# The prices of Real Estate in Mexico continues to surprise me.



## mr_manny (Nov 22, 2013)

The prices of Real Estate in Mexico continues to surprise me.
Especially when you can find similar properties in the US for the same amount.

I guess it is a sellers market, and will continue as long as buyers are lining up.

Just wondering about It's impact on the people of Mexico...when the average annual salary is less then 18K Dollars.
Maybe the issue is with salaries...they aren't rising as fast as property values?

manny


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## lagoloo (Apr 12, 2011)

The real estate market in some areas of Mexico tanked a few years ago and hasn't yet recovered. It seems to follow the trend of the real estate market in the U.S., where many people went upside down on their mortgages and couldn't afford to move anywhere.

As far as prices in the U.S. being less, the important thing is, as always, location. There are many places where prices may be low, but people would rather live in Mexico than in those locations. Climate is a big factor.


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## TundraGreen (Jul 15, 2010)

mr_manny said:


> The prices of Real Estate in Mexico continues to surprise me.
> Especially when you can find similar properties in the US for the same amount.
> 
> I guess it is a sellers market, and will continue as long as buyers are lining up.
> ...


I am confused by your statement that "you can find similar properties in the US for the same amount". What do you mean by similar? Surely you are not arguing that a house in New York city costs the same as a house in Mexico City, the two largest cities. Nor does a house in a small town in mid-America compare in cost to a house in a village in Mexico. Nor does the cost of a house on the coast in California compare to the cost on the coast in Puerta Vallarta. 

Comparing current values of the two places I lived before coming to Mexico, in Colorado and before that in California, to the house in Guadalajara:

The California house is 1/3 the size and currently costs 6 times as much as the Gdl house. Per square meter, it is 18 times as expensive in that part of California.

The Colorado house is 2/3 the size and costs 3 times as much as the Gdl house. Per square meter, it is 4 or 5 times as expensive in that part of Colorado.

With real estate, location is everything. I have no doubt that you can find houses in Mexico that are priced similarly to same-size houses in the US, but in similar settings? I don't think so.


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## lagoloo (Apr 12, 2011)

Completely agree. I couldn't afford to buy the house I used to live in, in CA. For that, I'd need the family income of yore, pre-retirement. Taxes are also a big factor in some states, especially CA.

Some time ago, a poster cited a seniors mobile home place in McAllen, Texas at a tasty price, and tried to compare this with places in San Miguel de Allende or the Lake Chapala area. Chuckle of the day.

It's really all about the kind of life you want, and that includes the neighborhood and the activities available as well as the house itself.
I think most of us bought as much of the above as we could afford.


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## HolyMole (Jan 3, 2009)

mr_manny said:


> ..... Mexico...when the average annual salary is less then 18K Dollars......
> 
> manny


The average annual salary in Mexico is in the area of $18,000? $18,000 US ? 
I don't believe it for a minute.


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## mr_manny (Nov 22, 2013)

My comments are based on the following facts and observations.

4 years ago, My Mother built a modest home for 130K...in a small town 2hrs from GDL.
My Cousin is a real estate agent in Mesa, AZ and she has shown me similar sized homes for the same amount.

It seems the average annual per capita income in a PHX suburb is 25K.
Earlier this month, a fellow forum member posted average daily wage rates for Mexico...Jalisco's was 270 Pesos?
This equates to an average annual per capita income (in my Mother's small town) to be approx 7.6K.

Are future generations in Mexico going to face affordable housing issues?

The above may not be apples to apples, I guess I'm wondering if anyone else has thought about this...

manny


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## joaquinx (Jul 3, 2010)

HolyMole said:


> The average annual salary in Mexico is in the area of $18,000? $18,000 US ?
> I don't believe it for a minute.


It is less. A lot less. Around 13,000 usd.


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## RVGRINGO (May 16, 2007)

In the USA, you can mortgage a house with a tiny down payment, or none at all. You do not own the house; the bank does.
In Mexico, you buy the house with cash on the barrel head and you own it completely.

In the USA, the taxes will be in the thousands of dollars per year, and the utilities will be that high too.
In Mexico, taxes seldom exceed a few hundred dollars per year and utilities can be minimal if managed.

Climate, friendly people, fiestas, access to ocean beaches, etc......no comparison.


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## joaquinx (Jul 3, 2010)

Many Mexicans first buy the land. Save their money and pour a foundation and some walls. Next comes the ceiling. They then move in and save to add an additional floor and/or rooms. It takes years of savings, but at the end, they own the house and never paid a centavo in mortgage interest.


