mexican lottery results

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Herd mentality that applies to real estate in Puerto Vallarta, Mexico

By: Jim Scherrer

With winter weather very well, proximity to the U.S. and Canada, and the services offered, Puerto Vallarta, Mexico has been recognized as a tourist destination, besides being a retreat for the Americans.

Beginning in the early 21st century, Vallarta, like many other tourist destinations, there began a period of explosive growth. Developers from all over the world came to Vallarta to take the baby boomer retirement plans. In a short period of time, most of the front and the best beach properties side snatched and planning began in earnest. Tower cranes were built, which give the whole city skyline and construction workers from neighboring states rushed to the area for employment.

As soon as the above projects were announced, the developers raised the sales offices beautiful and ready for the mouth of the earth. These nice, spacious offices, with air conditioning typically have areas comfortable lounge with new furniture, very magazines Sometimes music and maybe a free margaritas. They had generally speak English, well dressed, experienced, professional sales staff. Most of these new office cubicles had multiple sales with the bargaining power of two or three contracts at once, and some even had counters where shoppers can get in line to wait their turn to this unique opportunity to own a piece of paradise. Of course, it never quite reached the point where it did in Florida, where held lotteries and drawing numbers from a hat lucky buyers!

During the early years of the decade, the Americans were grabbing the new condominiums at a pace so torrid that many construction projects were 30% or more, sold out before they even broke ground. fixation of pre-construction prices 10-20% off suggested list price is often offered to owners of condominiums previously built by the developer. After all, these privileged speculators had earned the right to have the first opportunity to gather the most desirable condominiums in what appeared to be price reasonable, few could afford to pass up an investment opportunity so simple!

Meanwhile, as tower cranes began to turn about and thousands of construction workers, like a huge ant colony, began construction, the beautiful buildings began to come to reality. The money was flying in all directions and it seemed that everyone who came to the city had an additional half a million dollars to spare for your home retirement dream. Of course, during those years, refinancing and second mortgages on real true North American values was a very inflated common, the herd had a feeling of easy money and wealth without end!

With the herd of buyers somewhat naive of the city, the question is not whether or not to buy a condo, condominium was that they should buy. They were almost knocking every door real estate office in the city (about 80 in the area in its heyday!) and was definitely a seller's market. Developers typically negotiate a 5-10% off list price to give the buyer a sense of satisfaction that they had received a good deal, still leaving the developer with a substantial profit margin, everybody was happy as the good times roll on!

By the mid of the decade, the local real estate market was humming on all cylinders and new projects being announced almost daily. The Tourism Board of Mexico announced its plans to develop a new 20 miles of beaches north of Vallarta and planning was underway for another 20,000 new condominiums. Obviously, if and when the stampede continued, they will continue the construction and prices continue to climb, resulting in a tripling of real estate values during a short period of time 7 years, ie, the old rule of supply and demand was in full force, continue to arrive and we'll keep building!

Well, as always, a global recession hit in 2008. However, this time it was much deeper than most had ever known, seriously affecting the PV real estate market as demand disappeared almost overnight. The developers and speculators were left with thousands of unsold new condos create the largest buyer market has experienced in this part of the world, ie the supply (excess) of new condos now exceeds demand. Consequently, developers and speculators are on their knees just trying to recoup their costs, often a discount of 30% or more while many of these offices real luxury goods in PV were forced to close and open the other they do on shoestring budgets and limited staff.

The mentality the herd has been clearly demonstrated on a daily basis for a number of years throughout the Vallarta area and is still in play, except that now buyers following are all each other in the opposite direction, postponing purchases until one day in the future when the economy is more secure, ie to the coast is clear. The masses seem to have a sense of urgency to buy when their peers are doing and feel no sense of urgency to buy when prices are at the lowest possible levels. Over the past year has been absolutely amazing to see the flock of what appear to be intelligent, educated buyers walk once in a time opportunities in life because there is no queue of buyers. It is as if afraid of everyone to be contrary, therefore, will end up buying later at a lower price high.

Buy at a given real estate market is essentially the same as buying in the stock market. Why the herd always insist on the purchase and sale high-low? Developers are not going to sell below cost and current prices are as low as I'll ever be, business opportunities are everywhere, but once are recognized and recorded by the smart buyers, prices probably will start escalating again.

We thank our lucky stars that have bought a villa in Puerto Vallarta for twelve years (Before it was the in thing to do) and have seen more than tripled in value. Of course, anyone buying now at these prices with severe depression can get a short term gain of 50% (or more) of your investment, if the economy ever recover. However, knowing how the herd mentality reacts, most buyers probably will not return to the table until it is too late to take advantage of the current situation with tremendous real estate values.

Maverick Is there? Are there retired or about-to-be retirees who have some money (or credit) to the left? If so, you will never find a better time to take advantage of a severely depressed housing market and oversized. Pack your bags and come on down for a week of fun in the sun this winter and check out the great opportunities that await you in Puerto Vallarta. With the current availability of mortgages in Mexico this is a rare opportunity to buy cheap and maybe someday in the future, sell high is a great concept! Ignore what the herd is doing and remember one, but they are usually wrong!

(Please see Puerto Vallarta PHOTO GALLERY )

About the Author

Jim Scherrer has owned property in Puerto Vallarta, Mexico for 26 years and resided there for the past twelve years. The mission of his series of 70 articles pertaining to retirement in Puerto Vallarta is to reveal the recent changes that have occurred in Vallarta while dispelling the misconceptions about living conditions in Mexico. For the full series of articles regarding travel to and retirement in Vallarta as well as pertinent Puerto Vallarta links, please visit us at PVREBA.

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