Rio Amapas announces Ecological Furniture Package

In collaboration with Carlos Alberto Style Lab from Los Angeles, homeowners at Rio Amapas will preview an exciting ecological turnkey furnishings package that is exclusive to residents. Designed in harmony with this unique tropical paradise, the Rio Amapas Collection boasts many environmentally-friendly features high thread count organic hemp upholstery, limited edition halogen lighting, hand-crafted accessories from reclaimed driftwood and bamboo luxury linens sourced from one of the world’s best bedding manufacturers.

The collaboration between Rio Amapas developer Claudio Javelly and interior designer Carlos Alberto Gutierrez runs as deep at the property’s protected rainforest ravine. The lifelong friends traveled internationally as teenagers and vowed to introduce a new design perspective in their native Vallarta.

Conceived by Javelly as an environmentally responsible resort, Rio Amapas is an elite community of 20 residences situated in a tropical hillside paradise just south of the Zona Romantica. The forward-focused ecological development balances town and jungle with luxurious on-property amenities, responsible living and the security of ultimate privacy.

“I am pleased to collaborate with Carlos on this project because of his deep understanding of low-impact luxury,” commented Javelly. The interior design firm’s CRATE by CA turnkey furnishings program is already widely available throughout resort markets in Puerto Vallarta and is featured at LEED certified EVO South in Los Angeles.

Rio Amapas was designed by renown architect Manuel Vizcaino. The quality and distinction built into each home is truly impressive, blending the best of natural materials with the elegance of contemporary architecture. Homes are minimally invasive, sitting above ground on pylons and are naturally ventilated by the site’s extraordinary cross breezes.

Carlos Alberto Style Lab creates furnishings solutions that provide ultimate one-stop convenience in interior design. Customizable packages include high quality branded furniture, artful accessories, bed and bath luxuries and tabletop essentials. 

Homes cuts back development

Homex, who traditionally have developed low-income housing, decided a couple of years ago to get into the lucrative luxury market with a program to have developments throughout Mexico. Their project in Vallarta, located in Costa Banderas on the North Shore, is called Villas de Mexico and will eventually have 1,000 units. However, it looks like they are cutting back, although they will continue with the Puerto Vallarta development:

Mexican homebuilder Homex will pull out from the high-end residential market and reduce land acquisitions through the end of 2009, focusing on cheap houses to better weather the financial crisis.

In a move to save money and allocate resources to the most profitable market segment — cheap homes selling for under $50,000 — Homex HOMEX.MX HXM.N will put off further projects in the luxury market, although it will continue with its developments in the beach destinations of Los Cabos, Puerto Vallarta and Cancun.

“We have a land bank close to five years of future sales,” Chief Executive Gerardo de Nicolas said during a conference call with analysts. “Due to the actual macro conditions … that’s why we are significantly reducing our land acquisition for the next five quarters.”

De Nicolas said smaller competitors were starting to suffer from liquidity problems as bank and government-funded mortgages dry up.

“This is a unique opportunity for us to gain market share … and consolidate business in the cities where we already have a presence,” de Nicolas said. “The Mexican housing market is already witnessing some signs of deceleration.”

MLS Inventory Increases

The Vallarta MLS inventory jumped substantially in October with 117 new listings giving a total of 962 listings on the re-sale market. If we look back (see graph below), however, we can see that we usually do see a jump in October each year, followed by increased in November, December and January before leveling out. The overall trend is upwards however. Is this just because of the increase in the size of our market place or are we reaching an oversupply point? As reported earlier, compared to last year sales are only slightly off YTD. But this is just for the re-sale market, which seems to be fairing better than the new product market of the developers.

mlv-inventory-totalsxls

Comparing 2008 Banking crisis to Mexico’s 1994 Crisis

Although the two were created out of different circumstances, the end result seriously effected the banking and financial industries of both countries. For Mexico, 1994 was a complete financial meltdown. The peso de-valued, many of the banks needed to be bailed out, and credit dried up, literally for years. In 2008, for the USA, the dollar has so far remained strong, but the banking industry is suffering and the availability of credit has become very tight. Hopefully it will not effect the country like it did Mexico, in that credit availability from banks did not appear again for nearly a decade.

