Snag a deal on Mexican real estate

Jim Cramer, the bombastic, high-energy investment guru and host of the CNBC show "Mad Money," told his audience last summer that he recently purchased three properties in Mexico. Why, Jim?

"Mexico is a big country and not every province, every state is involved in the drug trade," said Cramer, a magna cum laude graduate from Harvard. "It has to be one of the nicest places I've ever been ...

"It's not such a bad idea to diversify away from stocks," he said. "I think that out-of-favor real estate in Mexico that's easily accessible to Americans represents a great buy."

Given the winter weather in the Puget Sound, many grumbling residents are seeking consistent sun. Warm water would also fit. However, they are skittish to ask about Mexico, believing the entire country to be awash in blood, crime and drugs.

Adam McAbee, senior manager and second-home specialist for San Diego-based John Burns Real Estate Consulting, recently completed a five-month inspection of more than 180 actively selling projects representing approximately 17,000 units in the Puerto Vallarta/Manzanillo, Mazatlan and Los Cabos market areas.

Violence and crime are foremost topics in the U.S.; they were not mentioned as factors in the resorts -- the struggling U.S. economy was, however.

"I can tell you that people I meet in the respective markets down there generally laugh and shake their heads, noting that the violence almost never reaches the tourist areas. The recent Acapulco issues aside ..."

Crime figures seem to be easier to come by than home-sale numbers. Statistics on Mexican properties sold to U.S. citizens and other non-nationals are nearly impossible to obtain.

The National Association of REALTORS® has a sister organization within the country but neither compiles the number of properties sold to Americans. The country has no connected multiple listing associations or licensing requirement for salespersons. Hence, most sales activity has been anecdotal or gleaned from individual offices.

However, some credible research has begun to trickle in, including the John Burns study. The company gathered information on location, product type, home sizes, price points, absorption, buyer profile and amenities. One of its conclusions:

"... Mexico is too close, too beautiful and too affordable not to return to the "norm" of serving as a major tourist -- and second-home-buying destination -- in the coming years."

Here are a few other takeaways from the study regarding second-home buying in Mexico:

• The vast majority of visitors to the country are still Americans. The research indicates that they are coming back as buyers -- just not in "full force" until things improve at home. In the meantime, since the number of American buyers has diminished and/or they are focused on obtaining a "steal," near-term projects need to also target Canadian and Mexican buyers to keep sales momentum alive.

• In Puerto Vallarta/Manzanillo: Most agents agree that the market is still slow, but 2010 was a definite improvement over 2009.

• In Cabo San Lucas: One project sold at a rate of approximately 6.5 units per month (combined across two product lines) in 2010 -- driven heavily by a central location, distant views, good-quality amenities/lifestyle in place, and rock-bottom pricing.

"I was talking with another client about my work in Mexico," McAbee said. "I took a poll of the six people in the room. I asked who would go on vacation to Mexico right now. Half said they would go; half said no way.

"Even people within my company are the same way. Some are jealous I 'get' to go to Mexico; others are glad they are not the ones that 'have' to go. It tends to be a fairly polarizing question."

Jim Donahoe, recently returned to La Paz and said, the "sweet spot" for sales is approximately $230,000 near the city's waterfront with more Americans entering the market.

La Paz is not too big, not too small and not just a tourist place," Donahoe said. "There are places in gated communities for a lot less than $230,000, including one view condo building with all units for $159,000.

"Nobody asks about crime. They are only wondering if they have enough dollars yet to get here."

Inman

Top 5 Best Places to Retire Abroad

Experts in celebrating the next chapter in life, AARP The Magazine traveled the globe to discover the ultimate retirement destinations abroad. Factoring climate, expat community, cost of living, housing, health care, access to the U.S. and culture and leisure, AARP The Magazine reveals the top five locales in its September/October issue (www.aarp.org/magazine), available in homes and online today. See what regions in Mexico, France, Panama, Portugal and Italy have to offer--castles, palm trees, rain forests, grilled lobster--in their unique and unparalleled retirement experiences.

1. MEXICO--Puerto VallartaPuerto Vallarta, Mexico is the undisputed number one destination for American retirees. With its rich Indian and Spanish culture, lavish beaches and affordable real-estate, Puerto Vallarta offers the low-cost, laid back lifestyle retirees seek to find in a community.

Some Reasons we love it:

-- Climate: Winters--sunny, pleasantly warm; summers--rainy, humid hot
-- Expat Community: Estimated at 50,000 American retirees
-- Access to the U.S.: Excellent

2. FRANCE--Languedoc-Roussillon
Once remote, the Languedoc-Roussillon region is now just three hours from the bright lights and bustling energy of Paris via high-speed train. The area is steeped in history and art. Languedoc-Roussillon is also a destination for the outdoor crowd with picturesque hills and beach along its Mediterranean seashore.

