About 60 percent of expats living in Mexico live in homes they own, according to our Expats In Mexico Survey 2018. Add to that the number of vacation homes owned by foreigners from around the world and you can readily see that real estate is big business for expats in Mexico.
For example, in expat magnet Puerto Vallarta alone a total of US$337,008,064 changed hands last year for land, homes and condos. Homes sales were up 37 percent from 2017 and condo sales increased by 20 percent. Land for construction, though, dipped 14 percent from the previous year.
The real estate industry in major expat centers around Mexico employs a high percentage of expats, mostly from the U.S. and Canada. Many have years of real estate experience in their home countries and some own their own firms.
Given real estate’s economic significance to the expat community, we begin this year by asking our Expats In Mexico real estate bloggers for their views on the local markets they serve.
Harriet Murray, owner of Cochran Real Estate in Puerto Vallarta, is bullish on the new year for the greater Bay of Banderas area.
“We had excellent home and condo sales in 2018,” she said. “Condo sales were up about 67 percent and homes nearly 29 percent. Indications are that we have enough inventory to sell without adding more to the local market. New construction in condos has been the main volume producer for our area for the last several years.”
Another hot real estate market for expats is Mérida. Mitch Keenan, owner of Mexico International Real Estate told us, “Our expat market has been steadily recovering since 2013. The reemergence of American investors has helped to bring the market into a healthier balance between available inventory and demand.”
Keenan said Canadian expats helped the local real estate market survive the 2008 U.S. housing crash, along with buyers from Europe, South Africa, Australia, New Zealand, and of course, Mexican nationals. Now Americans flush with home equity are helping to fuel a boom in Mérida.
“We are projecting strong growth throughout the coming year,” Keenan said. “Think Miami and Florida in 1950.”
Perennial expat retiree favorite Lake Chapala also seems to be on fire. Ajijic’s Continental Realty owner Michael Kavanaugh reported that the real estate market on the northern shore of Lake Chapala has been very strong, with prices up a minimum of 20 percent over 2017, according to his latest estimate.
“Properties in or close to Ajijic are in the greatest demand,” he said. “Sales of homes in areas in close proximity to Ajijic are also up substantially. A good home with a fair price will sell within 45 days in the current market. Contrast that with the 2009 to 2016 period when the average time between listing and sale was 167 days.”
Kavanaugh expects the market to continue strong in 2019 as more Americans and Canadians are looking for a place to retire that is affordable, with a good climate and close to home. Of note, Kavanaugh said many new arrivals have expressed unhappiness with the current political situation in the U.S.
Much farther west on the tip of Baja California Sur, Los Cabos is also experiencing a real estate boom, driven by expats and second home purchase.
Kristin Bloomquist, an agent with Engel & Völkers Snell Real Estate based in Cabo San Lucas, reported that Los Cabos is one of the fastest growing areas of Mexico.
“About 70 percent of visitors are repeat guests and 20 percent have visited more than four times,” she said. “Tourists are key buyers and sellers of real estate in our market. As we look into 2019, we see buyers either looking for vacation homes or retirement homes or people looking for rental income properties. There are a lot of options in the market right now with about 3,000 properties listed on the MLS-BCS, our multiple listing service.”
Bloomquist did point out, however, that the local market was impacted somewhat in 2017 when Los Cabos experienced a sudden increase in cartel-related violence. Since that time both public and private sectors have invested more than US$50 million to upgrade security infrastructure, equipment and personnel to increase safety and security.
In the central highlands, seemingly everyone’s favorite colonial city, San Miguel de Allende, continues to attract large numbers of expat retirees. Ben Pitre, an agent with Realty San Miguel noted, however, that sellers no longer can “name their own price” and expect their property to sell quickly.
“Mexican national buyers seem to be cautious and almost absent from the market at the high end because of concerns about Mexico’s new president,” he said. “That’s balanced somewhat by Americans enjoying a devalued Mexican peso.”
Pitre observed a big change occurring in the SMA market, renting rather than buying.
“We have seen a rise in long-term residential leases,” he said. “A lot of folks don’t have the few hundred thousand dollars it takes to buy a house for cash here or prefer not to tie up their money. Savvy local landlords are offering leases up to five years for expats who don’t want to buy, but do want a home. We expect this trend to continue as long as housing prices remain high.”
In Mexico’s southwest, John Harvey Williams, who owns Real Estate Oaxaca, said the real estate market is slow but steady, although inquiries from referrals from existing clients have picked up in the last several months, compared with last year at the same time. He expects a 30-percent sales increase this year over 2018, based on anecdotal evidence.
“Prices in our local market range from $40,000 pesos per sq. meter for properties within a one block radius of Santo Domingo church in the center of the tourist district to $500 pesos or less in the outlying areas. A nice 150 sq. meter home with 300 sq. meters of land in the center of the city is selling for around US$300,00. The same property 15 minutes from downtown is valued at US$150,000.”
All of the contributors to this article are Expats In Mexico real estate bloggers. To stay up to date on the market you are most interested in, be sure to find them in our Expat Blogs section. For a Mexico real estate overview, read Harriet Murray’s article, “Buying a Home in Mexico Requires a Professional.”