Welcome to Cabo San Lucas Real Estate Sign in | Help

Cabo San Lucas Blog

This blog discusses Los Cabos real estate and other important news and happenings in Cabo.


Outlook for High End Real Estate and Mexico's Economy

The US housing market is seeing early signs of price stability and even price increases for the first time in years.  However, prices for homes priced at $1 million or more have fallen a 20 percent this year.  The average sale price for top-tier real estate has fallen to just over $2 million, from $2.5 million in 2011. Some mega-mansions have seen price cuts of 30 percent or more in recent months.  Because of sale prices at the top dropping, the number of transactions for homes priced at $1 million or more has jumped 18 percent this year, one of the strongest increases since 2008.  Brokers for luxury real estate are already calling 2012 “The Year of Capitulation” for wealthy sellers.

As the saying goes here in Mexico, when the United States sneezes, Mexico gets a cold.  This adage applies on the positive side as well.  You can equate prices in Los Cabos with the United States.  And now is a great time to be buying a home in Mexico, specifically Los Cabos.

Not only are we seeing very good prices for real estate in Los Cabos, the economy of Mexico is very strong.  Indeed, Mexico’s economy has a number of strengths.  It is the 14th largest in the world.  If you take into account purchasing power, it is the 11th largest economy-larger than Canada, Turkey, and Indonesia.  It is projected to grow 4 percent this year and even faster in the coming decade.

Investors are taking a growing interest in this Latin-but-North American country.  In a special report on investing in Mexico the Financial Times went as far as to call its macro economy “virtually bulletproof”.  Move over BRICs – Brazil, Russia, India, China – it’s time for the MISTs – Mexico, Indonesia, South Korea, and Turkey.

Mexican manufacturing is poised for a boom.  And while in the past few years Mexico has banked on its proximity to the U.S. (lower transport costs) and trade deals like NAFTA to compete with China, it will now be able to manufacture and price products at an advantage.

One thing is clear – Mexico is not the war-torn wasteland it is often made out to be.  Its people have a glorious history, and a hopeful future.  This isn’t to say that Mexico is destined to be the next investment hotspot – that’s far too simplistic a way of looking at this.  Instead, the numbers suggest the truth is somewhere in between. Mexico has enormous capacity to surprise on the economic stage.  In order to really shine, Mexico is working on developing a vibrant middle class.

Price adjustments and the strong economy in Mexico make this the perfect time to invest in a vacation or retirement home in Los Cabos.

Posted: Saturday, September 15, 2012 3:41 PM by Nick Fong


No Comments

Anonymous comments are disabled