New Vallarta Real Estate Blog

February 23, 2016

For those who are or were once signed up to my real estate blog, after a five-year hiatus I am blogging again and you’ll find me at: You can sign up to receive regular posted blogs as well. This wordpress blog will no longer be used.

John Youden

Taking a Sabbatical…

November 16, 2011

Those who visit this blog regularly will have noticed that I have not posted anything since mid’ September. My schedule has made posting and gathering information regarding the local real estate market difficult and it will remain this way over the next year of so.

From the conversations I have had with realtors and developers, the market has seemed to have bottomed out with a number of realtors experiencing good activity. The activity however, is with real estate that has been substantially reduced in price from its highs. But at least there is activity, good activity, something they haven’t seen over the last few years, which should help create a firm bottom for this cycle.

Unfortunately it is not the same for developers, many of whom face a situation where re-sale properties are selling for less than what they can build for. The developers who are selling are those that have entered into the market with new product involving smaller sized units with less amenities, so they can be competitive. We are even seeing the return of the one-bedroom condo, something the market hadn’t provided for some time.

Prices are down as much as 40%, back to what they were in 2003, before the market really took an upswing and real estate activity tripled in one year, as reported by the local MLS.

So it is definitely a buyer’s market. If you have been considering buying property in the region, its a good time to be looking.

That’s it for now, hope to be back soon.

John Youden

Homicide Rates in other countries

September 15, 2011

My friend Charlie sent me these stats that he collected from Wikipedia. These are the annual homicide rates per 100,000 population for a few countries. What I found intriguing is how high Jamaica, another favorite vacation spot, is compared to Mexico; four times as high. When was the last time we saw anything in the news about Jamaica’s high homicide rate? I guess the homicide is more sensational in Mexico. A lot of Mexico’s homicide is drug related and that which is drug related is the cartel fighting against themselves or the police/army. The numbers involving Americans or Canadians, unless they were involved with the drug business, is virtually nothing. But from listening to mainstream media you’d think we were getting knocked off regularly. My rant for the day.


El Salvador: 71

Jamaica: 60

Venezuela: 48

Colombia: 39

Brazil: 22

Mexico: 15

Costa Rica: 11

U.S.A.: 5

Canada: 2


Vallarta/Riviera Nayarit Real Estate MLS (Multi-Dev Vallarta) Update

September 14, 2011

Over the summer real estate agencies seemed to have had a decent summer, at least keeping up to the activity they had seen in the earlier part of the year. July, however, was quite a good month with 21 sales reported in the MLS Multi-List Vallarta. That’s the good news. Unfortunately most of the sales had low prices. For the first time in quite some time, houses outsold condominiums (13-8). However, the average sales price for a home was only $185,000 ($350,000 for condos). One house sold for $3 million, however we removed this before calculating average price as it would have distorted it and would not have been a good indicator. So a good month for the number of sales, but not for what they sold for, except for the one in Punta Mita.

July was also an interesting month for the number of days these properties were on the market. Nine out of the 21 sales were on the market for over a year and one for four years. The average days on market for July was 775 whereas the average for the year has only been 380 (which is still quite high). So it seems that July was kind of a late Spring Cleaning; with properties that had been on the market for some time finally lowering or accepting a lower price in order to move the property. It is still a buyer’s market, and quite a good one at them. There are some very good deals out there.

In June there was also one sale for over a million ($1,250,000), which we removed as well to calculate average home sales price, as it was so far off the others. There were just three other house sales and they were all for under $170,000; even lower than July. Even condos fell to just over $200,000 for the average sales price.

In August home prices were back up to $381,000 (but just three home sales) and condos up to $250,000. The average sales price for a condominium is now back to what they averaged in 2007.

Days on Market has average 380 days so far this year.

An encouraging sign is that for the first time in awhile, American visits topped Mexican and Canadian visitors, in both July and August. Hopefully this is a trend for the upcoming high season.

The number of sales for the year is above 2010, although that’s not a hard year to beat! I think we’ll see 2011 in the future as the year the market started to bottom out and turn around.

