
|
gnukid
Ultra Nomad
Posts: 4411
Registered: 7-2-2006
Member Is Offline
|
|
Buy low sell high! wahoooooo!
|
|
|
capt. mike
Elite Nomad
Posts: 8085
Registered: 11-26-2002
Location: Bat Cave
Member Is Offline
Mood: Sling time!
|
|
ha!! this is a great time to explore buying , well actually leasing for 50 years, in mexico and baja. I love a falling market except when i am selling
of course!! - there are deals everywhere!!!!!!!!!
people buy on emotion and sell on need - just find someone who is ready to or has to bail out on their place and snipe it - good targets are older
retirees who've had their good run and need to be in the states for their last years.
formerly Ordained in Rev. Ewing\'s Church by Mail - busted on tax fraud.......
Now joined L. Ron Hoover\'s church of Appliantology
\"Remember there is a big difference between kneeling down and bending over....\"
www.facebook.com/michael.l.goering |
|
|
Osprey
Ultra Nomad
Posts: 3694
Registered: 5-23-2004
Location: Baja Ca. Sur
Member Is Offline
|
|
You shrewd speculators might want to hook up with Baja doctors up and down the peninsula, have them alert you when somebody goes on the DNR list.
Perfect environment here for Sopilotes.
|
|
|
islandmusicteach
Junior Nomad
Posts: 78
Registered: 4-30-2007
Location: catalina island
Member Is Offline
Mood: almost in baja
|
|
sopilote mojado
http://music.yahoo.com/track/638362
- Marko
|
|
|
Al G
Ultra Nomad
Posts: 2647
Registered: 12-19-2004
Location: Todos Santos/Full time for now...
Member Is Offline
Mood: Wondering what is next???
|
|
Ospray...There is not a tequila strong enough to get that taste out of my mouth...if the people who inherit then sell, because they don't like Baja, I
will get my best price. It would not feel like I was stealing a dream...
BTW my spanish still sucks...Sopilotes...something to do with aviasion???
Albert G
Remember, if you haven\'t got a smile on your face and laughter in your heart, then you are just a sour old fart!....
The most precious thing we have is life, yet it has absolutely no trade-in value.
|
|
|
| Pages:
1
2 |
![[*]](images/xmbforum/default_icon.gif){kind=icon}
