2010-A Buyer's Market in San Miguel

buyersIn the last few months we have seen reports trickle in from realtors throughout Mexico, all with a similar message, “Buyers are back”. And, while no one is popping open the champagne as yet, at least they are finding something uplifting at the end of what began as a dismal year for the Mexican real estate market. Mexico was hit this year with a one-two–three punch of the global economic downturn, the overblown reporting on Mexico’s drug war and then the H1N1 flu virus. Combined, they were enough to keep tourists at home and make those considering purchasing property reluctant to enter the market until they could see how things would settle, both at home and abroad.

So, as we enter 2010, with a growing number of reports suggesting the economic crisis is over and economies around the world leaving recession behind, will investors feel more secure in buying property in Mexico? Here is what three of San Miguel’s most active realtors had to say about their feelings for the San Miguel real estate scene in 2010:

Philip Hardcastle: (Realty San Miguel): “I think San Miguel has picked up well since September/October of 2009, picked up substantially over the beginning of the year in the volume of sales. And, right now, it doesn’t appear to be slowing down. So, with the economy and the U.S. dollar, I’m hopeful for 2010.”

Alma Cecilia Ramírez (Colonial Real Estate): “The real estate market is starting to move. As a retirement and second home destination, San Miguel is recovering from the down market sooner than we were expecting. 2009/2010 has and will remain a buyer’s market, there are opportunities that buyers can get from this market, now that purchase prices are lower compared with last year, and negotiable. Clients are interested in property within the price range of $200,000 to $500,000 USD and there are good opportunities so long as buyers know where to search.”

Peggy Taylor (La Margarita Real Estate): “I feel very hopeful that things are going are going to start picking up in December and January through March. Prices have dropped, and most of the price ranges as well: and people are negotiating more, therefore it is a buyer’s market. We are not coming down 20% like they’re doing in the United States, but people are negotiating more. There are people looking in almost all price ranges, even the high end where we’ve had sales. We’re optimistic about 2010.”
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The new optimism is not just confined to local markets. On Nov. 13th, Dow Jones Newswire reported that Mexico’s largest banking concern, Grupo Financiero BBVA Bancomer SA., sees its fledgling cross-border mortgage business growing this year and in 2010 as Americans continue to buy second homes in Mexico despite a weak U.S. economy. “At least for us, cross-border mortgages have grown,” said Isidoro Sanchez, director of business development at BBVA Bancomer’s mortgage arm. “We will be closing 2009 with around $150 million in cross-border loans,” he added and, in reference to 2010 said, “We think the market is very big and we are betting on growth,”

 

TIPS FOR NEGOTIATING IN A BUYERS MARKET

1. Realize that good homes, in good locations will always command good prices. You may come across a ‘once in a lifetime deal’ from an owner who is over extended in the U.S. or elsewhere. However, those types of deals are nowhere as common here as they are north of the border. Remember, most homes in Mexico are owned outright, not financed.

2. Define your needs. It’s easy to get overwhelmed when there is a large array of properties on offer. Start out by being specific about what is absolutely necessary to you and what is optional, both now and for the future. A rooftop terrace may seem a great idea at the moment, but will you still find three flights of stairs appealing in five years?

3. Be willing to think outside of the box. When we asked realtors what buyers were looking for in 2008, the answer was unanimous: views and walking distance are what sell. If your willing to forgo the obvious, you can save substantially on total price and have more bargaining room.

4. Negotiate effectively. Realize that once someone has settled on a price, they are going to take low ball offers personally, and not well. Be creative, ask if the appliances are included or if the buyer is willing to repaint or undertake repairs.

5. It is crucial that you find a realtor that you can trust to help you find the right match and the right price. Remember, since SMA has no multiple listing service as such, there is no analyzing properties or prices with a just a few clicks of the mouse. Now more than ever, it is important to establish a working relationship with a realtor who knows the market and can find you the best home at the best price.

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