FREE Real Estate Newsletter & Email Alerts
July, 2006
We are all reading the conflicting news about the USA economy and the proverbial "Housing Bubble". Will it burst?....Has it already burst?....Or are we going to see a "Soft Landing" and simple stabilization of the housing market???
I personally believe that the USA housing bubble is already beginning to burst. I do not see a "Soft Landing". The inventory of unsold homes is rapidly rising and higher interest rates are taking more and more buyers out of the market. I believe you will soon see a serious housing glut as new construction is completed and more homes reach the market with fewer buyers.
Frozen assets in the USA will have a negative impact on foreign real estate investment - always plan on long term (5+ years) holding period for your foreign investment.
Meanwhile, Fed interest rates have been raised for the 17th time with no end in sight - sure hope you have a fixed rate mortgage.
Mexico is facing some serious political problems. The election for a new president is still in limbo. An official vote count by the IFE gave conservative Felipe Calderon an advantage of less than 0.6 percent in the July 2 elections. Lopez Obrador is disputing the lead in Mexico's top electoral court, which has until Sept. 6 to declare a winner or annul the race. Read a good summary of the Mexico election controversy or try a Google/Yahoo news search for Mexico Election.
Perhaps more important than Mexico election results is the possible rapid decline in Mexico's Cantarell oil complex - second largest in the world behind Saudi Arabia. This would also be very bad news for the United States, for which Mexico is the No. 2 petroleum supplier, behind Canada. A sudden decline in production from this major oil complex will have a huge impact on the Mexico economy and exacerbate tight global supplies that have kept oil at record prices. The multibillion-dollar question is just how quickly Cantarell will lose its productive capacity, and whether Pemex will be able to coax more oil out of existing fields to take up the slack while it searches for new deposits.
I believe that Mexico will continue to encourage foreign investment and tourism as a key factor in future economic plans.
Report warns of financial melt-down from abrupt climate change: "A financial services firm has published a report forecasting far-reaching and "dire" impacts from the prospect of rapid climate change."
For those of you who don't believe we have a global warming problem - WHAT IF YOU ARE WRONG??? How can we have sustainable growth and prosperity with a non-renewable energy source?
Our Most Serious Global Issue
Foreign investment, travel, retirement and economic prosperity for you, me and most of the world is generally conditioned upon global peace.
Our current dependency on Middle East/Islamic oil is the worst and most obvious threat to global peace and economic prosperity since World War II.
SIMPLE FACTS & POSSIBLE SOLUTIONS:
1. THE COST OF OIL CAN ONLY GO UP FROM HERE. The "EASY" oil has been found long ago and known reserves are being drained. The future cost to drill in remote locations will exceed the cost for development of sustainable energy from sun, wind and bio fuels. Add the current trillion dollar cost of the Iraq War to the current cost of middle east oil and it becomes rather obvious what we need to do.
2. Question: Do we subsidize the poor oil companies which are showing the largest profits in history or should we subsidize/encourage sustainable solutions to our obvious energy problems???
3. The USA can near immediately eliminate the need for Middle East oil with safe and efficient automobiles which achieve 50 miles per gallon - and that's just a start to what can and must be done.
4. The USA can eliminate another 10 - 20% of total energy needs by supporting the expanded use and availability of bio fuels which also supports the ag industry and creates jobs.
WE, THE PEOPLE, are the problem...and the solution!! It is time we elected some leaders that can properly address our energy problems - not feed it. November, 2006 is the time for USA citizens to make a statement. We all need to get involved and VOTE.
Foreign Investment information is posted for Australia, Canada, Mexico, New Zealand and the United States. Find general investment, legal, tax and immigration information and resources.
December, 2005
We have enjoyed another record year for the USA real estate markets. Many popular retirement areas in Mexico and Central America have also enjoyed significant appreciation. Heads Up: Fed interest rates have been raised for the 12th time and fewer buyers will be able to qualify for a loan. USA real estate listings are taking longer to sell and the upper end (above million) is going soft. We may soon see a USA buyers market across the board.
No bubbles are bursting but caution is advised. Allow for a minimum 3 - 5 year holding period, limit the use of leverage, increase rental reserves and avoid the get rich quick schemes. Anybody with a variable rate loan should convert to a fixed rate loan as soon as possible. If you are not forced to sell, a temporary slowdown will not be a problem and your real estate investment will continue to grow.
The dollar has lost near 10% value against the Peso since 2004. A weakening dollar has been followed by higher real estate prices in Mexico and other popular retirement areas in Central and South America. The Mexico real estate market is, in large part, fueled by U.S. investors. If, in fact, the U.S. real estate market slows down, so will U.S. equities flowing to Mexico, Central and South America. Australia and New Zealand will perhaps be less affected by a U.S. slowdown. Again, if you are not forced to sell, a temporary slowdown will not be a problem and your real estate investment will continue to grow.
Foreign Investment information is posted for Australia, Canada, Mexico, New Zealand and the United States. Find general investment, legal, tax and immigration information and resources.
News Briefs
October, 05 - The real estate boom is cresting, and the rate at which home prices appreciate should begin to slow significantly next year, according to the chief economic forecaster for the National Association of Realtors.
October, 05 - International real estate funds are searching for higher returns as gains slow in the U.S., Britain, France and other markets. Global cross-border real estate investment jumped 21 percent to $99 billion last year, according to Jones Lang.
October, 05 - Investment by overseas institutions in Chinese real estate will at least triple to more than $1 billion this year, according to Jones Lang LaSalle Inc., a Chicago-based real estate brokerage and manager. Planned investments total $35 billion, says Colliers International Property Consultants Inc..
October, 05 - GE Commercial Finance Real Estate, the world's largest property business, is to spend $5bn in Asia and $3bn in Mexico as it ramps up its exposure to the markets. GE Commercial Finance Real Estate directly owns $35bn of global property, $50bn including joint ventures and securitised debt. The business has increased its international exposure considerably, from 25 per cent five years ago to more than half today. The move to Asia and other newer markets such as eastern Europe and Mexico, comes amid fears that US commercial property has peaked. GE has cut its US property exposure from $12bn to $6bn in the last three years, Mr Pralle revealed.
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May, 2005
Mexico Real Estate News: Recent reports indicate that most foreigners may live comfortably on about $1,200 to $1,600 a month. This would include a modest home or apartment rental in the $250 - $500 per month range. Those who used to live on $300 a month, now spend about $600, but their lives are very limited. These figures include the cost of housing, food, local transportation or gas for your car, insurance and occasionally eating out. At the higher figures, a maid/cook is included. Please do not believe those who tell you that you can like a king for $600 or even $900 a month.
Older condos can still be found for under $100,000 in many popular resort areas but most newer projects are starting in the $200,000 and up range. A nice custom home in a preferred retirement area can be found in the $200 - 300,000 range. Beach front homes under $400,000 are getting tougher to find. Exceptions abound but tough to find on short trips.
Building cost can range from $70 - 100 per square foot but tough to find reliable contractors. Those with the ability to act as builder and hire locals have been known to end up with a high quality luxury home for under $50 per square foot.
Quality medical and dental services are available in most major resort areas at substantial savings when compared to USA cost. Seniors may find assisted living help for a fraction of USA cost.
If you believe that Mexico is a viable retirement option, it is highly recommended that stay in your area of interest for several months before making any serious decisions. Mexico can be heaven for some and hell for others. Spending a week or two in Mexico is most always a good short story with a happy ending. You need to learn about and live with the limitations of your preferred area.
Check back soon as we endeavor to bring you up to date news about living and buying real estate in Mexico.