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## lagoloo (Apr 12, 2011)

I lived for a few years in a new barrio on the hills of San Miguel de Allende, where new housing was being built by many. The "stages" as described resulted in secure family housing for families.

IMO, one of the major causes of the housing bubble and its bursting was the policy of letting people have low down or zero down mortgages.
We know the result. Some bought on "no doc" basis. This did not result in the joy of majority home ownership as some politicians hoped. It resulted in a major financial disaster which left a lot of heart broken people who lost their homes after being conned into buying way more than they could afford.
Mexican loans are so expensive that it's a good thing all cash is often demanded.


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## joaquinx (Jul 3, 2010)

lagoloo said:


> IMO, one of the major causes of the housing bubble and its bursting was the policy of letting people have low down or zero down mortgages.
> . . . who lost their homes after being conned into buying way more than they could afford.


Good points, however, I feel that many were under qualified for the mortgages. Convincing borrowers that they qualified for a $200,000 house when there income set their mortgage at a much lower limit. Often times the mortgage broker simply fudged their application without the borrowers knowledge.


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## lagoloo (Apr 12, 2011)

That's what I thought I said, too. People were buying way more house than they could afford, and the mortgage brokers were complicit in the operation. Might have had something to do with the fact that they got their commission whether the people were able to pay or not.


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## TundraGreen (Jul 15, 2010)

joaquinx said:


> It is less. A lot less. Around 13,000 usd.


In another thread, there is a map of daily salaries in Mexico. They vary from about $200 mxn/day to $400 mxn/day.

Assuming 5-1/2 days/week of work at the low end and 5 days/week at the high end, those daily rates convert to $4400 usd/yr and $8000 usd/yr.


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## mr_manny (Nov 22, 2013)

RVGRINGO said:


> In the USA, you can mortgage a house with a tiny down payment, or none at all. You do not own the house; the bank does.
> In Mexico, you buy the house with cash on the barrel head and you own it completely.
> 
> In the USA, the taxes will be in the thousands of dollars per year, and the utilities will be that high too.
> ...


Good point.
Including some Mortgage data (which essentially doubles the cost of the US Home).

130K Original loan amount
1000 Monthly payment (20yr fixed at 5%)
240K Total for home and loan


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## TundraGreen (Jul 15, 2010)

Another aspect of the housing meltdown that I didn't appreciate until recently, is that people in the US were not just buying a house and then quietly making payments for 30 years until it was paid off. If that was the case, many more people would have had significant equity in their homes and there would not have been so many "under water".

Instead, many people used their homes as credit cards. As the value increased, they refinanced, taking cash out of the house for other expenses. Of course they were encouraged in this behavior by the financial system, but the result was that when prices crashed, many people owed more than the new value.


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## lagoloo (Apr 12, 2011)

It happens that there were more grasshoppers than squirrels at the time.
Us squirrels are well represented here in Mexico. Heh, heh.


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## sparks (Jun 17, 2007)

He's looking online which means absolutely nothing

Also Mexicans list at ridiculous prices and don't care if it ever sells ..... they are fishing


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## Longford (May 25, 2012)

mr_manny said:


> Especially when you can find similar properties in the US for the same amount.


For the past several years I've more seriously/actively looked at real estate prices in the USA, and Mexico, in anticipation of what I expect will be my retirement from work about a year from now. I'm still a bit conflicted as regards buying vs. renting. Buying in the USA may make more sense for me, if I choose to stay here ... and renting in Mexico is probably the smart thing to do if I relocate to Mexico or another foreign country.

What I've seen/learned which satisfies my personal needs/wants is that my money is probably better spent buying a condo/home in the USA as compared to buying something similar in Mexico. Beyond the purchase price, obviously, are taxes, maintenance, etc. Taxes and maintenance costs in Mexico are less, but one generally gets less for the lesser prices, IMO.

As for renting an apartment: I think the better "deals" are in Mexico when one considers climatic options and monthly costs. However, the best "deals" are offered for apartments or small homes which picky/materialistic expats may not find attractive or located in first-choice neighborhoods.


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## Hound Dog (Jan 18, 2009)

Longford said:


> For the past several years I've more seriously/actively looked at real estate prices in the USA, and Mexico, in anticipation of what I expect will be my retirement from work about a year from now. I'm still a bit conflicted as regards buying vs. renting. Buying in the USA may make more sense for me, if I choose to stay here ... and renting in Mexico is probably the smart thing to do if I relocate to Mexico or another foreign country.
> 
> What I've seen/learned which satisfies my personal needs/wants is that my money is probably better spent buying a condo/home in the USA as compared to buying something similar in Mexico. *Beyond the purchase price, obviously, are taxes, maintenance, etc. Taxes and maintenance costs in Mexico are less, but one generally gets less for the lesser prices, IMO.*
> As for renting an apartment: I think the better "deals" are in Mexico when one considers climatic options and monthly costs. However, the best "deals" are offered for apartments or small homes which picky/materialistic expats may not find attractive or located in first-choice neighborhoods.