Some Reasons we love it:

-- Climate: Mediterranean--hot and dry summers; cool winters
-- Cost of Living: Not cheap, but a comfortably frugal life can be had for $30,000 a year 
-- Heath Care: Excellent. French health care has been named the best in the world by the World Health Organization

3. PANAMA--Boquete
Panama is a smart choice for retirees who want it all. Not only does it feature attractive retiree destinations, Panama also offers an unbeatable package of retiree benefits and discounts. Boquete has a unique range of back-home amenities, from a golf course to high-end gated communities.

Some Reasons we love it:

-- Expat Community: An estimated several thousand
-- Housing Costs: A small house goes for $175,000; in a gated community, $250,000 and up. Rentals: about $600 a month for a two bedroom house
-- Culture and Leisure: Rainforest hiking, river rafting, bird watching and coffee plantation tours keep Panama a bustling location for leisure

4. PORTUGAL--Cascais
Many wonder why Portugal has long been overlooked by American retirees. A plentitude of golf, beaches, resorts and trendy cafe life makes Portugal one of Europe's most pleasant surprises for retirees.

Some Reasons we love it:

-- Cost of Living: A comfortable life can be had on $25,000 a year
-- Health Care: Good. Nearby hospitals include the well-regarded British Hospital in Lisbon
-- Access to the U.S.: Excellent. Direct flights to-and-from the U.S. fly out of Lisbon

5. ITALY--Le MarcheLe Marche, bordering the Adriatic, is beautiful region with vineyards, snow-capped mountains and beaches a plenty. It also prides itself on the best fish dishes in the country and is trendy enough to have snagged Dustin Hoffman as a tourism spokesperson!

Some Reasons we love it:

-- Climate: Mostly sunny
-- Expat Community: Relatively few; an international mix
-- Culture and Leisure: An incomparable mix of open-air opera festivals, Renaissance painting and architecture, wine tasting and nature reserves


RISMEDIA

2010 International Home Buying Activity

We live in a global marketplace. While all real estate is local, not all property buyers are. A significant share of home purchases are made by people whose primary residence is outside of the U.S. Find out which are the top five countries of origin for foreign home buyers and how these buyers are utilizing the services of REALTORS®.

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Foreign Buyers Taking Advantage of Slashed Prices

International investors bought 154,000 homes and condos in the 12-month period ending in May, and are continuing to take advantage of the weak dollar. The U.S. dollar has dropped 9 to 11 percent since June against foreign currencies like the Japanese yen, the European euro and the Canadian dollar. Another attractive feature is that, while the U.S. dollar has weakened significantly, the economy is showing signs of stabilizing along with the housing market. Nearly 46% of international home buyers paid cash for homes purchased, and the median price foreign buyers paid for a home was nearly $80,000 greater than the U.S. national median price. According to msnbc.com buyers from Brazil, Canada, France, and the Netherlands have paid mostly cash for second homes ranging from $6 million to $15 million in condo buildings.

World on the Mend

While housing markets in the world’s leading economies remain distressed, hope is on the horizon. According to globalpropertyguide.com of the 27 countries which have already published their Q3 data, 16 countries have experienced rising prices and falls in only 11 countries. Economies such as the UK, Canada, Germany, Singapore, and South Africa are finally noting positive price changes quarter-on-quarter after being negatively affected during the economic slump. Of this group, the rising prices in the UK, Canada, Germany, and South Africa are the first after suffering declines every quarter since 2008. While some markets’ increases are more modest than others, the over-arching trend is toward recovery. More information on specific housing markets is available at globalpropertyguide.com.

Tips for Buying Property Abroad

Anyone who has enjoyed a visit to a local winery, sampled the wares with cheese on a picturesque day and taken home a bottle only to later wonder, "how could I have thought this was good?" will appreciate that quick decisions based on ambience do not always make for wise decisions. So too with buying property in another country. While few would purchase a home abroad as casually as a bottle of wine, a quaint Tuscan villa or cottage on the water can be quite appealing. That said, impulse purchases can be a good deal, but a few basic tips can help to ensure it's a great deal. Help your clients make wise decisions on purchasing property abroad with these12 basics tips for buying abroad.

