Market Geography

Mexico is one-forth the size of the USA with an area of 758,400 square miles. Mexico comprises of the federal district of Mexico City plus 31 states. The following is the list of states in alphabetical order: Aguascalientes, Baja California, Baja California Sur, Campeche, Chiapas, Chihuahua, Coahuila, Colima, Distrito Federal, Durango, Guanajuato, Guerrero, Hidalgo, Jalisco, Mexico, Michoacan, Morelos, Nayarit, Nuevo Leon, Oaxaca, Puebla, Queretaro, Quintana Roo, San Luis Potosi, Sinaloa, Sonora, Tabasco, Tamaulipas, Tlacala, Veracruz, Yucatan, and Zacatecas.

Who Buys in Mexico

A majority of foreign real estate buyers come from the USA. Canada is second. Third, is Latin America. The European Union countries rank in fourth place.

Factors That Impact Property Values Include:

Access: roads, airports, and harbors
Infrastructure: water and waste, communications, telecommunications, and streets
Community: presence of other expatriates
Services: hospitals, retail stores, medical facilities, grocery stores, and restaurants
Attitude: acceptance of foreigners and newcomers by the locals
Climate: warm weather, year-round spring, or “some like it hot”
Atmosphere: traditional, colonial, or relaxed
Recreation: fishing, golf, ecotourism, cultural activities, and boating
Development: variety of property types and price ranges
Security: condo units, self-contained, or gated communities
Future development: recreational, commercial, and residential
Supply and demand: hot seller’s market

Types of Buyers Include:

Retirees: Retirees are attracted to the low cost of living and the mild climate. There are also many well-established expatriate retiree communities in areas such as Ajijic and Lake Chapala. Usually, retirees prefer areas within easy driving distance from the border, giving them greater access to medical care. Puerto Penasco is one such place located south of the Arizona border. Although there is quality healthcare in Mexico, Medicare will not reimburse expenses incurred outside of the USA. Additionally, retirees can still receive their social security checks and many have them deposited directly into a U.S. bank so that they can be drawn on by ATM withdrawal or transfer.
Second and Vacation Home Buyers: Second and vacation home buyers purchase property based on factors such as easy access, appreciation potential, affordability, recreational enjoyment, and current rental income. Some even plan on having their vacation home become their retirement home in the future.
Investors: Important factors for investors include access, appreciation potential, affordability, and current rental income. Some investors have plans for future development and thus purchase a residence with adjacent vacant land. Investors may also be interested in purchasing multiple properties. Some even purchase property for its flipping potential.

Areas Popular with Foreign Buyers of Real Estate:

Baja (Sea of Cortez): Loreto, Todos Santos, Los Cabos (Cabo San Lucas and San Jose del Cabo), La Paz (ferryboat to mainland Topolobampo and Mazatlan), Ensenada, San Felipe, and Santa Rosalia. Commercial cities include: Mexicali and Tijuana.
Pacific Coast: Acapulco, Nuevo Vallarta, Puerto Vallarta, Zihuatenejo, Manzanillo, Ixtapa, Mazatlan (ferryboat to La Paz and Baja), Guaymas (ferryboat to Santa Rosalia and Baja), Bara de Navidad, Puerto Penasco (Rocky Point), Puerto Escondido, Nayarit, Puerto Libertad, Punta Delfin, Liberty Cove, and Huatalco. Commercial cities include: Mazatlan and Topolobampo.
Gulf Coast: Cancun, Playa del Carmen real estate, Cozumel, Costa Maya, Tulum, and Riviera Maya. Commercial cities include: Tampico, Veracruz, Campeche, Progresso, Merida, Ciudad Victoria, Matomoros, and Villahermosa.
Interior: San Miguel de Allende, Cuernavaca, Aguascalientes, Guadalajara, Lake Chapala, Ajijic, Morelia, Oaxaca, Guanajuato, Palenque, and Barrancas de Cobre. Commercial cities include: Juarez, Puebla, Toluca, Chihuahua, Reynosa, Guadalajara, Hermosillo, Monterrey, San Luis Potosi, Leon, and Mexico City.

Expatriate Communities

There are many well-established communities comprising of foreign visitors and residents known as expatriate communities. The following is a list of cities with expatriate communities:

Pacific Coast: Mazatlan, Nuevo Vallarta, Acapulco, Puerto Vallarta, and Barra de Navidad
Mild Climate: Ajijic, Lake Chapala, Guadalajara, Chula Vista
Traditional Setting: Cuernavaca, San Miguel de Allende, Morelia, Guanajuato, and Oaxaca.
Baja Coast: La Paz, Loreto, Los Cabos, and Todos Santos.
Proximity to the USA: Ensenada, San Felipe, and Puerto Penasco.
Gulf Coast: Mayan Riviera, Cancun, and Playa del Carmen.

Fonatur Developments

Fonatur’s purpose is to stimulate development of tourism sites and infrastructure. One of their most successful developments is Cancun. Before 1970, Cancun was nothing but tropical forest, sand dunes, and empty beaches. Now Cancun is responsible for one fourth of all the tourism revenue that is applied to Mexico’s GDP. After only five years of development, there are now 18,000 inhabitants, 5,000 jobs, and 1500 hotel rooms.

If you are a real estate investor planning on investing in Mexico, the benefits of following Fonatur’s future development plans are obvious as they are sure to become the next “hot” destination. Fonatur development areas include: Ixtapa, Zihuatenejo, Loreto, Los Cabos, and Huatulco. Fonatur’s future developments include: Barrancas del Cobre, Riviera May, Costa Maya, Campeche, Tamaulipas, Palenque, and Nayarit.

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