Cozumel Mexico Blog

Mexico Real Estate vs. US Real Estate

Mexico Real Estate Versus US Real Estate

Mexico Real Estate Versus US Real Estate 3 October 2008

A year over year decline in housing prices in the US are very rare, but the failure of financial giants like Lehman and Washington Mutual mean it will probably be a while before housing prices start recovering. Smart Money editor Jack Hough told the Wall Street Journal This Morning Podcast on September 30th that “I think we could enter a period where we have a decade or so of not housing decline but just flat prices, and if you have a flat price remember inflation keeps creeping along every year, so if prices don’t move and inflation is rolling along at 3% you’re actually losing 3% each year.” He goes on to argue that it makes more financial sense to rent than to buy.

Patrick Killelea lists several reasons why it is “a terrible time to buy” on Patrick.net, a site about the real estate bubble. He writes “It’s still much cheaper to rent than to own the same thing. On the coasts, yearly rents are less than 3% of purchase price and mortgage rates are 6.5%, so it costs more than twice as much to borrow money to buy a house than it does to rent the same kind of house. Worse, total owner costs including taxes, maintenance, and insurance are about 9%, which is three times the cost of renting.” In addition the combination of less competition for mortgage lenders due to WaMu’s failure and tightening credit markets will likely mean interest rates will increase.

 In contrast Mexico real estate has several factors that make buying in Mexico an attractive alternative. Real estate is much cheaper overall compared to the US, especially coastal real estate. The financial markets are in better shape since subprime mortgages are essentially non-existent in Mexico and the mortgage backed security market is still in the infant stages there. Traditionally Mexican’s pay much higher down payments like American’s did after World War II. There is growing demand for homes with the combination of 70 million American baby boomers, the Mexican government’s push to get people in homes, and the maturation of the mortgage market in Mexico. Developers are building as fast as possible to catch up to demand. There is a shortage of 4 million homes according to Inter-American Development Bank while in the US will have a surplus due to excess inventory built during the boom period and the record numbers of foreclosures. Simple economics suggest that growing demand and a shortage of supply will lead to growth in home values in Mexico, while more people in the US will rent rather than buy and sellers will have to drop prices to move their excess inventory

 

Cozumel Chatter

Expat's chat about US economy and move (permanent) to Cozumel! 

I'm personally glad I'm Here!  Live in Cozumel and The Mayan Riviera Realty - Cindy, The Road Warrior

http://www.cozumelmexicohomes.com

 Question:  How will the current world econimic conditions affect your up coming vacation plans or retirement plans for Cozumel.....

Answer: 

I live on the island from November to May and head to the states during the summer....I am thinking of giving up my home in California and just have the Cozumel pad....during the summer I can move between my kids and my parents....probably should have done that last year instead of buying....I'll make a decision while I am on the island this winter...my house hasn't dropped in price and it's in a over 50 community so it might not be hard to sell it for the price I paid...then no property taxes, insurance or HOA's. I like it here but if things continue on a downward sprial I might make Coz my permanent home.

Quintana Roo Investments and Home Purchases

 I don't often share other agents comments, however I respect Thomas Lloyd and his knowledge and experience in the areas he serves across the water from Cozumel.  Please consider his opinions! 

Cindy

The Road Warrior of Real Estate

www.cozumelmexicohomes.com

mexico 998-282-6048

us 303-521-7968

Thomas is an active real estate Broker in Quintana Roo, Mexico which includes such areas as Cancun, Riviera Maya, Playa del Carmen, Tulum, Cozumel and other regional areas.  Thomas is a native of Indiana, a Purdue University graduate, entrepreneur, and has been living in Mexico since 1995.

Today we welcome Thomas Lloyd, who owns www.TOPmexicorealestate.com , a new web page and blog of tips & “how to” regarding Mexico Real Estate.  Thank you Thomas, for offering to share your experiences on living and doing business in Mexico. My first question is what makes real estate in Quintana Roo a good investment?

