Hurricane Dean Update
The big question we continue to be asked is, “how
has this all affected the real estate market.” The
answer is that is has affected different parts of
the market in different ways. Beachfront
property has not fallen a single peso and some
has actually continued the rise we saw before the
storm, generally in the 15% to 30% range. No real
fire sales to be found but we have found a couple
pretty good opportunities. Downtown beachfront
values along the Malecon have gone up even
more as the rebuilding has driven prices up at an
accelerated pace. Commercial lease space along
the Malecon is about 90% leased. Very small
properties are now selling for at least a million
dollars US. Commercial properties away from the
beach and the “casitas area” are the only areas
experiencing a fall in prices. This is due to a
couple of factors.
has this all affected the real estate market.” The
answer is that is has affected different parts of
the market in different ways. Beachfront
property has not fallen a single peso and some
has actually continued the rise we saw before the
storm, generally in the 15% to 30% range. No real
fire sales to be found but we have found a couple
pretty good opportunities. Downtown beachfront
values along the Malecon have gone up even
more as the rebuilding has driven prices up at an
accelerated pace. Commercial lease space along
the Malecon is about 90% leased. Very small
properties are now selling for at least a million
dollars US. Commercial properties away from the
beach and the “casitas area” are the only areas
experiencing a fall in prices. This is due to a
couple of factors.
The casita area is a nicely master planned creation of
the same group that built and operate the port facility.
This area is being development as more of a
commercial/residential area for those who work in the
area. Its location, just off the main entry to the port
facility, also allows for a central business/commercial
area that will also compete for some cruise ship
tourists. These developers had built most of the homes
and businesses in the area prior to the storm and had a
fairly large inventory of new homes and building lots,
both commercial and residential, when the storm hit.
Most of the residents living in these areas left to work
tourism in places undisturbed by the hurricane, like
Cancun and Cozmel, while the town is rebuilt. The
result was many properties that had been rented
became vacant, reducing demand for the existing
inventory and creating a temporary drop in prices.
The expectation is that the values will quickly rise
when cruise ship activity begins again in September 08
and new homes planned for the area will be almost
three times the current cost of these smaller casitas
and commercial lots. There are really few of these even
available but worth keeping an eye out for.
the same group that built and operate the port facility.
This area is being development as more of a
commercial/residential area for those who work in the
area. Its location, just off the main entry to the port
facility, also allows for a central business/commercial
area that will also compete for some cruise ship
tourists. These developers had built most of the homes
and businesses in the area prior to the storm and had a
fairly large inventory of new homes and building lots,
both commercial and residential, when the storm hit.
Most of the residents living in these areas left to work
tourism in places undisturbed by the hurricane, like
Cancun and Cozmel, while the town is rebuilt. The
result was many properties that had been rented
became vacant, reducing demand for the existing
inventory and creating a temporary drop in prices.
The expectation is that the values will quickly rise
when cruise ship activity begins again in September 08
and new homes planned for the area will be almost
three times the current cost of these smaller casitas
and commercial lots. There are really few of these even
available but worth keeping an eye out for.
Overall, our opinion is that Costa Maya, which has seen
appreciations in the 20% range the last two years on
beachfront property, has its best appreciation days still
ahead. The reason for this is of course the capital
improvements currently being constructed but equally
important is the geography. The entire area, limited by the
Bay of Chetumal on the south and the Sian Kaan Bio-reserve to
the north, has about 65 miles of Caribbean beachfront. The
undeveloped portion of this is roughly two thirds, leaving only
about 40 miles of habitable beachfront. This small amount of
area is made even more valuable by the low density building
restrictions put in place by the government to prevent the over
building that occurred in other tourist areas of Mexico, most
notably the Cancun/Maya Riviera area. With the limited
geographic area and low density building restrictions,
combined with the infrastructure improvements, the new and
more upscale businesses the Malecon will generate from
increased ship traffic, a few appreciation spikes unlike
anything the already healthy market has seen can likely be
expected in the next few years. We jokingly refer to the Cancun
area as “Orlando Mexico” because of its grand tourist
industry. Costa Maya appears to be poised to become the
“Aspen” of Mexico with a very similar exclusivity caused by
the same limited space and resources that contributed to the
ultra posh Colorado resort’s real estate prices of today.
