BILLION$ OF DOLLAR$ ARE BEING INVE$TED AND $PENT
IN NORTHWESTERN SONORA, MEXICO ONE HOUR FROM THE USA
10,000 NEW HOMES FOR AMERICANS AND CANADIANS
In spite of the negative press about the drug wars and the bad economy, private developers and the Mexican Government are investing and spending billions of dollars in Northwestern Sonora, Mexico and for many good reasons. Almost every person I talk to says that this is not the time to be risking billions of dollars with the world economy in shambles in great part due to the collapse of the USA real estate market due to Wall Street greed and bad lending practices that tempted tens of millions of USA consumers into financial ruin…So why are these developers and the Mexican Government gambling billions on this area in Northwestern Sonora, Mexico to develop real estate for Americans and Canadians?
To fully understand the reasons why all of this activity is happening right now with every economic indicator pointing in the opposite direction, you first must know about the recent history of the area and why the first attempt by developers failed in this region and why this second effort in all probability is going to be very successful this time around.
This region of Mexico is destined to be the best of both worlds because 31,500,000 Americans can drive to get there and when they arrive they will find some of the very best real estate values in all of Mexico until the demand drives the prices back up. In fact, in all probability this region could be the strongest real estate market Mexico will have for the next three generations. One of the primary reasons is because Americans can drive their own cars there and keep them there without paying the import taxes on their car, boats and motor toys. Another factor is the Mexican Government is investing in quality infrastructure and services Americans want and need to accommodate their lifestyles.
Looking at a map of this region that included Arizona, Southern Nevada and Southern California these aforementioned smart people in Mexico and the United States figured out there are 31,500,000 people in the United States within a 400 mile distance from the last and most desirable virgin beaches within driving distance from the second largest segment of the entire USA economy.
Early in the first two years of this new millennium some very smart people in power on both sides of the border of Mexico and The United States, had a very good idea that was based on the real estate mantra that has been true from the beginning of time all the way back to the days when the definition of prime real estate was considered to be a large dry cave near a fresh water stream with plenty of fish and lots of game to hunt near by and it situated on high ground with a commanding view. I am sure the phrase LOCATION, LOCATION, LOCATION is a familiar chant you all have heard before from every real estate professional and more often than not, from every arm chair expert as well. This area of Northwestern Sonora, Mexico screams the three L’s like no other region in all of Mexico or the USA, however it seems to be falling on deaf ears and closed eyes “but not for very much longer”.
The reasons for this deaf and blind condition is being caused in part because everyone is still in shock from the bubble bursting and that fact is being compounded by the non-stop sensational network media coverage of the drug wars and the US State Department giving the false perception that all of Mexico is unsafe and that is just not true.
Now that there are positive results with the numerous apprehensions of narco gang leaders as of late, or them being killed while resisting arrest (even better because they can not run their illicit businesses from jail), the traveling public’s opinion is changing rapidly and they are much less afraid to travel to Mexico now. This fact is because they know these areas of extreme violence are isolated in certain areas of different parts of Mexico and that is much different than the entire country being unsafe. Congratulations to President Calderon are in order for him taking action and staying the course. Travelers going to Mexico should be cautious at all times just as if they were in areas of Atlanta, St Louis or Detroit (not to mention going to a Safeway in Tucson, AZ to see your local Congresswoman on a Saturday morning). The international border does not differentiate the violence perpetrated by crazed gunmen or gangsters…the media does that…and to that end gives Americans a false sense of security in the USA as it is plenty dangerous here where guns are legal. Let’s all be fair to Mexico and intelligent about the situation there and elsewhere, the truth in today’s world is “you need to be careful every where you go” and that is the point.
Mexico offers the best cost of living and quality of lifestyle within several hours driving, or flying distance from the USA and Mexico has some of the best weather, food and most diverse travel destinations in the world. Now that the cost of living, health care, our debt, property and other taxes are soaring, our real estate values plummeting, it is no surprise that living in Mexico (especially one hour from the USA Border) is becoming very appealing and it is guaranteed to increase as the best kept secret in North America is discovered.
