Alamar shows strong sales…

But they are selling to Canadians and Mexicans, with very few Americans. At the recent Vallarta Lifestyles real estate conference Claudio Leone announced that they have been having very good success with their new project Alamar, with pricing starting as low as $250,000 for two bedroom condominiums. Of these 60, half were to Mexican buyers, 25 to Canadian and only five to Americans. Yes, we are fortunate to have a diversified market! Grupo Real del Mar, developers of Alamar, did their homework and identified that there was a demand for product in this price range. And they are probably selling as well or better than any developer around the bay at this time.

Mexican Banks fairing better than US Banks

This was recently featured in The Economist:

AFTER the 1994 peso crash, the risk of Mexico’s difficulties spilling over into America was considered so great that the Clinton administration helped bail out its southern neighbour. In the first quarter of 2008, the boot was on the other foot, though the scale was entirely different. Now it was the turn of Banamex, one of Mexico’s two largest banks, to help out Citigroup, its crisis-stricken parent. Banamex provided $453m of the $1.1 billion Citi earned in net income from its overseas operations between January and March (Citi lost $5.1 billion overall). You could almost hear Vikram Pandit, Citi’s new chief, mutter “Gracias, compadre.”

Yet Banamex was not even the best-performing of the Mexican banks. Of Mexico’s five largest financial institutions (which control three-quarters of the market and also include Bancomer, Santander, HSBC and Banorte), it was the only one that did not show a big rise in year-on-year profits in the first quarter. The performance of the banks was impressive for two reasons. Firstly, Mexico has one of the most open banking systems in the world; two of its top five banks are Spanish-owned, one is American, one British, and only one is Mexican. Yet the crisis in global banking has barely ruffled it. Also, Mexico’s economy is usually more exposed than almost any other to a slowdown in America. As Alejandro Valenzuela, boss of Banorte, delicately puts it: “Decoupling is the wrong word, but there is now a certain shield.”

That shield, however brittle, has been forged both from financial reform in recent years and from macroeconomic stability. On the financial front, lending has ballooned. According to the central bank, credit to the private sector has nearly tripled since 2001, while consumer credit has increased by around seven times. The banks have also feathered their nests with relatively high consumer-banking fees.

Meanwhile, the market has grown more sophisticated, thanks to some shrewd moves by regulators. Chief among these, according to an IMF working paper released this week, were reforms to bank-secrecy laws which allowed the creation of a successful credit-reporting system, as well as reforms to bankruptcy laws. These have given birth to a thriving mortgage-backed securities industry. If that sets off alarm bells, Alejandro Werner, the deputy finance minister, notes that over the past seven years, the accumulated increase in house prices in Mexico has been less than inflation: there is no bubble yet.

There are also economic reforms to thank. Marcos Martínez, the head of Santander in Mexico, says that infrastructure investment as well as a huge public-sector mortgage programme have boosted demand. It helps that Mexican GDP closely correlates with America’s industrial production, rather than its overall economy. The brunt of the slowdown in America has been borne by the services sector.

Although Mexican economic growth is likely to remain sluggish, at something under 3%, the health of the banking industry is a salutary sign. For once, Mexicans can look northward with a sense of sympathy rather than envy.

The bottom line for Mexican banks may be better, but for anyone that still has to deal with one of them, it can be a bad experience. Customer service has still not caught on down here for many of the banks.

Homes for less than $10,000 USD?

This was published in the Atlanta Journal:

For less than the price of a decent used car, you can buy a home in Atlanta today. Actually, real estate agents list a dozen choices for $10,000 or less. The prices seem absurd but they are part of a real estate market suffering with rampant foreclosures, mortgage fraud, abandoned investor properties, a collapsing mortgage industry and other ills. The market is unlike anything seen in metro Atlanta in years and it has local tax assessors and appraisers as confused as anyone.

Talk about going from a hot to freezing cold market is a very short period of time…

Spain’s Real Estate market…

There’s an amazing article in the UK Daily Mail about the real estate market in Spain. Very interesting reading. 

And yet by the end of this year, there will be an estimated one million unsold properties on the Spanish market. Another two million lie empty. Add to that the global credit crunch and mounting Spanish interest rates, and as one real estate agent put it this week: “It’s like the UK situation on steroids.”

Thankfully we are no where near having problems like this. Here’s another:

Tumbling property prices, a glut of new properties still flooding onto the market and rising Spanish interest rates are taking their toll. Added to this, illegal building practices mean that 100,000 coastal homes are now under threat of demolition. And to make matters even worse, the pound has fallen almost 12 per cent against the euro over the last year, leaving many British residents even further out of pocket.

Real Estate Conference

This past Wednesday the Third Annual Vallarta Lifestyles Real Estate Conference was held, and it really was an extraordinary event, especially with regards to the panelist sessions. I was the moderator for these sessions, and was fortunate to have some of Vallarta’s most experienced and knowledgeable realtors and developers participate in these session discussions. 

Powerpoint presentations from the speakers will be available at www.mlsvallarta.com tomorrow and we are working on putting together videos of the session discussions. These are definitely worth watching. When I get a chance, I’ll write more about this, but for now I really need a break; it was a lot of work to put this conference on and I want a little time off. But if you attended, I’d love to hear your comments on how you thought it went.