Really?

I think not.

Here in Mexico in two treasured urban áreas, we own two very nice homes for a small fraction of what we would pay for a lousy two-bit shack in or around San Francisco. Property taxes on the cpmbined homes are miniscule compared to California or, for that matter - rural Alabama. The prices for utilities, food, property taxes and all necessities are a fraction of similar costs in the U.S. and even less when compared to France where we also had the option to retire.

We have lived here as retirees for some 14 years. Visit France often but at our discretion. We own both Mexican homes outright with laughably minimal tax obligations. If things go bad here, we can live on oranges. limes and tortillas and still afford gas to heat the house (never a need to cool it). Try that in France or Alabama.


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## Longford (May 25, 2012)

If someone were to suggest to me that the services provided NOB in 2014 as a result of real estate taxes paid there are no greater and/or not of a higher quality than what's received in Mexico for the much smaller property tax amount that's paid ... I'd suggest a person offering such a comment probably didn't know what they're talking about.


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## TundraGreen (Jul 15, 2010)

Longford said:


> If someone were to suggest to me that the services provided NOB in 2014 as a result of real estate taxes paid there are no greater and/or not of a higher quality than what's received in Mexico for the much smaller property tax amount that's paid ... I'd suggest a person offering such a comment probably didn't know what they're talking about.


I agree that the services provided with property tax money are at a much higher level in the US. I would be happy to pay more property tax in Guadalajara if it meant that they streets would be kept free of trash, pavement would be repaired more often, police were paid enough that corruption was not a necessary part of the job, the schools were better. Whether the difference in property tax levels is commensurate with the difference in service levels is an interesting question. My property taxes in California were $6000/year, in Colorado $4000/year. Here they are $100/year.


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## Longford (May 25, 2012)

Yes, there are trade-offs. Comparing the two countries with different economies, rates of pay/salaries, costs of goods/services, etc., is largely an apples-to-oranges one. Also, what _was_ a decade ago, or _several decades_ ago ... seems to me to be irrelevant in some or many instances. My current property taxes in Chicago for a slightly less than 2,000 sq. ft. condominium in a 7 ac. property with one building which is well-maintained is slightly less than US$2,000 per year. That number will drop to about US$1,000 next year due to my age. 25 years ago I owned a slightly larger (than my current condo) single-family home in one of Chicago's "better" suburbs with fantastic schools, wonderful city services, etc., and I paid US$7,700 in property taxes each year. Taxes on that same home are currently more than U.S.$11,000.


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## sparks (Jun 17, 2007)

TundraGreen said:


> My property taxes in California were $6000/year, in Colorado $4000/year. Here they are $100/year.


Here they don't have tax collectors and they don't tax houses that are still under construction. It's up to you to go register your house as finished. The old story of rebar sticking up from the roof means unfinished isn't necessary .... nobody checks.


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## Hound Dog (Jan 18, 2009)

[_QUOTE=Longford;6032122]If someone were to suggest to me that the services provided NOB in 2014 as a result of real estate taxes paid there are no greater and/or not of a higher quality than what's received in Mexico for the much smaller property tax amount that's paid ... I'd suggest a person offering such a comment probably didn't know what they're talking about.[/QUOTE]_

You are *seriously *misinformed. In San Francisco´s Russian Hill/North Beach and later in rural but affluent Sonoma County in Northern California in the remote Mayacamas Mountains between Santa Rosa and St.Helena (Napa County) , we paid confiscatory property taxes (I´d say at least $3,000USD a year) and, to the best of my knowledge, received nothing in return. When we were living up the Mayacamas Mountains on the Sonoma/Napa county lines, our country roads were in disrepair and our municipal protection consisted of a personal 12 gauge shotgun and a .38 police revolver plus three monstruous Bordeaux and a giant Neopolitan mutt. For our county services we paid the equivalent of about $3,000USD a year in California property taxes. In Chiapas in the charming, historic city of San Cristóbal de Las Casas , for a home of equivalent value, we pay the equivalent of $*25USD* per annum in property taxes and have no shotguns nor pólice revolver nor even a sledge hammer for protection but the local San Cristóbal cops, to say nothing of our Mexican neighbors, are within minutes of coming to our rescue and the municipal services we receive for that lousy $25USD per annum would put any communiity we have ever inhabited in the U.S. from Alabama to California to either urban or rural France to shame. 