Optimism in the MENA Region

Abu Dhabi is projected to be the strongest performing market in the MENA region (Middle East/North Africa) real estate market over the next two years, according to a survey of 200 investors for Jones Lang LaSalle’s Second Investor Sentiment Survey. Overall, MENA property investors are much more confident than they were six months ago, resulting in more buyers than sellers. In addition to Abu Dhabi, Saudi Arabia and Qatar are expected to recover from the downturn first but there is a lot of support from investors for Dubai, generally regarded as the real estate "regional leader." Readsurvey highlights, or download detailed overview of Abu Dhabi market.

Stabilization and Recovery in Commercial Markets

"Back from the Brink… But What Next?" a new report issued by CB Richard Ellis sees some stabilization and recovery for the much of the worlds' commercial real estate markets at the mid-point 2009, with one notable exception: The U.S. The report notes the obvious indicators of weak market conditions but also identifies some positive developments, including initial signs of regional recovery. Highlights include an uptick in investment sales volume in Asia where the market has adjusted quickly and pricing may have hit bottom in some cities; stabilization of property markets in the Pacific region after 18 months of turmoil; and activity in the EMEA (Europe, Middle East and Africa) investment market inching up to €13 billion, from €11.6 billion in Q1 2009, with some expectation for further improvement in Q4 '09. Unfortunately, the CBRE report sites no signs of recovery for the U.S., where vacancy rates in the office, industrial and retail property markets continued to rise in Q2 2009. Read more details in the CBRE press release or download full report.

Are We at the Bottom?

Many see the housing market as the key to economic recovery but acknowledge that until its pereceived that the market has hit bottom, many would-be buyers will sit on the sidelines. A March 24 Good Morning America (GMA) segment suggests that maybe we're there. GMA reported on a influx of foreign and domestic "professional buyers" (investors who buy homes--sometimes in bulk and sight unseen--at bargain prices to later sell at a profit). Their presence typcially signals the market bottom, or near to it, and thus the beginning of a recovery. Read the story, or search the GMA site for "Real Estate Vultures" to locate the original video report.

2009 Global Market Report

Published annually, NAI’s Global Market Report provides an overview of market conditions in 213 commercial real estate markets throughout the U.S., Canada, Latin America, Europe, Middle East, Africa and Asia Pacific, with statistic-rich reports, easy-to-read charts and graphs. Snapshot market reports of key global cities are available online at no cost.

Is BRIC Still Poised to Lead Us to a Recovery?

The BRIC (Brazil, Russia, India and China) countries have been much ballyhooed as integral to global recovery. Their fast growing economies and sheer number of people (40% of the world's population), positions these economies to drive the market. Thought by some to be immune from the global recession, this was not the case, but Jones Lang LaSalle (JLL) forecasts that the BRIC real estate markets will recover faster than European and U.S. markets, with India and China leading the way. JLL predicts India’s property sector may begin recovery as early as year-end, and attract as much as $12 billion in real estate investment over five years. Billionaire investor Li Ka-shing predicts China will lead a global economic recovery and suggests investors buy shares and real estate (Bloomberg, March 26). As BRIC consumers flex their new-found muscle, retail investors are eyeing BRIC markets. Download NAI Global's report on the economic impact of the consumer consumption across the BRIC markets.

10 Priciest Cities to Own a Home

In the doom and gloom of today's economic and property market news, it's easy to loose sight of the fact that there remain the really wealthy for whom money is no object. Couple that with the softening in prices, and you have the potential for a mini boost in high-end sales. Monte Carlo is off the charts at $47,578 per sq. m. More reasonably, Moscow and London are just over $20K per sq. m. New York City is the only U.S. city on in the top ten at $14,898 per sq. m., making Mumbai a relative bargain in the #10 spot at $9,163 per sq. m. See the full list, along with additional market information.

Latin America Still Looking Strong

With much of the world in a downward spiral, Latin America remains a relatively good value. According to the Global Property Guide, many currencies within the region have partially followed the dollar down, but GDP growth has risen in select markets, and is up .1% in 2009, thus far, over 2008 for the entire 20-country region. Factors cited for the growth include globalization, which has put pressure toward adoption of sound economic policies; and retirees--many from the U.S. Get a detailed profile of the region and learn which markets are viewed as key picks.

Chinese Bargain Hunting in U.S.

Chinese people are signing up to come to the U.S. with the single aim to buy homes on the cheap. Tours are being organized by Soufun.com, one of China's largest real estate portals, for investors who want to take advantage of slumping U.S. real estate prices. But it's not cheap. Fees equal a one-year annual income for some, plus airfare, but the Chinese see this a long-term investment. Investors seek housing for young children who may wish to study in the U.S., to use while here on business trips, and/or to lease. Investors are also looking at commercial properties. Trips are being focused largely on east and west coast cities where there are large Chinese immigrant populations. Aside from bargain prices, Chinese investors are drawn to the U.S. due to limited investment options at home where real estate and stock prices peaked in Oct. '07. Economists estimate that tens of billions of dollars began leaving the country during 4Q 2008 as Chinese investors began bargain-hunting.