This question deserves an entire chapter and even an entire book for a response.  But, I will try to answer in two or three sentences.  Mexico is an emerging market versus developed markets found in the USA, Canada, and/or various countries/markets of Europe.  In mature markets it is becoming more and more difficult to find opportunities with strong returns.  In emerging markets, you will have a better probability of finding such opportunities but the risks may be higher. Surrounding yourself with a good, knowledgeable team on the ground will help you greatly in managing such risks.  Now within Mexico, there are various regions that have different scales of opportunities, one of those being Quintana Roo.  A unique aspect of this region would logically be its location.  This state is located on the eastern part of Mexico on the shores of the Mexican Caribbean.  Approximately one hour from South Florida, about 2 hours from Texas, 4 hours from Chicago, 5-8 hours from Canada, 9 hours from UK, etc.  It is the second busiest airport in Mexico after Mexico City, and it is Mexico`s number one tourist destination.  Basically,  this market is fueled by tourism, and the tourism is diversified from several originating markets:  the United States, Canada, and the European market.  These tourists and visitors creates the demand side opportunities.

What specific real estate markets in Quintana Roo have the best opportunities for appreciation?

Waterfront investments have had many opportunities.  Preconstruction projects have had some incredible returns if administered correctly.  Tulum has been buzzing for about 2 years with much speculation of a new international airport, along with their existing beautiful turquoise beaches.  Playa del Carmen developers have narrowed the gap between existing rooms versus tourist visitor demand, but tourist visitors are projected to expand very strongly for the next 5 years.  And finally, there are some interesting new Real Estate projects that have discovered some niches in the markets which are quite interesting for review.

Do you think the real estate market in Cancun has peaked or are there still opportunities for growth?

The population of Cancun is still growing at impressive rates.  The city, state and federal governments have some interesting projects relating to industries other than tourism that has continued the creation of new jobs and opportunities.  I am surprised at the amount of Mexican nationals that have been moving and purchasing on the residential inventories.  On the luxury and international market side, Cancun has introduced some new gated communities with marinas and golf courses.  Deep draft marinas with capacity for yachts over 100 feet are an interesting and developing market.  These developments  are opening up new markets of end user prospect client types.  In the past 12 months approximately 4 new golf courses have been introduced or are in the process of being introduced to this region.  Boaters in the southern Florida region for example, will now have the option to cruise down to the Mexican Caribbean to explore and play in the Yucatan peninsula.

Have you seen any signs of slowdown of real estate in the Quintana Roo region due to the recent financial crisis in the US?

Yes, over the past 12 months the quantity of Americans purchasing has been put on hold or reduced.  The Canadians on the other hand have spurted upward, taking advantage of the strong Canadian Dollar.  The amount of direct flights from European airports have been increasing over the past 3 years and a stronger euro and pound have also created increased demands.

Can you describe some of the advantages or disadvantages of investing in the Mexican real estate market versus the US real estate market?

As mentioned above, a mature market versus a new emerging market are some of the advantages that I can see as being advantageous.  The cost of every day living is another factor that creates interest for buyers as well.  Whether you are investing for yourself, or advising a client, Mexico with its natural beauty, its easy travel access, and lower costs per square foot on waterfront properties and other real estate, are a few of the main factors that should require investors to place Mexico as an top option for comparison and analysis.

Thomas Lloyd graduated from Purdue University Krannert School of Management with a degree in Management/Financial Option Investments. He has been living, investing, and working professionally in Mexico for over 15 years. Active broker and current president of TOPmexicorealestate, you can contact him at (512) 879-6546 or through the company`s web site www.TOPmexicorealestate.com

Puerta Maya Terminal Cozumel

After three years, (which will complete in 20 more days) the Puerta Maya Cruise Terminal that was knocked down by those maddened waves of hurricane "Wilma" is ready and will begin to receive cruisers starting October 16, when the first two ships of the shipping company, Carnival will arrive to that terminal.

The ships present for the "premiere inaguration" of the new Puerta Maya Terminal will be the cruisers Fantasy and Ecstasy, both of the Corporation Carnival, that is also the owner of the terminal.

