July 24, 2008
To invest or not to invest in Mexican real estate?
Of course this question might not be applicable to the large group of investors already burnt by the US real estate.
Still, there are probably plenty of people who has visited Rocky Point (Puerto Peñasco, Sonora) and other beach areas on the Sea of Cortez and fell in love with it. I know we did. I and my husband rented a condo for a few days in the "Las Palmas" beachfront resort in Rocky Point - http://www.laspalmas-mex.com/ back in March of 2006.
Puerto Peñasco (Rocky Point), Condos and Hotels
Our short vacation was awesome and it was nice to be able to reach Mexican paradise in mere 3.5 hours of driving from the desert of Tucson, Arizona.
Las Palmas Condo, Rocky Point (Puerto Peñasco), Sonora, Mexico
Soon after our arrival, sitting on the Condo's balcony and enjoying the magnificent view of the Sea of Cortez, we started to discuss a possibility of owning one of those Puerto Peñasco Beach Condos. Next day, exploring the downtown of Rocky Point, we stopped by the Long Realty's Rocky Point office. There were plenty of properties available for sale, but quite away from where we were staying. Many for sale homes and condos were a brand new projects, still in the development phase. Being aware of some issues with Mexican projects and their possibility to be stuck in those phases forever, we were more inclined to invest in the currently existing property.
Back at Las Palmas, we discovered that a few Condos were for sale, but 2BR/2BA were priced well above $400,000 - a ridiculous amount, compared to the prices of Luxury Condos in Tucson - barely touching $200,000 in the midst of housing market boom. In addition, hearing the story of Las Palmas Casitas (3-4BR homes) appreciating over 100% in the past 2 years (from original $600K+ to $1.3MM+) , we realized that it was simply too late to pour money into this market.
As such, we spent more time on the beach and in the restaurants, enjoying wonderful weather and delicious culinary creations.
"The Reef" restaurant in Puerto Peñasco (Rocky Point), Sonora, Mexico.
…
In July of 2008, browsing through the real estate articles in the Arizona Daily Star, I saw a headline that caught my attention: "Investors left holding sand as condo deals falter, go bad in Sonora" written By Gabriela Rico, Tucson, Arizona | Published: 03.09.2008.
If the question in this post title has anything to do with your future plans, I'd suggest to go through the trouble of registering with Arizona Daily Star and read this article, otherwise you might end up burying your money in the beautiful Sonoran sand.
Filed under Catalina Foothills Real Estate, Foothills Insider News, Luxury Life Style, Tucson News by Anjelina
Comments on To invest or not to invest in Mexican real estate? »
Perhaps you are unaware of the large number of re-sale condos available at the Sonoran Sun, Sonoran Sea and Sonoran Spa. These are well established developments and due to the current real estate market many are priced as great buys. Once the market turns around, and it will, you will not be able to touch properties at current prices.
Loving this blog. Great post.
Manuel
As always I find that a negative micro view of investments always over shadows the bigger more successful picture. Combine that with what's happening in the states and I will keep my beautiful piece of the beach at the Sonoran Sea and realize that like all investments, wether in my primary home in Tempe or Mexico, the work investment means risk, not guarantee! Jim
Another point which bears mentioning regarding the price comparison between Rocky Point and Tucson — we're talking gorgeous beachfront.
Dear Veronica and Jim,
The beach in Rocky Point is really beautiful and of course it is very compelling to own a "piece of it".
Thanks to your comments, I was encouraged to do additional research and figure out the current state of Sandy Beach real estate.
Here is what I found:
1. 9th Story Views, Las Palomas- $275,000 USD
Listing #: n/a
Magnificent new Condo on the pristine beaches of Playa Vista. Stunning outdoor patio & views with access to all bedrooms, travertine floors, granite countertops and interior decorating.
Bed: 1
Bath: 1
Sq Ft: 1050
2. Sandy Beach Resorts (Puerto Penasco), "Lowest$ 1 Bedrm OceanFront in Las Palomas" - $294,000 USD
MLS® #1135670
Address: Las Palomas Cordoba 502
Size: 1139 sq. ft.
