|Moving Abroad May See Post-Recession Comeback
When semiretired marketing executive Cole Martelli was looking to buy a home near the beach in a warm climate, Mexico made his short list, and won out over Florida.
|Foreign investors fueled Panama City's boom, top. David Muck and Cole Martelli opted for Mexico, Dan Prescher and Suzan Haskins for Ecuador. AP|
Martelli and his partner picked up a 3,000-square-foot Puerto Vallarta condo for $520,000 cash late last year. And they just might be on the leading edge of a renewing trend.
Home sales slowed in places like Mexico and Costa Rica after the U.S. housing and economic downturn. But interest is starting to pick up again in second-home and retirement markets outside the U.S.
"We are just now seeing an uptick in retiree relocation and I suspect there is a lot of pent-up desire to move," said Dan Owens, director of the National Active Retirement Association.
The economic downturn curbed the likelihood of relocation anywhere, he says.
"Retirees were squeezed by housing price declines and stock market losses," Owens said. "So they have been like deer in the headlights."
Away From The Fray?
Some destinations such as Nicaragua got hit hard. But home values in Mexican hot spots, despite occasional State Department travel warnings due to crime, didn't sink nearly as much as retiree-magnet markets in Florida, Nevada and Arizona. One big reason is that most buyers pay cash in the foreign havens.
Martelli had visited Puerto Vallarta on Mexico's Pacific coast and was enchanted by its beauty. It was also a fairly quick plane ride from Houston, where he lives with his partner David Muck.
Martelli says they "strongly considered" Fort Lauderdale, Fla., where prices have dropped 50% or more from the peak. But oversupply "kind of scared us away. ... We didn't see the bottom necessarily."
Mexico's real estate market seemed more stable by comparison. And Martelli felt Puerto Vallarta was unmarked by the violent crime wave that hit northern border regions and some other pockets, including Acapulco.
Martelli opted for the Avalon, a 12-story building in the hills overlooking Puerto Vallarta's Old Town. It sports stunning ocean views and the beach is a 10-minute walk. The place also came with a spacious gym, resort-style pools, a concierge and security.
"We felt we were getting a good value but it wasn't a bargain-basement price," Martelli said. "That gave us a higher level of comfort purchasing in Mexico."
There's a reason for that, says Wayne Franklin, broker-owner of Tropicasa Realty in Puerto Vallarta.
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"We don't have the debt against the properties so sellers don't have the motivation to drop prices dramatically," he said. "A lot of sellers say, 'I'll just wait.' Deep discounts are not the norm."
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