Retire in a place you wish to inhabit but do not plaster this board with misinformation about Mexico or governmental services available at reasonable cost here based upon unfair assumptions drawn upon unwarranted preconceptions despite your intermittent travels here and there as a businessperson. Time to slough off old notions. 

Otherwise, I welcome your presence if you retire here. We need more visits to the equivalent of the imposed ascensión up sand mountain at the behest of an assigned drill sargeant. Otherwise, I find your postings here to be entertaining.


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## AlanMexicali (Jun 1, 2011)

Longford said:


> If someone were to suggest to me that the services provided NOB in 2014 as a result of real estate taxes paid there are no greater and/or not of a higher quality than what's received in Mexico for the much smaller property tax amount that's paid ... I'd suggest a person offering such a comment probably didn't know what they're talking about.


You are wrong. Your assumption that property taxes in Mexico equate to the county property tax system in the US is false.

Secretaries of public security at state and federal levels pay for policing.

Federal public schools are funded by federal money. State public schools are funded from state money mostly federal loans and shared IVA, Pemex revenue, SAT taxes etc.

Roads and municipal public works and inrastructure are funded by state taxes and federal loans and federal and state tax sharing. If SAT collects taxes from residents of a state it is earmarked for that state or a portion is.

Teachers and schools are paid by the Secretary of Education, a federal and state shared tax based system.

Municipal real estate taxes go into the municipal coffers.

No where is there even a slight similarity in tax funded systems here and Chicago.


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## Longford (May 25, 2012)

Hound Dog said:


> [_QUOTE=Longford;6032122]You are *seriously *misinformed. ... we paid confiscatory property taxes (I´d say at least $3,000USD a year) and, to the best of my knowledge, received nothing in return._


_

Your comments lead me to believe that either you didn't read your tax bill, or didn't understand what it disclosed. But if you have a link to the current property tax information for those communities readers might understand what you're saying. 




the municipal services we receive for that lousy $25USD per annum would put any communiity we have ever inhabited in the U.S. from Alabama to California to either urban or rural France to shame.

Click to expand...

The discussion isn't about what did or didn't happen decades ago. As I view it, decades-old information is irrelevant as to a discussion of current events. Apples-to-oranges comparisons. But, yes, I've read your many comments expressing how underserved you've been, seemingly everywhere you've ever lived before moving to Mexico. What can I say? For some people ... there are always dark clouds overhead. :ballchain:




Retire in a place you wish to inhabit but do not plaster this board with misinformation about Mexico or governmental services available at reasonable cost here based upon unfair assumptions drawn upon unwarranted preconceptions despite your intermittent travels here and there as a businessperson. Time to slough off old notions.

Click to expand...

Well, when it comes to plastering this board with personal attacks, misinformation and either irrelevant/off-topic or seemingly fictional tales ... I'll suggest you've taken the prize. I choose to live in the present, not drown in the past. :jaw:




Otherwise, I welcome your presence if you retire here.

Click to expand...

Whether I choose to return to Mexico to live once again would have nothing to do with your sentiments, Thank God! :biggrin1:

I also wouldn't be in Mexico because either i) I couldn't afford to live elsewhere, or ii) I was a refugee from a land in which the people didn't like me ... which is why some other expats reside/hide in Mexico. I would be in Mexico because it was my best choice out of many options, not a last option or act of desperation where I'd live in relative isolation from others. :yo:

And to *all* of our forum participants and visitors who just read what we write without commenting:

May you have the gift of faith,
the blessing of hope
and the peace of His love
at Christmas and always.

:wreath:_


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## dwwhiteside (Apr 17, 2013)

As the saying goes, the three most important factors in real estate are location, location and location. My wife and I have purchased 2 lots in the past twelve months in a newer, nicer neighborhood in the northern part of the city of Colima. I can compare the prices we paid for those lots with prices I was finding for lots near Dallas just a couple of years ago. On a per square meter (or per square foot) basis, the price for the land alone was actually very close. 

Here, though, are where the differences come in. The lots here for a "typical" single family home do tend to be smaller than those in most parts of the U.S. Making the overall cost of the lot lower. Also, construction costs here are much lower. Where in the U.S. the building typically constitutes 80% - 90% of the total cost, here it is more like 50% - 60%. And the quality of construction is MUCH better, i.e. true, solid masonry, steel and concrete construction vs. wooden and vinyl.