appreciations in the 20% range the last two years on
beachfront property, has its best appreciation days still
ahead. The reason for this is of course the capital
improvements currently being constructed but equally
important is the geography. The entire area, limited by the
Bay of Chetumal on the south and the Sian Kaan Bio-reserve to
the north, has about 65 miles of Caribbean beachfront. The
undeveloped portion of this is roughly two thirds, leaving only
about 40 miles of habitable beachfront. This small amount of
area is made even more valuable by the low density building
restrictions put in place by the government to prevent the over
building that occurred in other tourist areas of Mexico, most
notably the Cancun/Maya Riviera area. With the limited
geographic area and low density building restrictions,
combined with the infrastructure improvements, the new and
more upscale businesses the Malecon will generate from
increased ship traffic, a few appreciation spikes unlike
anything the already healthy market has seen can likely be
expected in the next few years. We jokingly refer to the Cancun
area as “Orlando Mexico” because of its grand tourist
industry. Costa Maya appears to be poised to become the
“Aspen” of Mexico with a very similar exclusivity caused by
the same limited space and resources that contributed to the
ultra posh Colorado resort’s real estate prices of today.
So back to the original question, “what about the real estate
market” can best be summed up by viewing Costa Maya real estate
using the "pizza theory". Some is better than others, but there really
is no bad pizza and there really is, with the exception of a few really
overpriced properties, no bad real estate in this market, given what
will likely happen in the coming few years. We would expect an
appreciation spike late in 08, when the improvement project is
complete and similar spikes will likely follow for several years as
investors buying property now, re-sell as demand for the limited
space exceeds the inventory. This is especially true for beachfront
property suitable for residential construction. In a few short years,
there will only be beachfront available to those capable of making
overwhelming offers, much like the property in places such as Aspen.
So the “buy low, sell high” theory is very workable in Costa Maya for
a few more years but that will change as investors buy up property
from local owners selling at today’s prices. The Mayan Coast Realty
team currently works with many local sellers eager to cash in on the
already fast appreciating market. The result is that in a real estate
market that resembles a pizza-fest, we have some very nice slices of
paradise.
So what do we recommend? Our recommendation would depend on
the buyer’s needs and budget but there are some very good deals to
be had right now. Smaller investors might consider a casita or lot in
town where prices are still relatively low but sure to go up when the
ships return in mid 08. The best deals are still the larger beachfront
parcels that can be sub-divided, a fairly simple process we can do
for our clients, and sold off for profit or to lower the price on the
parcel the buyer chooses to keep for themselves. For example, we
have a couple 100 meter parcels selling for under $5,000 USD per
lineal meter of beach front that can be divided and sold at today’s
market price of over $7,000 per lineal meter. We also have some
limited fractional ownership opportunities and properties in need of
repair that can be bought and renovated for well below even today’s
market value.
market” can best be summed up by viewing Costa Maya real estate
using the "pizza theory". Some is better than others, but there really
is no bad pizza and there really is, with the exception of a few really
overpriced properties, no bad real estate in this market, given what
will likely happen in the coming few years. We would expect an
appreciation spike late in 08, when the improvement project is
complete and similar spikes will likely follow for several years as
investors buying property now, re-sell as demand for the limited
space exceeds the inventory. This is especially true for beachfront
property suitable for residential construction. In a few short years,
there will only be beachfront available to those capable of making
overwhelming offers, much like the property in places such as Aspen.
So the “buy low, sell high” theory is very workable in Costa Maya for
a few more years but that will change as investors buy up property
from local owners selling at today’s prices. The Mayan Coast Realty
team currently works with many local sellers eager to cash in on the
already fast appreciating market. The result is that in a real estate
market that resembles a pizza-fest, we have some very nice slices of
paradise.
