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Mexicans like to purchase land in South Padre because they consider it good as gold
546 Views :: 8 Comments :: :: South Padre Island, Investment
Mexicans like to purchase land in South Padre because they consider it good as gold!

Billions of dollars move between Mexico and the Untied States each year. In South Texas, Mexicans and their corporations are pouring their money into real estate, businesses and retail shopping on the USA side.

Mexican Nationals are also investing heavily in the open land to the north of South Padre where soon utilities and development activity could open up a Beachfront area twice the size of the town of South Padre Island.

Factors at work in the money streaming north include valuable real estate at reasonable prices, a desire to gain access to American consumers, opportunities created by a cooling economy and weaker dollar, as well as amenities such as shopping, and of-course, South Padre Island.
 
There is a marked increase in investment moving north from Mexico over the last year and a half, since the real estate market slowed down in the United States, the dollar dropped in value and oil prices increased.

In 2006, Mexican companies' investment in the U.S. grew by 60 percent to $6.1 billion. U.S. companies' investment in Mexico is far larger but grew only 13 percent to $84.7 billion during the same year, according to preliminary figures from the U.S. Department of Commerce's Bureau of Economic Analysis.

In Texas, Mexican companies' affiliates held $1.6 billion in property, plants and equipment in 2005, the most recent year for which state-level data is available from the Commerce Department. That was up from $1.4 billion in 2002, putting Texas second only to California in Mexican direct investment.

Mexican companies operating in the U.S. also account for 4 percent of the jobs attributed to foreign direct investment in Texas, compared to 1 percent for the country overall. An article published by the Federal Reserve Bank of Dallas in November attributed that to "Mexico's proximity to Texas and the market opening under the North American Free Trade Agreement."

Economic development officials, real estate consultants and bankers in the Valley say the United States is simply a better place to invest. The appreciation is three to four times that in Mexico. 

Read the Forbes News Story

Watch video on Mexican Buyers

Watch video on the land north of South Padre
"I think there's been a trend over the last several years of Mexican nationals purchasing second homes, vacation homes, in the Valley," said Fred Rusteberg, president and chief executive of International Bank of Commerce-Brownsville. Monterrey residents visit their condos on South Padre Island several times a year and "people from Mexico City are looking for safe environments for their families to relax," he said.

At Alice Donahue Real Estate we have seen a dramatic increase in buying activity from Mexican Nationals and also we have noticed that they are some of the friendliest and well mannered residents we share the Island with - and fair and honest business people. We welcome them and the majority of our South Padre office is fluent in Spanish.
South Padre Island Interest Levels in Real Estate 

Interest in the South Padre Island area is strong, based on information collected from AliceDonahue.com and TexasGulfCoastOnline.com - the web sites that receive the bulk of the traffic for real estate activity in the area. 

Our tropical climate, blue water and white sands are always a big draw; in addition to, our remarkable new high-rises, our two-nation vacation and our strong real estate market values. Our median price is the highest on the Texas coast, nearly double that of Galveston, and we have the luxury of two nations coveting our tropical paradise.

The following charts illustrate the interest levels for the South Padre Island area and the buyer demographics. At the moment, our sales volume is down from the nationwide buyer hesitancy, but our median price continues it's steady upward trend year after year. 

Now is a great time to invest in our area, as there are bargains available and special incentives on our newer products. Want to know what they are? Contact us soon, before they are all gone!  Thinking about selling? Hold-on, in just a few months our market will be in a much better position for you. If you must sell, we can show you how to save money on commissions and transactional costs - and pass those savings on to your buyer. 

Stay tuned, AliceDonahue.com Real Estate and several major developers from both the USA and Mexico, are about to announce several new development projects that are going to rock the world and blow the doors open on our market.

This chart shows that traffic and Interest in the South Padre Island area is at an all time high


Worldwide traffic shows we get the most international traffic from Mexico and Canada


From within the USA, we see the most interest from California, New York, Colorado, Illinois and Florida


From within Texas, we see the most interest from Houston, San Antonio, Austin, the Rio Grande Valley and Dallas


From Mexico, we see the most interest from Monterey, Mexico City and Reynosa

Texas exports are up a solid 10.4 percent from year-ago levels

If you need to know what's happening with the real estate market for the South Padre Island area, contact us and we will be glad to share the information with you. We have a complete data warehouse of information collected from our industry leading real estate web portals. We also have developed sophisticated forecasting tools from the data that can show you where our market is heading in the short and long term - and for which product types and buyers.

