Select Mexico Properties

Forbes did a story the other day on the ten biggest declining real estate markets in the US. The list is interesting to look at because it tells a story about the luxury real estate market. In the number 10 and 9 spots were Cleveland and Detroit. You would expect this because they’re part of the industrial Midwest. These two cities have suffered a lot in the past few decades and it’s no surprise that real estate values are declining there.

For me, the rest of the top ten list was most surprising. Phoenix, Tampa, Las Vegas, Los Angeles, San Diego, Orlando, Sacramento and Riverside-San Bernardino were the markets that experienced the sharpest declines in property values. Many of these communities are at the center of the US luxury real estate market.

In Sacramento and Riverside-San Bernardino, the two areas that experienced the greatest decline, property values were off by 23% in each place. These properties lost nearly one-quarter of their value. Places like Orlando, Tampa and Phoenix are not only at the heart of the US luxury market, but they’re also some of the preferred destinations of US retirees.

No one expects a decline in property values, but a 25% drop is a little hard to take! And if you were counting on the value in your home in one of these markets to support your retirement, you may have lost a huge gamble.

For some people, loss in these markets represents an opportunity. But why risk buying depressed property on the assumption that the property value will rise again? How long will that take? Some experts predict that the US real estate market could take as much as a decade to recover from these losses.

A better strategy is to buy property in a performing market. Puerto Vallarta is definitely performing, with ten solid years of double-digit gains. Property is “value-priced” here right now, but as more investors look for opportunities to prop up their retirement portfolios, the opportunity to make big gains in the Mexican luxury real estate markets will become harder to find.

If you’re ready to invest in a luxury real estate market winner, please contact a Select Mexico Properties sales representative today and let us show you how you can benefit from the luxury real estate market.

Photo Credit: Kevin Jachelski