The first three days of Puerta Maya operations will be with the two positions of mooring of the busy pier; after the above mentioned first arrivals, on Friday 17 of October will arrive the Carnival Valor and the Carnival Conquest; while for Saturday 18th, they expect to receive the Carnival Destiny and the Inspiration.

The return to the operations of the Puerta Maya Terminal has been the best news in the past several months for Cozumel, where first they had brought to light that the chosen day for the return to the operations would be October 12th, although according to the itineraries of arrivals, it will be Thursday, October 16 when they dock the first ships.

Many people in the island lost their employment or their business, or both things, when Puerta Maya was destroyed by "Wilma" almost exactly three years ago, that in fact they will complete in about 15 more days.

The storm did not only collapse the pier, but also destroyed the enclosed commercial plaza, where many people worked.

After two years and four months of repair work that began June 7, 2006, the pier is finished; has implied an approximate cost of $20 million dollars and has a project of enlargement that, to be approved, would double its capacity from two to four cruisers.

2 Story For Sale in Cozumel

Condominium - University location

• 2 bath, 2 bdrm 2 story - MLS® $165,000 USD - UNIVERSITY LOCATION

Cozumel, Quintana Roo  -  UNIVERSITY LOCATION - Great Investor Opportunity for beautiful 2 story condo in a regime with 2 other condos in the same complex selling now! Must hurry! Great rental and cash flow opportunity! Beautiful attention to details with tiles countertops, tile thruout the home, private living area, patio and garden off the kitchen dining area. Place to socialize, barbeque, bananna trees, manicured grass. Common areas with parking inside walled area yet on a corner lots centrally located. 2 large bedrooms with huge wall to wall closets, storage, pantry, private balcony off the master bedroom - A Must See and Hurry!

Property information

Single Story For Sale in Cozumel

GROUND LEVEL - PERFECT FOR INVESTOR

• 2 bath, 2 bdrm single story "GROUND FLOOR - 1 of 3 condos " - MLS® $105,000 USD - ONE OF THREE CONDOS

Cozumel, Quintana Roo  -  located on 75 & 17 in Colonial Maravilla Cozumel - Condo Regimen - Casa Maravilla 1 is a ground floor unit with Living room, Dining room, Studio or 2nd bedroom w/ closets and storage areas thru out the home. This beautifully designed property is in a complex of potentially 3 total properties or may be sold separtely. The kitchen not only has a dining area but also room for kitchen bar stools and a gorgeous garden and outside patio views. There is a party and entertainment area, covered patios and additional tiled common space for more gatherings. Private access to all units yet many shared common areas - inside parking, corner lot and centrally located. Very close location to University! Would make a great home or investment!

Property information

Mexico - 2nd fastest growing....

 

COZUMEL mini port - point of origin

Starting in October, the international port of Punta Langosta in the island of Cozumel, -the main cruisers destiny in Mexico-, will become a "mini" home port, with the first route to be carried out by the embarkation Grand Voyager.

As it is promoted already in diverse pages of internet, the first crossing, -that has as point of origin, the island of Cozumel-, will leave October 26 from this destiny and the circuit includes destinies like Georgetown, Montego Bay, La Romana, Grand Turk and Nassau.

In spite of the fact that the plan is diffused as a fact, up to now authorities of the island and of the tourist sector do not know the project.

The cruiser Grand Voyager, -that is promoted as one of the most modern of the world-, has capacity for thousand one hundred passengers, (836 passengers and 360 crew members) and is focused chiefly to European tourism, with rates that go of the $589 to the thousand $600 dollars, without including airplane.

The plan of the new one traveled through, that would put to Cozumel in the map of the cruisers as "point of origin", offers like attraction, the fact the travelers do not need an American visa, the use of the Spanish language as base and exits all Sundays from Cozumel, apart from Sunday, 26 of October.

After the polemics that maintained for various years the hotel sector and the consortium Xcaret, -that along with Carnival Corporation intended to build a home port in the Riviera Maya, with an investment on the order of $80 million dollars-, this will be the first effort to promote a home port for the cruising tourists.

