Wednesday, February 13, 2008

The Baja Real Estate Buyers Market

It's a Real Estate Buyers Market in Baja California Mexico

by J.P. Money

Well, for years, it was a sellers market and to some stubborn owners, they still think it's a sellers market. But I think the reality has finally set in and even most real estate sales people agree that Baja is now a buyers market.

In fact, the buyers have dried up due to the loss of the buyers from California. Now, I have heard some developers here are going after the upscale Mexican buyers but Baja is not that big of a pool and upscale Mexicans would rather buy in places like Puerto Vallarta, San Miguel de Allende, the Riviera Maya and Cabo San Lucas, not Baja, which by comparison does NOT share the upscale classiness of those markets.

No Baja is a more of a bedroom community for middle class Calfornians who seek beach properties they can afford. But those buyers are not here now. They are in hiding crushed by mortgages that over encumber their worthless homes and investments. This could take a while.

Meanwhile, on the sellers side, the gringo sellers are most used to liquadating properties and taking losses just to move inventory so that they can get back in the game. However, the Mexican seller is a different animal. He is market stubborn and will sit on his property for 10 years empty if he has to just to "ride it out". Most Mexican owners are unencumbered by mortgage debt so they can hold on for years. More, the cost of money is not in their lexicon of financial management so property becomes more like a sense of pride instead of an instrument of money and investment. Therefore, the buyers market does exist but it, in general it may depend on with whom your buying from.

Truly, what I have described above is cultural difference based on years of economic reality.

Will the Mexican seller drop price just make the deal? Yeah, sometimes. Heck the American seller is dropping the price as soon as you say hello! But many times, the Mexican seller will simply just sit on it till he gets his price. You can see this by all the vacant properties just sitting there collecting sand and no movement.

But sooner or later, the economics do force the invisible hand and with this giant hand slapping hard down on the faces of the real estate market, well, let's just say the buyer is now in charge. And that's just the way it is in the 2008 Baja Real Estate Market.

So make offers to motivated sellers and get your terms! It's Buying Season in Baja!

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