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surebought

Jan 2, 2012, 10:18 AM

Post #1 of 11 (2453 views)

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It's a buyers market with no buyers. Why aren't Real Estate prices plummeting?

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People ask me this all the time in my town. People coming down from the States like Carpetbagers after the US Civil war looking to take advantage of the locals by buying up Real Estate cheap. Well one of the locals said it best. "If someone wants to give me the ridiculous price I am asking, then I will take it and run. But if it doesn't sell, I will just will it to my children. I don't owe any money on it so there is nothing pressuring me. And besides I would have to pay enormous taxes that the PAN government has imposed on property transfers." This last point might not be true, but it is etched in the minds of the typical local Real Estate Seller and it is a big factor in his asking price. So years go by and almost nothing sells. The last time there was panic selling was in 1994. I bought four properties that year. Mexico has really stabilized since then.

stevebrtx

Jan 2, 2012, 11:44 AM

Post #2 of 11 (2430 views)

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Re: [surebought] It's a buyers market with no buyers. Why aren't Real Estate prices plummeting?

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You got it right, in TX I was looking $6K a year in tax for starters, here I rent a comporable property with taxes of $200 a year. However, I told the owners I was leaving next year and they came back with a heck of a deal to keep me here so I'd say the better deals are going to be to rent and who in their right mind would buy in MX today? I got a note from friends in TX the other day wanting to consider retiring here and wanted to know the usual things and noted they would retire in 10 years, I told them to check back in 9 1/2 years, things are changing and will change a lot by then and no one knows for the good or bad.
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TxMex

Jan 3, 2012, 6:56 AM

Post #3 of 11 (2301 views)

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Re: [surebought] It's a buyers market with no buyers. Why aren't Real Estate prices plummeting?

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I was just dealing with this. The fellow that owns the house I rented a few years ago is convinced that he can talk me into buying it...after all...ALL Gringos are rich(I am so tired of this). It is in a lovely location on the side of a mountain. Freezing cold in the winter. 4wheel drive only access and you still have to hike up to the front door a good ways. No TV, no internet, no cell phone signal and no chance of getting any of that any time soon. He very benevolently told me he would let me buy this house for the bargain price of $1,500,000.00 pesos or approximately $394,737.00 US. I have tried repeatedly to assure him that I wouldn't spend that kind of money on a house in the US with all the latest conveniences, but it is like talking to a brick wall.
Absolutely no way I'll pay a fraction of what is asked for property here. I will probably rent for the foreseeable future. Besides, since real estate moves so slowly in Mexico....what would you do it a really horrid neighbor moved in? It's not like you can complain and accomplish anything. It's much better to be able to move to a new location if necessary.

joaquinx


Jan 3, 2012, 7:49 AM

Post #4 of 11 (2280 views)

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Re: [TxMex] It's a buyers market with no buyers. Why aren't Real Estate prices plummeting?

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With the history of the peso and banking in Mexico, the possession of property is to many, if not all, Mexicans is the best investment. All properties are up for sale at outrageous prices. Of course, no one wants to sell, but if they can get a gringo (or anyone) to buy at their asking price, so much the better. They will take the cash and buy two properties. Then put another two outrageous prices on them.

Put money in the bank? And then wait for devaluation? Never happen. Put money in the stock market? Only for the very rich. Property is gold.
_______
My desire to be well-informed is currently at odds with my desire to remain sane.

morgaine7


Jan 3, 2012, 7:52 AM

Post #5 of 11 (2276 views)

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Re: [TxMex] It's a buyers market with no buyers. Why aren't Real Estate prices plummeting?

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Quote
He very benevolently told me he would let me buy this house for the bargain price of $1,500,000.00 pesos or approximately $394,737.00 US.
Well, I'd definitely go for the "bargain price" in pesos. 1,500,000.00 pesos is closer to $110,000.00 US. Are you sure you understand the asking price correctly?

Kate

Vichil

Jan 3, 2012, 8:40 AM

Post #6 of 11 (2263 views)

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Re: [TxMex] It's a buyers market with no buyers. Why aren't Real Estate prices plummeting?

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I think you are confused about rate of exchange, you may want to invest in a calculator before making an offer on a house in pesos....we all make mistakes but that is a big one!!

chicois8

Jan 3, 2012, 9:38 AM

Post #7 of 11 (2241 views)

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Re: [TxMex] It's a buyers market with no buyers. Why aren't Real Estate prices plummeting?

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at todays exchange rate 1,500,000 pesos = $107,630 USD........

panama john

Jan 3, 2012, 9:57 AM

Post #8 of 11 (2228 views)

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Re: [chicois8] It's a buyers market with no buyers. Why aren't Real Estate prices plummeting?

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That's still a lot of money for a property with no services.

richmx2


Jan 3, 2012, 10:39 AM

Post #9 of 11 (2211 views)

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Re: [surebought] It's a buyers market with no buyers. Why aren't Real Estate prices plummeting?

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The title on your post kinda, sorta suggested the reason. Unlike the U.S., most people do not see a house as a way to earn money, but as a place to live. Sure, property is an safe long-term investment, but often seen more as a family asset and something only sold if it doesn't have a familial use. My landlady owns not just my house, but the one downstairs (I'm on a hill and the houses are on top of each other) which was for rent, until she had a couple of nephews all going to the local university. It's occupied now, but I'm not sure my neighbor isn't another relation of some sort.

As it is, Mexican banks weren't unduly ruffled by the "banking crisis" in the rich countries, in good part because mortgages and small-time real estate "investors" aren't all that important.


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TxMex

Jan 3, 2012, 11:49 AM

Post #10 of 11 (2187 views)

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Re: [morgaine7] It's a buyers market with no buyers. Why aren't Real Estate prices plummeting?

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Oooops...I obviously hit the wrong key. Note to self....no more doing math before coffee. No matter the exchange rate....it's too much for the house.

arbon

Jan 3, 2012, 1:50 PM

Post #11 of 11 (2150 views)

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Re: [TxMex] It's a buyers market with no buyers. Why aren't Real Estate prices plummeting?

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I was just dealing with this. The fellow that owns the house I rented a few years ago is convinced that he can talk me into buying it...after all...ALL Gringos are rich(I am so tired of this). It is in a lovely location on the side of a mountain. Freezing cold in the winter. 4wheel drive only access and you still have to hike up to the front door a good ways. No TV, no internet, no cell phone signal and no chance of getting any of that any time soon. He very benevolently told me he would let me buy this house for the bargain price of $1,500,000.00 pesos or approximately $394,737.00 US. I have tried repeatedly to assure him that I wouldn't spend that kind of money on a house in the US with all the latest conveniences, but it is like talking to a brick wall.
Absolutely no way I'll pay a fraction of what is asked for property here. I will probably rent for the foreseeable future. Besides, since real estate moves so slowly in Mexico....what would you do it a really horrid neighbor moved in? It's not like you can complain and accomplish anything. It's much better to be able to move to a new location if necessary.
That would have been a few years ago, when the Mex peso was 3.8 to the U.S.Dollar...1994?
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