So what do we recommend? Our recommendation would depend on
the buyer’s needs and budget but there are some very good deals to
be had right now. Smaller investors might consider a casita or lot in
town where prices are still relatively low but sure to go up when the
ships return in mid 08. The best deals are still the larger beachfront
parcels that can be sub-divided, a fairly simple process we can do
for our clients, and sold off for profit or to lower the price on the
parcel the buyer chooses to keep for themselves. For example, we
have a couple 100 meter parcels selling for under $5,000 USD per
lineal meter of beach front that can be divided and sold at today’s
market price of over $7,000 per lineal meter. We also have some
limited fractional ownership opportunities and properties in need of
repair that can be bought and renovated for well below even today’s
market value.
Inventory of residential properties is very limited though and
another good reason to consider a renovation project. This came
about partially by our friend Dean but more so by the fact that the
area has a very limited construction market. This has begun to
change as builders from Chetumal and the slightly slowing Cancun
market have begun to move into the area. Prior to the storm, the few
local contractors there were in the area were booked for two years.
The growing number of new contractors from these more
sophisticated markets will likely raise the quality and building
standards in the area, as well as relieve the shortage of building
contractors that the boom had already created.
It is really a very simple situation playing out in Costa Maya. The
available inventory of property is very likely to be exceeded by the
demand for that same property in the very near future. Mahahual’s
exploding cruise industry, like it or not, will provide a higher
standard of living and quality of life for its local residents, while also
attracting businesses and services that benefit all the residents and
visitors of the remaining areas of Costa Maya, as well as drive
existing values at an accelerated pace for the foreseeable future.
Check out our page on this same site that explains foreign ownership
in Mexico and send us your questions. Costa Maya is a unique
opportunity to buy into one of the world’s fastest appreciating
markets while prices are still low and rising fast. The beauty of the
area and friendly people are just a bonus. When you see Costa Maya,
you will want a piece for yourself, so you might as well get it while it
is still relatively inexpensive.
another good reason to consider a renovation project. This came
about partially by our friend Dean but more so by the fact that the
area has a very limited construction market. This has begun to
change as builders from Chetumal and the slightly slowing Cancun
market have begun to move into the area. Prior to the storm, the few
local contractors there were in the area were booked for two years.
The growing number of new contractors from these more
sophisticated markets will likely raise the quality and building
standards in the area, as well as relieve the shortage of building
contractors that the boom had already created.
It is really a very simple situation playing out in Costa Maya. The
available inventory of property is very likely to be exceeded by the
demand for that same property in the very near future. Mahahual’s
exploding cruise industry, like it or not, will provide a higher
standard of living and quality of life for its local residents, while also
attracting businesses and services that benefit all the residents and
visitors of the remaining areas of Costa Maya, as well as drive
existing values at an accelerated pace for the foreseeable future.
Check out our page on this same site that explains foreign ownership
in Mexico and send us your questions. Costa Maya is a unique
opportunity to buy into one of the world’s fastest appreciating
markets while prices are still low and rising fast. The beauty of the
area and friendly people are just a bonus. When you see Costa Maya,
you will want a piece for yourself, so you might as well get it while it
is still relatively inexpensive.
Finished beach side of the Malecon sea wall.
The portion to the left below is where the paver
walk area is being installed.
The portion to the left below is where the paver
walk area is being installed.
Trench for the new sea wall just south of Tequila Beach Club. Phase I will
continue north to the lighthouse about a half kilometer from this spot.
continue north to the lighthouse about a half kilometer from this spot.
The habitable area of Costa Maya extends
from Mahahual south to Xcalak and about the
same distance north of Mahahual.
from Mahahual south to Xcalak and about the
same distance north of Mahahual.
| In Mexico Contact Ramon Moreno In The US Contact Steve Uhl MX 983-113-0677 US 949-892-7734 US 435-757-1620 |
| Click Here To Email Steve@ Steve@mayancoastrealty.com |
| Click Here To Email Ramon @ Ramon@mayancoastrealty.com |
| Click Here To Email Patti@ Patti@mayancoastrealty.com |
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