16 April 2008 105 views No Comment

“The condo market in Mexico is less likely to crash”, predicts Scott Burns, a 21 year investment columnist for The Dallas Morning News. Compared to the real estate market in the US, the Mexico real estate market is more attractive, though there are a few indicators of appreciation slow downs.

No Creative Financing in Mexico

Burns explains that there is no creative financing in Mexico, since most homes are bought in cash. He surmises that there may be some investors who used funds from thier investments in the US, but believes most speculators in Mexico are well funded.

Demand from International Investors

The prices for ocean front real estate is not as expensive for Europeans because it has appreciated significantly over the dollar. Investments in Mexico real estate are appealing to people in countries with strong currency values.

Strong Appreciation Lately

According to Vallarta Lifestyle, the average condo resale price rose 79 percent from $196,000 to $351,000 between 2003 and 2007, compared to a 32 percent rise in the US over the same period. This may be an indicator that Mexico real estate is due for a slow down.

Buyers Market

There is no shortage of new developments in Mexico real estate markets. Scott Burns believes that there are not enough rich buyers for all the new luxury developments that are going up in places like Puerto Vallarta.

Burns believes that places like Puerto Vallarta are more of a long term opportunity because of the buyers market and recent high growth. Less developed markets of Mexico are not as affected by these problems and may be a better investment for those looking for short term appreciation.