Foreign Land Ownership in Mexico Revisited

August 2, 2011 recently posted an article by Barnard R. Thompson entitled Mexico Should Allow Foreigners Unrestricted Ownership of Beachfront Property that addresses the ongoing issue of whether foreigners should be allowed to own land along the borders and coastlines of Mexico. I was aware that this issue was up for review with the Mexican senate, but I didn’t realize that it was shot down in April of this year; a resolution to drop the ownership limitation did not pass as was hoped by many.

A legislative initiative submitted by Baja California Sur Senator Luis Alberto Coppola Joffroy in July of 2007, which after (occasional) debate — and failures of committees to act — was ultimately rejected by the Mexican Senate last April.

This is unfortunate. As Barnard mentions…

…such a change could be huge for Mexico’s tourism industry and economy, considering the number of non-Mexicans who would like to live, retire or have a second home on a sunny beach with actual ownership and title to the property.  And this is to say nothing about positive publicity, or added income from fees and taxes, increased foreign exchange, investment opportunities, development and growth, and the creation of jobs for Mexican workers, among other things.

And there is the ongoing argument, why is it that Mexicans can go up and buy real estate in the U.S. or Canada, but Americans or Canadians cannot? (or at least not along the border or coastline)

And also, why is it that Americans and Canadians CAN obtain title if they buy in the interior of Mexico but not in the restricted zones and what possible ramifications could this hold for them? Well, a situation came up recently when the IRA stated that all Americans that have a foreign trust must report it to them. I’m sure when they did this they were thinking more of those who have monetary trusts that have been set up in a tax haven country. But unfortunately, this is also affecting Americans who own real estate along the coast or border of Mexico. But, Americans who own property away from the coast or border don’t have to file, as they have title and don’t have to use the trust system! Doesn’t quite seem right…

Barnard explains more about how the trust came about…

The Mexican Constitution, in Article 27 (an Article that in one way or another has been amended some 16 times since 1917), deals with national ownership and territorial jurisdiction of lands and waters, and it grants the state “the right to transmit ownership thereof to private persons, thereby constituting private property.”  However, the first paragraph of Part I of Article 27 continues:

“Only Mexicans by birth or naturalization, and Mexican companies, have the right to acquire ownership of lands, waters, and their appurtenances, or to obtain concessions for the exploitation of mines or waters.  The State may grant the same right to foreigners, provided they agree before the Secretariat of [Foreign] Relations to be considered as nationals with respect to said property and not to invoke the protection of their governments, for that very reason, in matters relating thereto; under penalty, in case of noncompliance with the agreement, of losing the property they acquired by virtue of the same to the Nation.  Under no circumstances may foreigners acquire direct ownership of lands or waters within a zone of 100 kilometers along the borders and 50 [kilometers] along the coastline.

It should be noted that many foreign residents already “own” restricted zone properties in Mexico, through fideicomisos.  However, a fideicomiso — in this case a type of real estate trust, with a Mexican bank designated as trustee and holding possession of the land title — is not direct ownership.  With a fideicomiso, the foreign buyer acquires tenure rights to the property through the (up to 50-year) trust, which is renewable and transferable.

But, as mentions above, means you have to report that you have this trust with the IRS.

Certainly all nations have border concerns and sovereign needs to safeguard their coasts and territorial limits; however is it (still) realistic for Mexico to fear a foreign invasion from the north?  Could anyone today believe that hostilities might be instigated by non-citizens who have met the requisite qualifications to reside in Mexico — full or part-time residents living under the rule of Mexican law? As well, in today’s world considerations with respect to coastal properties should include economic assessments and not simply the behind-the-times discrimination of Article 27.  The latter being prohibitions that inhibit foreign investment and cost the nation money — outmoded concerns that should be addressed through up-to-date regulations.

Exactly right. These rules regarding foreign land ownership, established nearly a 100 years ago, are no longer relevant as they are don’t in any way protect Mexico from getting invaded. Its silly to even think so. If anything they are holding back investment in the country.

