Riviera Real Estate Market and its Driving Forces.
We have all heard it said before that the baby boomers are searching for an easier less expensive lifestyle, one preferably where my 81 year old dad is fond of saying " I prefer to shovel sand than snow". This means boomers are looking for a place in the sun. They have their money, and sometimes they even have generational money. They know what they want and they are ready to take action and get it. More and more baby boomers are moving to Mexico to live part time or full time and enjoy a slower easier life style, and, so they never have to shovel snow again!
The second force is the broad demographics of our tourism. We have less expensive flights coming in to Cancun from all over Canada, USA, and Europe and of course it is a playground of the Mexicans. This means our economy is not dependent on any single area. If we look at Puerto Vallarta, 70 to 80% of the tourists are from the pacific coast states; California, Oregon, Washington, and BC, in Canada. So, if anything happens to the Pacific coast economy, Puerto Vallarta is empty. Here in Riviera Maya our tourism is coming in from so many different areas (just listen to the languages on the street) that we have a much more stable economy with good rental returns, as well as outstanding equity growth. A disruption in any foreign economy will not have much of an effect on this area.
Third, let's talk value, compared to any other major market in the world today. Think about this; how much will it cost to buy a new three bedroom home in a gated golf course community in the town where you live? Today, how much would it cost you to buy a luxurious 1300 sq ft ocean front condo?. We have choices of luxurious new Caribbean ocean front condos starting as low as $525,000 USD! Our foreign investors look at this kind of value and they simply write a check. For example, Spain has outstanding beaches with spectacular views, but prices are through the roof and everything is extremely crowded. Who do you think is the number one foreign investor in Mexico? Spanish companies. Why? Because they have seen the trend already in their mature market and they can see the same opportunity again here.
The fourth very interesting factor is the slow down in the USA, and Canadian real estate market. Let's explore that. We have been watching this development for some time and many people didn't understand it, until now when they can see it happening. Ask your self this; what does any savvy investor do when the market begins to show signs of slowing down? That's right, he is going to stick his head up above the crowd and look around to see where his next hot market is. In this case he is pre sold. His neighbor has been enjoying winters in their home in Mexico for years. Their developer friend has been building and doing well in Mexico as well. But he has not been investing here because he didn't need to, the market was strong and he was doing well.Now these investors are coming in droves. They are not coming to buy a property. They are mature investors and they are making multiple purchases.
That is why our market is so strong, and it's got a long way to go!