Puerto Penasco, a fishing community and a stretch of beach known as Rocky Point, are located less than one hour from the USA border on The Sea of Cortes. They have been the backyard beach, fishing and yachting community for Phoenix, and Western Arizonian’s for decades. While the boom town of Rocky Point was being built the infrastructure to deliver the Americans from California and Western Arizona via a new toll road and the first 100 miles of a new intercoastal highway were also being built to cut two hours off of the driving time for Californians to get to Rocky Point.
The delivery system for people to drive from the USA to the Northern Sea of Cortes is now complete. Waiting along this breathtakingly scenic, New Intercoastal Highway that few people have ever seen where the desert meets the Sea of Cortes they will find the best real estate prices and affordable cost of living in Mexico today.
Why Puerto Penasco and Rocky Point Failed the First Time!
From 2002 through 2006 the place called “Rocky Point”, a water front strip of property across the bay from Puerto Penasco, know as Sandy Beach, saw over 7000 condo’s and houses sprang up from the desert sands like mushrooms in a cow pie after a warm summer rain in Texas.
At the peak of this building boom and buying craze, hoards of US buyers were pulling easy to get cash from home equity loans in the USA as if their homes were ATM machines. They literally lined up by the thousands to buy condos, so now the beginning of the bubble bursting on both sides of the border had started with a bang.
As the sales skyrocketed to lofty heights in Rocky Point the US housing market started to unravel when the toxic mortgage paper in the United States started to rise to the surface like a backed-up toilet bowl. The panicked Wall Street money mongers and Washington politicians started looking for ways to explain to the world about the smoke and mirror business practices of bundling mortgages for investors who never knew that a good number of the mortgages were written and approved by underwriters who had their eyes closed and the lights turned off when they were making the bad loans. With that practice in motion, which was fueled by the greed for the fat loan commissions paid to the mortgage industry and the Wall Street brokers marketing the mortgages to investment bankers. This feeding frenzy turned the “American Dream” into the worldwide nightmare that has kept millions of unsuspecting Americans sleepless for the past 4 years and the reality is, we all actually came within days of seeing and feeling the total collapse of the entire world economy(for real).
If you have cable television service and HBO you really should watch the HBO movie “Too Big To Fail” it is the best definition to date on how and why we (the USA) are upside down in the world of finance (and how every country is affected by the USA debt) it also explains the TARP fund and the other bail-outs from Bush to Obama. The casting was as good as the writing; Warren Buffet was played by a blondish grey Ed Asner he was great as is the entire cast, who in part are William Hurt, Paul Giamatti and James Woods to name a few it is based on the real timeline as things unfolded (like the T.V. hit show 24) it is a real thriller based on facts.
For the first, second and third tier investors in Rocky Point condo’s and beach front homes (not to forget about the blind developers who’s debt now could not be serviced) it was game over with the rare exception of those developers who had sold out and had the client base to maintain the HOA. But for the vast majority of Puerto Penasco and Rocky Point it has been a disaster for the past 4 years.
Some of the buyers (a great number of them who financed their Rocky Point condo’s and houses), have walked away from their properties in Mexico. What is even worse for some of these people the equity they took from their homes in Phoenix and Southern California has caused them to lose their homes there as the market has dropped so low, (and it is still dropping) that their homes are not worth any where near what they owe let alone what they paid for them.
Why Puerto Penasco and Rocky Point Should be a Big Successful Going Forward!
Prices for real estate in Rocky Point are at an all time low just 4 years after being the fastest growing resort development in Mexico. Now that the landscape is littered with failed and uncompleted projects, all of this past misfortune for those people who bought into the 2002 to 2006 boom ends up being a real windfall for the next few years for the smart investors with cash in hand. For these smart money investors who can analyze the facts and conclude that buying now in some of these projects that did not fail and have greatly reduced prices on new condominium units and slightly used units, will see very clearly that right now is the very best time to buy in Rocky Point and the greater Puerto Penasco area.