Style: Single Story
Type: Condominium
City: Puerto Penasco/Rocky Point
Bedrooms: 1
Bathrooms: 1
3. Sandy Beach, Sonoran Sun One Bedroom - $329,000
MLS # 610E
Type : Condo
Bedrooms : 1
Bathrooms : 1
4. Sandy Beach Resorts (Puerto Penasco), "Fantastic Views of Sea and Old Port", "Great Opportunity" - $345,000 USD
MLS® #1135685
Address: Las Palomas Cordoba 905
Size: 1139 sq. ft.
Style: Single Story
Type: Condominium
City: Puerto Penasco/Rocky Point
Bedrooms: 1
Bathrooms: 1
5. Sonoran Sea (Puerto Penasco/Rocky Point), "Cash or Terms!" - $359,900 USD
Size: 1000 sq. ft.
Style: Apartment
Type: Residential
City: Puerto Penasco
Bedrooms: 1
Bathrooms: 1
6. Sandy Beach Resorts (Puerto Peñasco), "Price to go", "Lowest Priced 2 Bedroom" - $239,000 USD
MLS® #1135777
Address: Princesa C 201
Size: 1147 sq. ft.
Style: Single Story
Type: Condominium
City: Puerto Penasco
Bedrooms: 2
Bathrooms: 2
7. Sandy Beach Resorts (Puerto Peñasco), "CASH" - $310,000 USD
MLS® #1135781
Address: Princesa B 208
Style: Single Story
Type: Condominium
City: Puerto Peñasco
Bedrooms: 2
Bathrooms: 2
8. Sonoran Spa "CUSTOM FINISHES AND AMAZING VIEWS", "FULLY UPGRADED" - $349,900 USD
Style: Single Story
Type: Condominium
City: Puerto Penasco/Rocky Point
Bedrooms: 2
Bathrooms: 2
9. Sandy Beach Resorts (Puerto Penasco) - $359,000 USD
MLS® #1135796
Address: Sonoran Spa W 206
Style: Single Story
Type: Condominium
City: Puerto Penasco
Bedrooms: 2
Bathrooms: 2
10. Sonoran Spa "OWNER WILL CARRY, Never In Rental Pool!" - $369,000 USD
Size: 1329 sq. ft.
Style: Apartment
Type: Condominium
City: Puerto Penasco/Rocky Point
Bedrooms: 2
Bathrooms: 2
11. Sonoran Sea "Gorgeously Furnished", "180 degree Sea view" - $409,900 USD
MLS® #07-032
Size: 1400 sq. ft.
Style: Single Story
Type: Condominium
City: Puerto Penasco/Rocky Point
Bedrooms: 2
Bathrooms: 2
12. Sonoran Spa "RARELY USED PENTHOUSE", "UNBELIEVABLE" - $439,900 USD
Size: 1200 sq. ft.
Style: Single Story
Type: Condominium
City: Puerto Penasco/Rocky Point
Bedrooms: 2
Bathrooms: 2
13. Sonoran Sun "Gorgeous Sonoran Penthouse Condo", "Suitably Priced" - $465,000 USD
Size: 1500 sq. ft.
Style: Single Story
Type: Residential
City: Puerto Penasco/Rocky Point
Bedrooms: 2
Bathrooms: 2
This is just a brief list of available Condos/properties for sale that I found through the Internet and is given here for information purposes only. I am neither licensed to sell real estate in Mexico, nor inclined to do so. If you want to find a real estate agent who sells condos and homes in Rocky Point, please do your own research, or contact me and I'll refer you to an agent.
Meanwhile, from the above list, it looks like prices have somewhat gone down - at least now for $400K+ one can buy a penthouse, not just a regular 2 BR.
Still, considering the growing number of foreclosures and short sales in the US, I am doubtful American investment in Mexican real estate will continue uninterrupted. To me this means that prices are still yet to reach the bottom.
In a few months, I am planning to rent a Casita and take all the family for the next vacation. I am sure both boys will enjoy running on the sandy beach, while adults wouldn't bear any risk associated with the investment.
And who knows, at that time we might find something worthwhile the investment.
Mexico looks inviting! Nice blog!