It fits to emphasize that the Punta Langosta Terminal, is operated for Carnival Corporation in Cozumel and was maintained in restructuring since hurricane "Wilma". The Port will open of official form its doors November 1, after an investment on the order of 40 million dollars.

It was reported that the cruiser Grand Voyager is focused chiefly to European tourism, since each week will arrive at Cozumel a flight originating in Madrid, Spain, operated by Iberojet, whose passengers will come in direct form to the island to carry out the cruse.

The group of American cruisers Carnival Corporation signed a letter of intent with Orizonia Corporation, the Spanish tourist company that was bought in July of 2006 by the group Carlyle & Vista Capital and that operates in the Spanish market of cruisers with the firm Iberojet Cruisers.

The agreement foresees the constitution of a co-business to direct and to reinforce the activity of Iberojet Cruisers, whose fleet is constituted by two ships: the Grand Voyager (834 passengers), built in 2000 and the Grand Mistral (1,196 passengers), built in 1999.

Carnival will retain 75% and Iberojet 25%. With this transaction, the activity of Iberojet is valued at $320 million euros, with 180 million debts, leaving a net value of capital of $140 million.

The new company will be presided over by Luigi Foschi, president and delegated administrator of Coast Cruisers, subsidiary of the group Carnival.

According to the forecasts, the transaction should finish in the course of second quarter of this year.

(Source: The Finaciero)

COZUMEL - PLAYA DEL CARMEN FERRY SCHEDULE changes....

Cozumel to Playa del Carmen:
First ferry leaves Cozumel at 5 AM and the last ferry at 10 PM.
In high season, they run every hour on the hour. Right now, during low-season the following hours, there is NO FERRY:

6 AM, 11 AM, 1 PM, 3 PM, 7 PM and 9 PM.


Playa to Cozumel Schedule:

First ferry leaves Playa for Cozumel at 6 AM and the last returns to Cozumel at 11 PM.

Low season cancels out the following trips:

7 AM, Noon, 2 PM, 4 PM, 8 PM and 10 PM.

This schedule will be in place probably until around Dec 15, the official start of high season.

  

Dive Discussion with friends from Cozumel

This month's talk will be in English!!!!!


"See Christian Ehrich's photos and videos about adventures diving in the Maldives and drink a beer with friends of DAN.”

Monday 29 of September
7:30 pm
La Palapita Den Medio
Costera Sur Km. 2.85 in Front of Papa Hogs, Cozumel, Q. Roo

FOR MORE INFORMATION
Phone: 872-6905
Cell: 044-987-101-2897
Email: ljohnson@dan.duke.edu

Every month through October, join us to hear a talk about diving in other destinations. Free entrance. Free snacks. Beers on your tab.

Cozumel offers Horse Therapy

Horse therapy is the idea. Liliana Velazco, program director added that the equine-therapy can take people with problems hypotonic, hyperactive, with cerebral palsy, with delay, emotional problems, chiefly, the sessions or therapies last between 20 and 30 minutes and the benefits are a lot greater. On the matter the responsibility for this club in Cozumel, Liliana Velazco, explained that equine-therapy is the base of horseback riding used in a therapeutic way, the horse is the main factor to achieve a good connection between the animal and the person, since the patient should not feel pain during the sessions of equine-therapy. "I believe people think that these therapies are a farce or are for rich people, the reality is that they are within reach of the pockets of most all people; the mission of this group is to support the ones that require equine-therapy, but it is also important to collect some resources for the diet, maintenance and care of the horses, that are the fundamental base of this technique", she explained.