When it really matters - you can count on us!

checkout our analysis section on texasgulfcoastonline.com
Rating
Comments
By Xavier @ Tuesday, June 10, 2008 5:24 PM
This is another interesting development that will generate zero activity on the north end.
By Stuart @ Tuesday, June 10, 2008 5:45 PM
The new mysterious NAFTA Super Corridor will spur greater trade between Mexico and the United States.

Since 2000, American exports to Mexico have increased by 55.2 percent to $110.8 billion, while imports have grown 44.8 percent to $155.8 billion.

In 2005, Kansas City Southern completed
purchase of a controlling interest in Transportacion Ferroviaria Mexicana (TFM), enabling TFM, The Kansas City Southern Railway and The Texas Mexican Railway Company to operate under common leadership, creating a seamless transportation system spanning the heart of North America known as “The NAFTA Railway.”

This trading partnership will only benefit
and grow as a result of the new trade route, benefiting the economies of cities and towns along the way.
By Sam Culver @ Saturday, June 14, 2008 1:32 PM
Welcome to South Padre Island, our Mexican friends! Please make yourselves at home, and spend lots of money, because we really need the business. The heavy-handed police have chased away most of the free-spending spring breakers, leaving condo owners with a lot less rental income. (One rental manager I spoke to said spring break rentals were down an amazing 70% this year.) With less rental income, and mortgages supposedly more difficult to obtain, property values are falling fast. BUT, for you rich Mexicans that means there is a HUGE selection of wonderful properties on the market - at discount prices.

I heard a lot of maquliadoras are closing on the border, with production going off to lower cost China. But, I know there are still lots of you rich Mexicans out there, just itching for a beachfront bargain. (Oops, I forgot, half the beach washed away since last year, and there is no solid plan to rebuild it. Will you settle for a waterfront property on the Gulf instead?)

With the price of gas so high, everybody but the staff at Blackbeards thinks tourism is down significantly this year. That will also help make it a buyer's market.

And let's not forget about our USA buyers:

Whoever runs this website - can you do a story on what it takes to get an island mortgage these days? I'm sure it is more difficult these days, but not impossible, right? Walk us through the updated process with an island mortgage specialist. Show us that it is still possible to get a mortgage, so we can start working our way through the big inventory of property we have on this island.
By Stuart @ Saturday, June 14, 2008 2:12 PM
Most buyers for second homes have good credit, pay cash or execute 1031 exchanges. We have not had any clients have an issue obtaining a mortgage.

The median prices on South Padre Island are up year over year, even through the national real estate sales volume slow-down.

Our very attractive climate, blue water and white sands have an enduring appeal that will always help keep our property values solid.

We have new high-rise condominium projects that are the envy of the coast, selling well and more on the way.

The issues we do have with housing on South Padre Island relate mostly to some of the older products, which have not been upgraded or reduced in price to remain competitive with our newer products. Especially interior products off of the ocean and bay built in the early 1980's.
By Sam Culver @ Saturday, June 14, 2008 5:07 PM
I'm one of those poor guys who can't afford a $250K, one-bedroom, 30 year old beachfront condo. Instead I have to stay inland, and use a public beach access. And I can tell you quite surely, that our neighborhood property values are dropping like a rock. I've seen sellers reduce their price by 20% over what the agent said they could get last year, and they still haven't received an offer. If the median price on this island is increasing, it may be due to those new $500K beachfront condos finally being completed, which would seriously skew the average sales price data upwards.

As far as the white beach sand goes, it's almost gone on the north end of the island. A few days ago I was walking on the beach a few blocks north of the Inverness. In one place, at high tide there was only about 15 feet between the dunes and the water. The sand is wet,and when it's wet, it's brown - not white. Not even dry enough for sand crab holes. Of course they still have a beautiful beach in front of the Radisson, the envy of every gulf front property owner, but even beachs on the southern part of the island have been shrinking:

http://www.spadre.com/surfcam.htm

During the recent election I heard a lot of talk from the mayorial candidates about fixing the beaches, but have seen no plans for serious action - just talk. The beaches need constant work, and without a strong local government to stay on top of it, this island's primary attraction is quickly fading away.

