Do You Believe This Positive Spin From A Lake Chapla Realtor?

Just finished reading this excerpt of a Guadalajara Reporter article, which featured a realtor's positive comments about home sales in the Lake Chapala area.

My question is a simple one: Do you believe these glowing comments about real estate sales here, or are you skeptical about this, figuring that every realtor will always paint a rosy picture about the market?

Here's the excerpt:

Realtors boast positive trend in lakeside market

Contrary to some negative buzz on the local grapevine, leading lakeside area realtors see positive signs of stability and future growth in their business sector.

“There are a lot of unfounded urban myths floating around,” says Absolut Fenix broker Dixie Nicholson, recently instated as president of the Chapala Association of Realtors (CAR).

She finds no evidence that expat homeowners are slashing prices to unload property and move on to greener pastures or that lakeside has developed a black eye among potential buyers, despite a three-year tsunami of bad news spread worldwide concerning swine flu, the drug war and political upheaval in Mexico. In fact, she qualifies July as one of the best months for her firm this year and as good as it’s been since the market hit a low in 2009.

The lakeside real estate market took a dive in the wake of the housing bubble and financial crisis that rocked the U.S. economy in 2007-2008, Nicholson observes. “Lots of buyers were forced to cancel deals that were in progress. Some foreign residents had to bail out of the area to go back to work.”

She is confident that the market trend is now on the verge of a strong turn around. “This area has huge appeal for the one million baby boomers who are retiring every year. We’re very optimistic about the future.”

http://www.theguadalajarareporter.com/news-mainmenu-82/lake-chapala-mainmenu-84/31567-realtors-boast-positive-trend-in-lakeside-market.html

Houses are selling again in the US. Partly due to extemely low interest rates, pent-up demand, lower prices, the absorption of foreclosures.

The more houses that sell in the US means more houses will sell at Lakeside.

Lakeside seems to lag behind the US market. When housing had already tanked in the US, few Lakeside sellers got the hint to lower their prices for another year or two.

I have heard the same story from more than one realtor....this past spring showed a lot of improvement, until the crime-wave in May.

There were some sales in June, but many were veteran expats who saw the lower prices as an opportunity to trade-up; buy for the first time; or acquire rental properties.

July I've been told, saw more 'newbies' into the market and the general consensus is that sales will build as long as things remain tranquil.

Some realtors think this winter season could see a spurt in sales and even some price increases (which is also happening in some US markets currently).

MexicoJimbo wrote:

“There are a lot of unfounded urban myths floating around,” says Absolut Fenix broker Dixie Nicholson, recently instated as president of the Chapala Association of Realtors (CAR).

Urban myths??What like the "chupacabra"?
Sounds like a fluff piece to me.

It is always a good time to buy a home, ask any real estate agent!

Of all the real estate people lakeside Dixie is one of the few I would pay attention to. Assuredly a fluff piece but Dixie has creds and I doubt she would besmirch her reputation by blowing smoke. We'll see.

RoofBob wrote:Of all the real estate people lakeside Dixie is one of the few I would pay attention to. Assuredly a fluff piece but Dixie has creds and I doubt she would besmirch her reputation by blowing smoke. We'll see.

I have a friend from Dixie's office who told me the same thing a week ago. Sales are perking up.....but more so in the lower price brackets. That's normal: "It is easier to find 500 people with a dollar than to find 1 person with 500 dollars" isn't just folk wisdom. Most people going to a realtor will start out stating their spending limit and go from there. Maybe the agent can bump them up a bit......but not 50 or 100K.

Baby Boomers are Retiring.... those who never got swallowed up by the Crunch will shop again as they gain confidence the worst is over...

hockables wrote:Baby Boomers are Retiring.... those who never got swallowed up by the Crunch will shop again as they gain confidence the worst is over...

Unfortunately, a lot of Boomers have very little dough set aside for their basic expenses once they retire, so shopping sprees or buying a house are not options.

Check this out:

A Shocking Number Of Americans Rely Entirely On Social Security By The End Of Their Life

A shocking 46.1 percent of Americans die with less than $10,000 to their names and rely on Social Security benefits to pay the bills, according to a recent study by James Poterba at MIT, Steven Venti at Dartmouth and David Wise at Harvard.