There are several failed projects that have been bought from the banks and developers, by US Companies as well as several Canadian Groups. This activity sends a clear indication that the market is at the low end and the time to buy is now or very soon. The upside is slowly edging back though I am of the opinion it will never reach the high prices seen in the past due to the sobering reality consumers now have and the lenders tightening loan qualifications for buyers and the heavy (too heavy in many cases) restrictions that lenders are enforcing to loan money to developers. As the existing inventory is absorbed at Rocky Point by those buyers who resist the mega master planned communities like the Mayan Palace (where retail pricing is being practiced) there will be new developments one hour further West on the New Intercoastal Highway that takes off two hours of round trip travel time for Californians.
Some property owners who paid cash for several units now want to cut their losses and are willing to sell one of their properties at a great loss to generate cash to cover the carry on their remaining property. For the duration of the down turn market to have some of their liquid cash back in their hands would be a great relief. These types of properties are the first to sell, but with some research there are still some of these great bargains available.
Many people think Rocky Point is the best buy in Mexico for the low prices per sq/ft and the close proximity to the USA border (approximately 1 hour from Arizona). Puerto Penasco also has a modern well equipped hospital (several years new) that accepts Blue Cross Blue Shield Insurance. There are Dental Clinics and general medical clinics in Puerto Penasco, as well as restaurants with good food and low prices. Several Americans have formed social clubs for different interaction gatherings on a regular basis.
Puerto Penasco is crazy about baseball and there is a small stadium on the main street coming into town that hosts farm league teams from Mexico and the USA, locals and Ex-pats love the baseball season. Being a fishing community Puerto Penasco always has fresh sea food and at very good prices when you buy at the docks off the shrimp and fishing boats. The state of Sonora is known for its grass feed beef and it is available at good prices from several butcher shops and grocery stores making the area a “surf and turf heaven”.
Grupo Vidanta is one of the biggest and most financially sound developments companies in Mexico, has increased their spending on infrastructure, amenities as well as condominium units and single family homes for the future baby boomers they expect to cross over the border in droves like a tsunami somewhat reminiscent of Santa Anna’s troops rushing the Alamo Chapel vying for seats in the front row pew. http://www.grupovidanta.com.
With The H1N1 (Swine Flu Pandemic), the drug wars in Mexico, the failed real estate market and the mortgage banking boondoggle in the USA over the last 4 years, it has created a fast growing pent-up demand that Grupo Vidanta is planning to fulfill that demand coming to Mexico at one of the best beach front locations in Northern Mexico. The Mayan Palace mega-plex golf resort, hotel and residential community owned by Grupo Vidanta is located just one hour from the USA border and they are betting the next thirty years will prove them to be the biggest providers of homes for migrating Americans and Canadians. Grupo Vidanta also paid for the construction and manages the first privately funded and operated International Airport in Mexico that opened 18 months ago Nov 2009; it is located directly across the New Intercoastal Highway from the Mayan Palace mega-plex golf resort, hotel and residential community.
ESCAPEARTIST TOP TEN REASONS FOR YOU TO CONSIDER THIS AREA OF MEXICO
- LOCATION, LOCATION, LOCATION
- Low real estate prices with a great selection
- Fabulous beaches with warm waters
- New International Airport
- Less than a one hour drive from the USA on Brand New Highways
- Quality Medical / Dental facilities low prices
- No taxes on your personal cars, boats and motor toys
- Activities for Boomers, Adult Children of Boomers and the grandkids too!
- Great fresh foods at reasonable prices
10. Unique plant and wildlife indigenous to the region
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About the author; Henry Altman is the CEO of Escapeartist Mexico, a real estate developer & property owner in Mexico and the former President of Coldwell Banker Affiliates of Central America. For more information on this article or Escapeartist Mexico please opt-in with your name e-mail address and phone number and Henry will contact you.