Sometimes I wonder if there are other less obvious problems with the beach. I would be the last one to complain about a lack of seaweed, but when is the last time you saw DPW cleaning up huge piles of seaweed on a daily basis? Ten years ago they simply couldn't keep up with it. (Most of the seaweed we have now is that little white matchstick type, easily ignored.) I have also noticed very few (if any) sandpipers, which used to give the island so much character. I'm really starting to wonder about the quality of that water, and its ability to maintain normal marine life. Look at all the tar balls washed up on the beach as well. Most aren't sticky, like they were 30 years ago, but there seem to be a lot more of them now. When strolling along the beach you really have to keep your eyes down, to avoid stepping on them. Or maybe I'm just more sensitive to it now. With the price of oil so high, maybe they're drilling more in the gulf these days, and that's where the black hunks of hard goop are coming from?

The climate is usually great, I can't argue with that. And that isn't likely to change, aside from the normal tropical disturbances. This island has its share of problems, but I still think it is the best place in Texas. Have a margarita on the bay with a plate of fresh gulf shrimp at sunset if you don't believe me....

Let's do whatever it takes to preserve this wonderful place.
By Stuart @ Thursday, June 26, 2008 7:19 PM
More than a century and a half after Mexico lost Texas to the U.S., Virgilio Garza wants a piece of it back.

Texas is like our home, said Garza, 45, who joined hundreds of Mexicans poring over lists of Texas properties at the four-day event. Garza, who owns manufacturing sites and other land in Mexico, said he and five partners may invest as much as $8 million in Texas. We believe there can be some opportunities.

A rising peso and an economy growing faster than the U.S. have given some Mexicans the buying power to take advantage of the housing slump in Texas, which the U.S. annexed in 1845 after Texans gained independence from Mexico nine years earlier. A three-year war followed and ended with Mexico ceding about half its territory, including Arizona, Nevada and California, to the U.S. under an 1848 treaty.

The peso has gained 5.9 percent against the dollar since the beginning of the year. The Mexican currency today was little changed, slipping less than 1 centavo to 10.2952 pesos per dollar at 9:43 a.m. New York time. The economy, which rose 2.6 percent in the first quarter from a year ago, is expected to grow 2.6 percent this year, according to a central bank survey of 31 economists in May. The U.S. economy is forecast to grow 1.4 percent in 2008, according to a Bloomberg survey of 57 economists.

Marco Ramirez of McAllen, Texas, is among those trying to sell foreclosed Texas homes to Mexicans. Ramirez's company, called Now! Co., has bought 32 Texas properties and has options on 88 more. His best prospects are Mexican buyers, especially in Monterrey, 150 miles from the Texas border, he said.

Great Time to Buy

Many of these people have children who are studying in the U.S.,'' Ramirez said.

They've been renting or leasing and now it's a great time to buy.

Mexico is better known for providing the U.S. with cheap labor than investment. The U.S. is home to an estimated 12 million Mexican-born residents, about half of them living there illegally, according to the Pew Hispanic Center in Washington.


While Texas hasn't been hit as hard as California and Florida, where the housing boom drove up prices the most, existing home sales in Texas fell 12 percent from a year ago in the first quarter.

Garza and other Mexicans with money to invest believe the time is right to buy, Ramirez said.

These are very sophisticated businessmen and they realize what's going on in our country.

Everybody needs cash right now and Monterrey has lots and lots of cash.

The only requirement for foreigners purchasing residential and commercial property in the U.S. is a valid visa to enter the country.

We think there's opportunity to buy right now at reasonable prices, Garza said. We want to keep the properties two or three years until the market turns around and then begin to develop them.'

To contact the reporter on this story: Thomas Black in Monterrey, Mexico, at tblack@bloomberg.net.
By Joseph Cardel @ Thursday, July 03, 2008 7:18 AM
Mexicans may like SPI, but where are the buyers? June sales were terrible. Only 30 properties were sold in the entire area, compared to 83 during the same month last year, and 93 in June of 2006. June is normally the hottest month for island property sales. Something is very wrong here. There are 936 properties currently on the market, a 31 month supply at the current sales rate. My heart goes out to the sellers and their agents.
By Stuart @ Thursday, July 03, 2008 7:25 AM
Many of the sales we have today are for the remarkable new construction projects like the Sapphire.

We have sold over 40 of these units, each for more than $500,000 and these are not recorded in the MLS.
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