31/05/2022
In my capacity as broker for Live Chapala, prospective home buyers often ask me whether the real estate market here in Lakeside will continue to see such significant gain as it has in recent years. What they're really asking is, if I invest in Mexican real estate now, can I expect my property to hold its value at minimum or continue to appreciate?
The following article is intended to clarify some of the other market forces that are interrelated with the housing market and continue to drive up demand and, thereby, price. And I've written it both for the interest of those considering relocation to Mexico as well as those already living here who own Mexican real estate.
Of course you can't have a conversation about real estate in general without discussing location in specific, particularly those areas favorited by expats, and whether or not they will continue to be a good investment.
So, rather than talk about housing per se, I'd like you to look at the images that I've screenshotted for you above. I just got done watching a disturbing report about exceedingly high gas prices which was immediately corroborated by a New York Post article showing that gas stations in Washington state (where I lived for over 20+ years) are literally being programmed to be able to display prices of $10 per gallon. That is not a misprint unfortunately and I will link to the source article in the comments below for your reference.
As you know, the big oil companies always tell us that the high price of gas isn't gouging but based simply on supply and demand. And, the supply is not meeting the current demand even at the high prices they are currently charging. What's more, gas stations both on the east and west coast are actually running out of fuel which leads me to believe that similar shortages will start occurring in other States.
Of course the next move to curb the appetite for fuel is to keep jacking up the prices... Average people finding themselves caught in a vicious cycle. Without gas, how do you get to work? How do you pay your mortgage? How do you keep the house warm or cool and food on the table? What choice do you really have to avoid the entire house of cards collapsing in and around you? If that's not stressful, I don't know what is 🥺
But here's the really alarming statistic. In the second image you can see a graph of the median amount of savings per household in the US as reported by bankrate(dot)com.
With the average US household spending an additional $5,500 on fuel costs each year, that is $200 more than the ENTIRE amount they have in savings!?$@&
It is an alarming set of numbers and given these harsh realities, it is increasing the already high demand of people wanting to come to Mexico for the comparatively lower cost of living. On average, people spend between 30 and 50% less to live a similar quality of life here in Mexico as they do in the US or Canada.
But it's not that simple you see because even Mexico is increasing the financial solvency requirements to obtain legal residency. And of course, with market forces at play in Mexico like anywhere else, the cost of living continues to increase here. This is why I help people. I help people who are overwhelmed, confused, lonely, scared, excited and hopeful about changing their lives for the better.
That said, people should not move to Mexico purely for economic reasons. Nor should they come here because they are wanting to avoid things like vaccination, etc. To live in Mexico doesn't require that you love Mexico but you should at least like it. You would be well served to have an interest in learning about new cultures. You would be happier here to tolerate what you don't understand or choose to widen your comfort zone noticeably.
Becoming an expat is a convoluted series of decisions and choices. No doubt this will continue to put pressure on the housing market here in Mexico, both in terms of rentals and purchases, 95% of which are made by foreigners in cash. It's a lot to think about I know, but the whole purpose of writing this article is to wake you up a little bit; potentially shaking you out of whatever denial or disbelief may have a hold on you.
Clear away the cobwebs my friends. Eliminate any debts you might be carrying, not because I am trying to increase existing levels of fear but because I want you to face whatever does happen with strength and confidence. Not being beholden to anyone (employer, lien holder, or credit card company) will give you the greatest chance to live a life of freedom no matter where you find yourself. None of us can predict the markets, federal policies and so forth.
Thankfully, we can surely anticipate our own needs and the needs of our families moving forward. Do your utmost to live within your means starting now so that, should the occasion arise, you are in a favorable position to make choices you might not otherwise be fortunate enough to make.
Joyanne