Tianguis, Pan-American Games and Miss Mexico Pageant

August 2, 2011

Puerto Vallarta and Riviera Nayarit are getting a shot in the arm of positive news and events that they certainly need.

Tianguis 2012 will be held at the Vallarta Convention center, an event that has always been held previously in Acapulco. Tianguis is the annual (and largest) travel fair and market for Mexican tourism. It brings in people from all over the place – nationally and internationally.

This came about because of strong cooperation between Riviera Nayarit and Puerto Vallarta to market the destination together as one. This is a great coup for the region, being the first place to hold the Tianguis since they decided to start moving it around the country. And great to see the two tourism offices coming together to make this happen. Hopefully its a sign of more compromise and working together on other projects down the line.

The Pan-American Games will also be taking place in the region, at least the water events such as sailing. This takes place this fall, primarily in Nuevo Vallarta. Good coverage should come out of this.

And the Miss Mexico pageant will be held in the region this September – that certainly should bring good coverage!

Very positive news regarding tourism for the region.

Mexico’s positive Tourism Dept. changes

July 28, 2011

In a piece featured with CNN a few days ago, a number of positive measures are mentioned with regards to what Mexico is doing to help its ailing tourism industry.

  1. Mexico has begun allowing holders of U.S. visas to enter Mexico, opening up the possibility of tourists to the United States extending their trips south of the border.
  2. Brazilians, Russians and Ukrainian visitors can gain travel permission to Mexico on the Internet, with no need for a visa. (In 2011 to date, Mexico has seen a 40.9% increase in Brazilian tourists, a 58.1% increase from Russia and 32.8% increase from China, according to Mexico’s tourism ministry.)
  3. Finally, for travelers from other countries, visas to Mexico in many cases can be obtained through a travel agent, erasing the need for trips to embassies.

These are important changes that should make it easier for people to travel to Mexico. Point #1 is an excellent move, as it allows for people that are planning to visit the U.S. to now, with no additional paperwork, visit Mexico at the same time. And point #3, that visas can now be obtained through a travel agent and not have to visit an embassy, is also a great idea. But will it be enough?

Mexico has to look at other markets, especially over the next few years while the U.S. economy is on the road to recovery, and allow Americans time to really see the reports on violence in Mexico for what they really are: it’s taking place in very specific places, which in most cases are far from the popular tourist regions, and its being sensationalized. At some point Americans will begin to understand that millions of Americans visit Mexico every year without ever experiencing problems and actually have a very good time.

But until then, Mexico has to look elsewhere, just like U.S. investors are looking elsewhere, at emerging markets. The U.S. and Europe are going to be tied down with debt problems, both sovereign and public, along with high unemployment, for some time to come. Public debt and unemployment are going to make it hard for Americans to travel, while people in emerging markets are not experiencing similar issues. They are not plagued by high debt and unemployment. Investors are looking at foreign emerging markets for better returns, it looks like Mexico is as well for their tourist industry.

For U.S. travelers specifically, the Commerce Department’s most recent data — for 2009 — shows that 31.7% of all U.S. international tourists go to Mexico. From 2002 to 2009, while U.S. tourism to Canada fell by more than 27%, tourism to Mexico from the U.S. increased by 5.1%. This happened even though the overall number of Americans traveling abroad decreased, from a peak of 64 million in 2007 to 61.4 million in 2009.

These are impressive numbers, and coming from the U.S. department of commerce, not Mexico’s: 1 in 3 American international tourists in 2009 went to Mexico.

However, although these new markets may provide tourists, they most likely will not be providing people or families that may be interested in real estate. Mexico’s strongest target markets for real estate sales remains in the U.S. and Canada, where travel to somewhere warm is for most people, only 3-4 hours away. For the local real estate market to make a serious bounce back, it needs Americans buying second homes once again. With real estate values still falling in the U.S., it seems this is still a ways away. Although the local market seems to be holding its own, its a long ways from the boom years from 2003 to 2008.