Many of these people don't even own a home according to the study, which looked at the wealth of people of all ages from 1993 until 2008.

These statistics are alarming because elderly people often have among the highest medical expenses and are ill-equipped to pay bills.....

Read more: http://www.businessinsider.com/46-percent-run-out-of-retirement-savings-2012-8#ixzz23vzRC3Yz

As the post immediately above notes, the financial picture for a lot of retiring American Boomers is not a rosy one. And the chances that many of them will be in the market for a house in Lake Chapala are remote.

Just how grim is the situation?

Check this out:

17 Scary Charts About America's Coming Retirement Crisis

The Great Recession has rattled retirement plans for just about every consumer in the country, regardless of age.

Stymied by a lack of knowledge, depleted savings and the increasing likelihood they'll work through their golden years, Americans have a long road ahead of them......

Read more: http://www.businessinsider.com/american-retirement-crisis-2012-5?op=1#ixzz23w4D1HER

10,000 baby boomers in the U.S alone will turn 65 everyday until 2030. Those numbers are so massive I would think even the smallest percent migrating lakeside would affect rental and home sales.

http://pewresearch.org/databank/dailynumber/?NumberID=1150

RoofBob wrote:10,000 baby boomers in the U.S alone will turn 65 everyday until 2030. Those numbers are so massive I would think even the smallest percent migrating lakeside would affect rental and home sales.

http://pewresearch.org/databank/dailynumber/?NumberID=1150

Exactly....

Many adventurous lower/middle income earners will make their way South as well....

Sweatbirds & Snowbirds

The Baby Boomer Generation has been the single largest driving force in the economy for 40 years....
cept for Bernie Madoff

Whether or not they have money to buy real estate will be the actual question.

In a conversation last month with a real estate broker I respect and trust, I asked how the market was. He said it was not too bad. I inquired whether it was gringo or Mexican sales. He replied that a lot were Mexican as there was purported to be easier mortgage money available and that is why the uptick. Shortly thereafter, I was paying my rent at a local Real Estate Agency office and noticed on the white board, being used in a meeting that was going on, they had a number of houses listed with Selling Price and New Price Reduction.
I have not seen many new houses hitting the MLS. I haven't seen a ton of price reductions, and I still see the same old houses for sale month after month.
I think it is in a wait and see mode, but then again, who knows?

Lots of 401K's are nearly whole again. I met many people over the past 2 to 3 years visiting the area who said they'd made up their mind to move here and buy, but were waiting for their 401Ks to recover and to sell their US house.

DJIA low in 2009, post crash: 6,547
DJIA close this week: 13,275

Yeah, it probably isn't the 401K's so much as it is the real estate market up north. It is still hard to sell up there and the prices are down, so there are many that have to wait that out. The bubble will work its way through and the impact will be felt here, but I think it won't happen with in the next 12 to 18 months.
A lot hinges on this next election, and there are a lot of things still up in the air that could bring the stock market back down in a hurry. Bush Tax cuts (which way does that go), who wins the election, what happens in Europe, does the EU hang together or dissolve, increasing the US debt limit, etc.
Lot of uncertainty out there.

I could not agree with you more on this Bob.
The number of people likely to show up on Lakeside over the next few years should stabilize the local market and then some. The baby boomers are just starting to reach retirement age now and the crest of that wave is still ahead of us. Just at 1% of the anticipated 10,000 people retiring every day in the US alone we are talking 100 people a day looking for a retirement haven. If you think that is happening around the globe, not just the US, the numbers start to look huge, and as you say even a small percentage of that is a big influence.

Since Mexico offers warm weather, is close to the US and Canada, offers housing familiar to what North Americans are use to for less money, and is known to have a cheap cost of living, it will be considered first on many peoples lists of potential retirement destinations. I see this as a great opportunity for Mexico's economy. I think Mexico's tourist industry is a shining example of how successful an industry can be here, and if that same effort was to be put into creating a viable retirement destination, the baby boomers would flock here, as they now do as tourists.
The bad press Mexico receives (whether designed to do this or not) is the biggest threat to this happening, we all need to let those that will listen know that things are good here in lakeside and the press is just sensationalizing the incidents they can.

otrocanuck wrote:I could not agree with you more on this Bob. The bad press Mexico receives (whether designed to do this or not) is the biggest threat to this happening, we all need to let those that will listen know that things are good here in lakeside and the press is just sensationalizing the incidents they can.