But two good things came out of this. One is that businesses and households learned to function without credit, which isn’t such a bad thing. When people ask me while so many homes in Mexico are partially finished, with rebarb sticking out of the top floor and the roof unfinished, I tell them that’s what happens when there’s no credit. People build when money is available. However, the end result is they have a home that is completely paid for. It may not be anything fancy, but its 100% theirs. Most households in Mexico do not carry a lot of debt. As a small business owner, I learned to function without credit. If you wanted to start any major endeavor, you first had to have the funds to do so or do it carefully through cash flow. And, since they were your funds, you tend to be more careful with how they were spent. As with Mexican households, most Mexican small businesses also carry little debt. These are positive aspects of what its like living without the availability of credit. Perhaps the USA needs to go through a similar adjustment – less credit and more savings.

Mexico was fortunate enough to have the USA, especially with the assistance of Bill Clinton, to obtain the funds they needed to get them through their 1994 crisis. Clinton lent Mexico $50 billion dollars, of which Mexico paid back in full and ahead of their payment schedule. Mexico was probably also fortunate that the person who became president in late 1994, Ernesto Zedillo, had his doctorate in economics. His policies, or those put into place for the banking industry to ensure this type of crisis would not happen again, have given Mexico some of the strongest bank regulations in the world, and Mexico has managed to avoid what is currently financially ailing many other countries. Perhaps Mr. Zedillo would be available to provide expertise to the next American president!

Another interesting aspect is that these “crisis” are not as big of a deal in Mexico, as Mexicans have lived with these “crisis” for years. For Mexico, they are timely, they take place every six years when a new president takes power. Most Mexicans have grown up just expecting these type of situations!

Magnetic South – ULI Article

This article was recently posted in the September issue of Urban Land:

The region known as Latin America and the Caribbean (LAC), as defined by the World Bank, consists of 41 countries. One of LAC’s greatest assets is the bountiful real estate that is available for destination resort or retirement development. In many of the countries, particularly those closest to the United States with established air transport corridors, tourism has become one of the most dominant industries. This factor, combined with trends in the U.S. tourism and resort investment, has made the region a magnet for new real estate activity.

The September 11, 2001, attacks on the United States led to important changes in American’s travel habits and boosted the value of resort and retirement development in the LAC region. As outbound U.S. travel gradually recovered, it became clear that U.S. vacationers preferred to stay closer to home. Trips became shorter, more frequent, and focused on destinations within driving distance or limited to a relatively short, non-stop flight. Furthermore, a broad range of U.S. travelers developed a preference for resort locations offering many leisure experiences within a secure community environment. Because these vacationers where spending less on travel and returning more often to resorts closer to the United States, there were willing to invest in those communities.

US Real Estate Price Drops

With markets such as Arizona, Las Vegas, Miami and parts of Florida, plus parts of Southern California, now experiencing drops of 35% off their highs, the competition for Puerto Vallarta isn’t going to be Cabo, Cancun Hawaii or Panama going forward, its going to be the places mentioned above.

Arizona has been a traditional destination location for west coast Canadians for years and Florida has been the place for east coast Canadians, so although we have been enjoying a resurgence in Canadian buyers in Vallarta we may start losing them to the great deals that will be coming on the market in their once traditional markets. Its great living on the ocean in PV, but the prices just may be too good to turn down in Arizona. They went through this before with the Savings & Loans crisis and many Canadians ended up with homes and very good prices as a result. Will we see the same thing happen this time around? I guess it depends on just how far these markets drop.

For Americans, these are properties that are right in their backyard. Even if they are not interested in a second home in these areas, they may attractive as investment properties. And with the number of foreclosure properties increasing, this becomes even more attractive for investors.