Punta Sur ownership and environmentalists

At Punta Sur To avoid any private seizure extensions of land inside the ecological reserve of Punta Sur, the ecologist and environmentalist group Citymar will interpose a demand, since decrees exist that prohibit this situation. The president of the Group Citymar in the island, Guadalupe Álvarez Chulim, said that according to the decree of the former governors Mario Villanueva Madrid and Joaquín Hendricks Díaz, there are protected more than 16 thousand hectares of land in Laguna Colombia, due to the existence of mangroves, flora and fauna that should be protected. She explained that the decrees that were promoted in previous six-year periods prohibit all kinds of constructions in the zone of Punta Sur because it is a matter of an ecological reserve, besides there is a plan of management that limits the quantity of people that can be received daily in this part of Cozumel. She regretted that a group of individuals of the state of Yucatan, have presented before the Foundation of Parks and Museums of Cozumel and they describe themselves as the owners of several hectares, putting forward that they have titles of property, which we do not know if they are good or false. Alvarez Chulim asked to the population Cozumeleña to be added to the defense of this patrimony in Punta Sur and advised that they are not going to permit the building of palapas and much less cabins or an ecological hotel, because that contravenes many laws and decrees. Finally, she added that they have mangroves backfill indications in the zone where the individuals of the state of Yucatan show themselves as the owners, therefore they will verify if this is real and they will proceed in an energetic form against these abuses.

Cruise Ships add to Economy in Cozumel!

Once more there will be fourteen cruisers arrive at the island of Cozumel during the work-week that begins Monday; this number of arrivals has been the average of all the low season and is superior by two arrivals to the twelve announced for the previous week, when the lowest figure was registered.

For this week, Cozumel expects the arrival between 35 and 42 thousand visitors in the island, who would be able to generate an economic activity in the order of the $2.5 million dollars; although due to the economic crisis in the United States, the level of expense could be negatively affected.

The day with the most ships for the week that to is about to initiate will be Wednesday, October 1st, when will arrive for the first time in months four ships simultaneously.

One of those ships will be the Disney Magic, whose passengers have the fame in the island of spending a little more than the other cruise passengers.

This year, in the economic sense, will put to test those and other perceptions that exists that the American tourists, the main clients of the island, may restrict their levels of expense due to the serious financial crisis in its country.

Therefore, the arrival of the "Disney" could be a good thermometer to know what to expect in the next months as for the commercial behavior of the cruise passengers.

On the other hand Saturday, the ship Carnival Ecstasy caused some problems of logistics arriving near three in the afternoon, when it was expected for the eight in the morning.

Rent/Lease Reduced on Casa Ashley Cozumel in North Hotel zone

North Hotel zone, Cozumel  -  Announcing a rent/lease reduction on Casa Ashley Cozumel, a 2,900 sq. ft., 3 bath, 3 bdrm 2 story "POOL AND HUGE GARDEN!". Now MLS® $1,500 USD Monthly - CASH ASHLEY - COZUMEL.

Property information

US ECONOMY effects Cozumel

Little demand for tourist and aquatic services in the island in spite of the presence of two cruisers in the port; the consequences of the hurricane "Ike" on Texas, the American state from which many people travel to Cozumel, combined with the effects of the serious economic crisis that continues in the north country, are conditions that are playing against this tourist destiny. The low season can be extended this year and the expected relief that is supposed to arrive the month of November, might not be sufficiently large as to reverse the situation. This is thus because in the United States, the main supplier of tourists to the island of Cozumel with at least 85 percent of the total, conjugate right now a series of economic, political, and natural events, that necessarily will be reflected in the quantity of Americans that will be willing to travel out of their country in the next months and in their ability to spend money that they will have if finally they decide to travel. The elections in the United States will be November 4, if the results very are close, they would be able to pass several weeks and even months before decide to the winner; while that may not occur, in the north country there will be political uncertainty and when that occurs, the number of native international tourists declines also. Besides, United States faces the most serious economic crisis since the Great Depression of October of 1929 at present; the financial markets have been paralyzed along with the investment banks and the large mortgage companies of that country; which signifies that the most powerful nation of the world has been impoverished and its economic capacity has descended in much of its population, with what tourists that do arrive in the months ahead could have less available money to spend on their holidays. Finally, the state that more tourists sent to Cozumel, the State of Texas, has just to be struck by the hurricane "Ike", which left out of service in Home Port or port base of Galveston and affected also to the airport of Houston –already in operation-, causing serious losses to the population of Texans and causing that many of them cancel their holidays to destine that money to replace what they lost. All these factors combined will affect to Cozumel in the next months and they can cause that this year the low season be extend beyond what was expected and that the imminent high season at the end of the year not be as productive as the island requires.