Agree 100% on the numbers, Bob & I have chatted and we're all in agreement that even the smallest of fractions of a percentage will make a huge difference. But here are some numbers:
315,000,000 US Population
5,200,000 US Expats scattered around the world
1,000,000 US Expats in Mexico
10,000 US Expats Lakeside (ballpark'd to the high side) That is .0032% of US Population
Apply that same percentage against 3,650,000 people hitting retirement age and you come up with 120 people.
Simply extrapolating to show some perspective on the numbers.
Numbers are a funny thing and no one knows anything, it is pure conjecture, but I think Bob & Otra are correct that over time there will be a whole lot of boomers looking South. But, it will only happen if the violence in Mexico subsides. Old people (retirees) have a tendency to be more security conscious and will be heavily influenced by their families, therefore my guess is that if the violence level decreases you will see more activity over the next decade. But it won't be immediate, it will take time.
And I totally agree with you that this spells great economic news for Mexico, and I have to believe the new President understands the economic potential.

That "one million gringos in Mexico" number has been circulating and debated for years on Mexico message boards. I think the general consensus is that it is incorrect.

If the Lake area has 10,000 American residents and it is the largest American community in Mexico, that leaves 990,000 residing in the rest of the country. I really doubt that.

May be the majority of the Americans are binationals and a lot of them live in the border states. Otherwise there is no way you have 990 000 Americans living in Mexico.

seisdedos wrote:That "one million gringos in Mexico" number has been circulating and debated for years on Mexico message boards. I think the general consensus is that it is incorrect.

If the Lake area has 10,000 American residents and it is the largest American community in Mexico, that leaves 990,000 residing in the rest of the country. I really doubt that.

I found a link the other day that had US Expats by country and Mexico was the leader with 738,010 as of a survey done in 2010. Then I was looking around today and found a Reuters article that made a statement referring to 1,000,000 up by 25% from 2010. Whether it is 700K or a million, it is a big number and the number residing Lakeside is a very small number. When the flood gates open, of retirees looking to move Lakeside, it will not be as overwhelming as one might think when dealing with large numbers.

Interesting point Juan. So where are these people? Do they know something we don't because if there is somewhere (all things considered) nicer to live in Mexico we would like to know about it. Anyone?

RoofBob wrote:Interesting point Juan. So where are these people? Do they know something we don't because if there is somewhere (all things considered) nicer to live in Mexico we would like to know about it. Anyone?

Well, the numbers DID get me to thinking about that same thing. And then I realized that expat does not simply define retiree living abroad. There are a lot of expats that are in a different country for work purposes. So, that makes me think there would be a lot of them in Mexico City, Monterey, up by the maquiladora / border cities, etc.. Probably a bunch of on the Yucatan too. But that's as far as I got.

Back in the spring, the MX government put out a story that FM2/FM3 numbers were 1,000,000. I think that is all nationalities.

Most mornings, I eat breakfast with 3 Americans, a Fin, a German, a Philipino and an Englishman. There's another large table which has a Canadian and 8-9 Americans.

Of the 1MM, maybe 60-75% are Americans.

Watching the world situation, I think another recession is building. That may cause more people to look for a cheaper living area or may make it more difficult to move, take your choice.

MX is doing pretty well with a growth rate of over 4% compared to the US of under 2%. My guess would be that there will be more MX buyers here than US buyers.

The US housing market has another 5-7 years before it is going to balance out. There's still 5MM+ homes in foreclosure to be sold. Some locations are beginning to recover but the sand states (CA,NV,AZ,GA, FL) are going to take a decade or more to recover.

And let's not forget about the Canadians - the real estate market in Canada is still strong = many Canadians looking into this area now that prices here are lower! I for one believe that the next 5 years will see a positive trend here along with higher prices! We think so............just bought a second property that we'll use as rental until the market peaks again!

Guiness wrote:... I for one believe that the next 5 years will see a positive trend here along with higher prices! We think so............just bought a second property that we'll use as rental until the market peaks again!

Great idea, Guiness, remember, buy low, sell high! <g>

Merry