Japan one of the Cheapest Investment Destinations

Japanese government officials are talking about eliminating a 40% capital gains tax for most foreign investors, with an eye towards attracting some much-needed foreign investment capital. According to Bloomberg News, the government is planning talks with state-owned sovereign wealth funds from Saudi Arabia, UAE, Qatar and Kuwait to discuss more favorable investment conditions in Japan. Japan has one of the highest capital gains taxes, which has impeded foreign investment, contributing to the down climate. Only 4% of the funds managed by Japan’s private-equity and venture-capital comes from abroad, as compared to the 75% in the UK, 60% in the EU and 20% in the U.S., reports The Wall Street Journal. The economic news from Japan, as like other world regions, has been gloomy. In Q4 of 2008, Japan’s unemployment jumped from 3.9% to 4.4% as consumption fell 4.6%. As consumers abroad pull back on consumer spending, Japan’s population is unable to consume enough to offset the losses. The tax alteration could come as early as April 1 and boost investment from foreign funds by as much as 400% in the next few years, says Japan's Ministry of Economy, Trade and Industry (METI). If the Parliament passes the measure, the lack of a capital gains tax would make Japan, which is the 2nd largest economy in the world, one of the cheapest places to invest. While the METI website does not yet speak specifically to this plan, there is extensive English language information on inbound FDI.

France Retains Top Place in the World to Live

For the fourth year, France has earned International Living magazine’s top spot as best places to live in the world on its Quality of Life Index. The retirement and relocation publication compared about 200 countries in nine categories including, cost of living, culture, economy, environment, freedom, health, infrastructure, safety and risk, and climate. Information was combined from official government sources, the World Health Organization and The Economist. Then editors asked for opinions from knowledgeable people around the world. France scored high marks across the board, but its main appeal is its culture and leisure activities. For Americans seeking a European retirement home or investment opportunity, France is a relative bargain compared to six months ago when the exchange rate made the euro worth nearly $1.60. Currently the euro is worth roughly $1.30, a difference which translates into a more than a $50,000 savings. Following France on the list of top places to live are Switzerland, United States, Luxembourg, Australia, Belgium, Italy, Germany, New Zealand and Denmark. See the complete list of countries in order of overall rankings. Click on any country to view individual category rankings.

Foreign Investors Prepared to Spend More in 2009

Foreign investors in real estate expect to spend significantly more in '09 than they did in '08, according to the 17th annual survey of members of the Association of Foreign Investors in Real Estate (AFIRE). Compared to transactions completed by October 2008, foreign real estate lenders say they plan to increase lending by 54% globally and by 58% in the U.S. Equity investors plan to increase investment activity by 40% globally and by 73% in the U.S. Survey respondents hold approximately one trillion dollars of real estate, including $371 billion in the U.S. Respondents again ranked the U.S. as the country providing the most "stable and secure" real estate investments, by a wide margin at 53%. Germany and Switzerland tied for second most stable at 11.3%, Tied for 3rd were Australia and Canada, each with 4.8%. Half of the top 10 global cities favored by foreign investors are in the U.S., a shift from last year's survey where half of the top 10 cities were in Asia. Washington, D.C. reclaimed it status as the top global city for foreign investors' real estate dollars, deposing New York City, which was third is a close ranking with second-ranked London. Tokyo and Shanghai ranked fourth and fifth, respectively. When asked about best opportunity for asset appreciation, the U.S. was also named first with 37% of the votes. Brazil jumped 10 places into the #2 spot, replacing China, which dropped to #3, followed by the U.K. (up from 9th) and India (which fell from 3rd). Other key findings included that apartments were the preferred U.S. investment property, followed by office, industrial, retail and hotel, a shift from office being most preferred the past two years. Also, nearly 75% said a U.S. property’s “green” features influenced their purchase decision and were worth a rental premium. Survey respondents reported that finding attractive U.S. investment properties is becoming less difficult. Read a detailed summary of the findings.

NAR International Real Estate Transactions Report

International transactions in the production and consumption of goods and services are expanding. In calendar year 2007, the U.S. exported $1.15 Trillion of goods and $0.5 Trillion of services; and the U.S. imported $1.97 Trillion of goods and $0.378 Trillion of services. With the expansion of international trade, the flow of people across borders has also increased rapidly, and, therefore, the demand for real estate in both residential and commercial sectors in conjunction with international transactions has been on the rise. The New Mexico report presents recent economic and demographic data related to international business activity directly associated with the state.