El Anclote vs Hotel des Artistes

There’s been an ongoing feud between the HOA of the El Anclote Condominiums in Punta de Mita and the developers of Hotel des Artistes, a new hotel and home to the restaurant Cafes des Artistes del Mar, built on the beach at El Anclote. 

In short, El Anclote owners, or “some” El Anclote owners, say that the developers have built too high. However, there is no high restriction on this beach. There is only a 3-floor restriction, but nothing about how high the three floors can be. So the developer, to get in another level, built down and put in a partial basement. This is called a “sotano” and sotano’s are not taken into consideration when calculating how big a building can be. The developer found a “loophole”. According to their building permits, what they have built is within the existing code.

But some of the owners at El Anclote, or at least the majority, don’t buy that. They think the law has been broken and are challenging it any way they can. Its been a circus. After hundreds of thousands of dollars spent on lawyer fees to try and stop the construction, El Anclote has not been successful in stopping any part of the building process. Today, it is a beautiful looking building with a wonderful Thierry Blouet restaurant and bar, gym and partial spa, hotel rooms and a roof-deck pool/lounge/bar. And they have the building permits to show that it was done legally. If you haven’t tried the restaurant, you should. Cafes des Artistes on the beach. Better yet, make it a weekend and spend the night at the hotel.

FADESA in Receivership

It was just a year ago that FONATUR had an auction for the development lots that would be available at the Litibú development. One of the primary purchasers of land at this auction was FADESA, a very large Spanish real estate development company. Well, things aren’t going very well for FADESA lately.

(AGI) – Madrid, 16 July – Spanish banks are taking measures following the crisis which hit the property company Martinsa-Fadesa, which requested receivership on Monday evening. The Spanish bank Caixa Galicia announced that it was earmarking 78 million euro to cover the losses and the decision follows that of Caja Madrid which has earmarked 250 million euro and that of Caixa, shareholder of Abertis and Telefonica, who instead earmarked 192 million in the accounts in the first six-month period. Martinsa-Fadesa, which is one of the most important property groups in the country, was severely hit by the sub prime crisis and has to face debts of 5.2 billion euro.

What will this mean to the land that FADESA has spoken for in Litibú? A good question. What is good is that they never broke ground. There are not projects there that they have begun and could have left partially built. Not good news for the development of Litibú or those that did decide to break ground. It will be interesting to see where FONATUR goes next with this one.

“La Pechuga”

For those that have been around Puerto Vallarta for some time, they are probably familiar with the land above downtown Puerto Vallarta that has been known as “La Pechuga”. This would be the land in between the tunnel of the libramiento (above it) and downtown Vallarta.

There are have been a number of developers that have tried to put a deal together on this land, but something, usually landownership disputes, have held them back. Well the development group Grupo Real del Mar have straightened out the problems and will be going ahead with a development later on this year. An announcement as to what exactly they have planned will be coming out shortly. Its a great piece of real estate and its good to see a developer bullish about the market! This company has been very successful in real estate development and I’m sure they will be here as well. This isn’t the only project they will announce this year, there is one more, but I can’t let the cat out of the bay quite yet! But it involves another very important and well-known piece of land near Vallarta.

Trends 2008 Addition

This isn’t part of the article that was just posted, but this is a trend that has become increasingly more apparent since the article was written.

Some Developers Holding Off Building or Scaling Down

Although it is difficult to establish to what degree at this time, it is becoming apparent that some developers are either putting their project(s) on hold, or releasing in phases, because of the slowdown in the market. In 2007 there were 50 new real estate developments that were announced. Some of these projects didn’t actually break ground, but “tested the waters” by making an announcement and then taking preliminary orders or initial deposits of small amounts. Some of these developments that have not seen the response they were hoping for, can still hold off building or even cancel the project(s). Others have decided to re-evaluate the timeframe for the project, putting it out over a longer period of time, and/or releasing in phases. At the end of 2008 we will be contacting developments to find out exactly what each project decided upon and what their plans are for 2009.

This can be seen as good news, as most likely the inventory for new real estate product is not as large as once estimated.

Real Estate Trends 2008

Here’s a preview of our real estate trends article that will be featured in Vallarta Lifestyles and the Real Estate Guide for August:

 

We’ve been writing these articles for the past five years – five exceptional years, where the real estate market experienced rapid growth, appreciation and demand. In last year’s article, We reported that a downturn seemed to be approaching. Today, while updating and writing this report, there is no doubt that the market has slowed and the USA is most likely in recession. 

Is there good news out there? I believe so. We feel that this is just a minor market downturn for Vallarta, a switch from being a seller’s to a buyer’s market, and will be only temporary. Vallarta is fundamentally a strong market with a lot to offer second-home buyers. Although it’s been somewhat of a roller coaster up to this time, a slowdown can be a welcome trend, allowing infrastructure to catch up with private growth, although most developers would beg to differ!

The type of news we really need…

This was recently published in the International Herald Tribune, which was a condensed version of what had appeared early in the Washington Post:

In Mexico, government claims tourist projects were built illegally

Maybe this sounds familiar: Government officials declare that several tourist-oriented developments were illegally built on protected land and threaten to demolish them.

The latest headline from Spain? Not this time. This report comes out of Mexico where soldiers recently moved to shut down five small hotels near the Mayan ruins of Tulum, on the so-called Riviera Maya south of Cancun.

Government officials say the hotel properties were built without permits on reserved federal land, according to an Associated Press report.

As noted in the story, title disputes in the Tulum area are not new. The stretch of coast south of the ruins is still something of a hippie retreat, with nude beaches and cheap cabanas for rent, far removed from the row of high-priced beach resorts closer to Cancun. Much of the land in the area is controlled by ejidos, collectives of landowners, which often makes it difficult to determine the actual owners.

However, in this case, the dispute is reportedly about the use of federal park land, not the legitimacy of the titles, the reports say. Nevertheless, the headlines are still bad news for the international real estate business in Mexico, which has long struggled with its image. Most of the horror stories of gringos losing their homes are more than 20 years old—and these days it’s possible to get title insurance and a mortgage on many Mexican properties— but the images linger. (Read more about buying in Mexico here.)

If the Tulum clash continues, it is sure to revive doubts about the trustworthiness of the country’s systems at a time when Mexico is making headlines for a brutal drug war and civil unrest in the south.

Yeah, great timing. Just when it seemed that the questions regarding how the trust system works (Fideicomisos) and how secure it is had become less relevant and moved to the back burner, looks like its being moved to the front burner again. These people bought property without title, without permits in a national park. What do you expect? And for those considering buying ejido, you are playing the same game these people were playing. Its a roll of the dice. You may win, but can you afford to lose?

Travel Trends and Luggage Sales

This is an interesting analogy, using the sales of luggage to get an idea how the travel industry may be doing:

Chart courtesy of David Rosenberg of  Merrill Lynch:

“We track luggage sales as a barometer of travel plans – and they have fallen in two of the past three months and are running at a near-record 35% annual rate over the past six months. Either people intend to stay close to home (which requires a ‘cocooning’ theme) or those who do intend to travel are scaling back their suitcase purchases in response to the advent of these airline per-bag fees.”

MLV Inventory for Re-sale Properties

Here is the results for the MLS inventory up to the end of June, 2008. Inventory levels have remained level since December, which would seem to be a good sign. Traditionally, however, it drops during the summer months so we may see an increase in the fall.

MLV Inventory 06/08