From the L.A. Times‘s Real estate regrets in Mexico (reprinted in the Baltimore Sun)
PLAYAS DE ROSARITO, Mexico – The ripples of the U.S. real estate boom began washing up on the shores of this beach town a few years ago. Californians, feeling flush from the steep run-up in housing values stateside, pulled equity from their primary homes and snapped up vacation properties in northern Baja California as if they were buying $10 lobster dinners.
We nearly had … fistfights” over choice units, said Michael Coskey, sales director of the Residences at Playa Blanca, … “We were all appealing to people’s greed.”
Greed has turned to regret for some investors who now can’t sell their Mexican properties.
Upward of 40 percent of the condos in some northern Baja projects were purchased by flippers who intended to resell before construction was finished…
But with contagion from the U.S. subprime mortgage debacle spooking many would-be purchasers and credit drying up, the Baja real estate market is flagging. Speculators are starting to sweat.
Speculators likewise are smarting in Puerto Penasco, also known as Rocky Point, a beach resort in Sonora state 60 miles south of the Arizona border on the Sea of Cortez, also called the Gulf of California.
Egged on by soaring real estate prices at home, Arizonans snatched up Puerto Penasco condos at “crazy” prices that topped $1 million for some penthouses, according to Dee Brooks, owner of Twin Dolphins Real Estate in Rocky Point.
She said many flippers haven’t been able to sell their units. Meanwhile, the rental market is so saturated that most can’t cover their costs by leasing their properties.
On the other hand … Penasco’s getting more investment dollars from Spain.
Raminova announces plans to invest approximately $650 million in tourism-related projects in Punta Cana, Dominican Republic; Panama City, Panama; Los Cabos, Mexico; and Puerto Penasco, Mexico, within the next year.
Raminova’s expansion plan, as well as its first project in the Dominican Republic, Cana Bay Beach Club & Golf Resort, is featured in this month’s issue of Smart Money magazine…
Raminova is a partnership between the Ramirez Group, a 75-year-old real estate developing company, and Caixanova, one of Spain’s largest financial institutions.
At the moment I’m unaware If Raminova has anything to do with Salvago Mexico – the subgroup of the Spanish utility Iberdrola that bought Laguna Del Mar a while back – other than the fact that they’re both located in Spain.