All in all, the home I am living in now; a new, custom built home with some great amenities, cost about 2/3 of what a smaller, older tract home home would cost in a similar neighborhood near Dallas.


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## Hound Dog (Jan 18, 2009)

Dawg was born and raised in rural South Alabama - one of the poorest regions in the United States.; later moved to Los Angeles and San Francisco - among the most affluent regions of the United States, traveled on a dime as a curious young man to some of the poorest regions of Europe, Africa and the Indian Subcontinent and, 14 years ago, retired to relatively prosperous Jalisco State in Mexico and then, eight years ago, to poverty stricken Highland Chiapas, this nation´s poorest state where the grinding poverty in rural áreas is almost unimaginable to most expats living here in Mexico who have not observed it directly. As I noted earlier, we pay property taxes in Chiapas of the equivalent of $25USD a year and the equivalent of aboiut $200USD a year at Lake Chapala, Jalisco. We don´t utilize public schools in either place which are disgraceful (as were the public schools in Alabama in the 1940s and 50s) so won´t speak to that issue but public infrastructural improvements and maintenance and public services available TODAY in both Chiapas and Jalisco are on par with any places I have ever resided as a middle class person and at miniscule cost to us personally. Yes, the corruption is daunting but the corruption in rural Alabama in the time of my youth was also endemic and pervasive. This is the curse of poverty stricken regions the world over and even some relatively affluent huge urban áreas in the U.S. midwest noted for violence, corruption and unbearably cold winter seasons. Well; off to Chiapas. I hope I make it in one piece and, thank God, I can get there without transiting any freezing U.S. urban hellholes.


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## Hound Dog (Jan 18, 2009)

[_QUOTE=dwwhiteside;6036522]As the saying goes, the three most important factors in real estate are location, location and location. My wife and I have purchased 2 lots in the past twelve months in a newer, nicer neighborhood in the northern part of the city of Colima. I can compare the prices we paid for those lots with prices I was finding for lots near Dallas just a couple of years ago. On a per square meter (or per square foot) basis, the price for the land alone was actually very close. 

Here, though, are where the differences come in. The lots here for a "typical" single family home do tend to be smaller than those in most parts of the U.S. Making the overall cost of the lot lower. Also, construction costs here are much lower. Where in the U.S. the building typically constitutes 80% - 90% of the total cost, here it is more like 50% - 60%. And the quality of construction is MUCH better, i.e. true, solid masonry, steel and concrete construction vs. wooden and vinyl.

All in all, the home I am living in now; a new, custom built home with some great amenities, cost about 2/3 of what a smaller, older tract home home would cost in a similar neighborhood near Dallas.[/QUOTE]_

While our experience does not mirror yours precisely, we have also shared in your good fortune at having moved to Mexico in 2000 after selling our home in Northern Califoria when realizing we were sitting on all that equity in a very nice city but could sell that property and retire early at ages 54 and 59 respectively originally considering the Alabama Gulf Coast, Arizona, New Mexico and France but finally settling on Mexico for a number of reasons - much of it having to do with the splendid climate in the highlands.

We considered Colima at one time and still like that attractive town offering a reasonable cost of living. We were drawn to Ajijic, Jalisco because we had five huge dogs who we could walk on endless kilometers of deserted and beautiful beaches without leashes where the little monsters could pretend to chase birds into the vast lake. Later,we found living in Mexico so reasonably inexpensive we were able to purchase a second home in the heart of the old charming colonial center of San Cristóbal de Las Casas which, while lacking the amenity of vast deserted beaches for out mutts, provides a nice seasonal change from the Lake Chapala área for us all. 

We feel no pride at having found a way to live on much less retirement income than would have been even remotely feasible in San Francisco - just fortunate to have found interesting places to live in fine and splendid climates with interesting urban demographics in extraordinarily beautiful, mountainous environments. I would guess that similar housing at that cost in Greater San Francisco would have proven an impossible dream for us and just to maintain our lifestyle there we would have had to have worked for several more years and then have been compelled to leave there eventually anyway.

Now, we could have found reasonably inexpensive housing and a more reasonable cost of living in those places we were looking at in Alabama, New Mexico and Arizona but we have found living in deep Mexico in two quite disparate regions to not only have been a great move from a financial standpoint but from the standpoint of learning and enjoying cultures new and fascinating to us personally.

By the way, we also built our home in San Cristóbal in that city´s historic center from the foundation up as that property had become a ruin over many years and, although one of us had to be present during the course of re-construction, we found the associated costs and construction quality to be excellent and the cost of the Project overall to be a small fraction of any such project in San Francisco.

To each is/her own.


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