I’m Betting On This Beach Resort For 2018
This is the time of year at Live and Invest Overseas when we take stock of the best performing markets of the current year and make our predictions for the best performers of the coming year.
For 2018, my money’s on Mazatlán, Mexico.
Yes, it’s true that I already own property here. And, as much as I’d like to tell you that it’s because of my investing prowess, it was really just luck…
Because what’s going on here is something that nobody saw coming.
Here Are Three Big Factors Affecting The Mazatlán Market Today
Every market has its local driving forces and special considerations. Here are three big ones for Mazatlán as we approach 2018.
#1 The Newly Completed Highway
The Mexican government recently completed a new highway between Durango and Mazatlán. The trip used to take between six and eight hours, and now it takes just three. One of Mexico’s largest infrastructure projects, the 143-mile (230-km) highway includes an amazing 115 bridges and 60 tunnels.
The three- to five-hour reduction in the drive time is critically important in this case, because (for people in Durango and beyond) it allows Mazatlán to be a weekend destination instead of an annual vacation destination. This has increased the number of visitors to Mazatlán noticeably.
And, this year, it looks like those visitors are starting to buy.
#2 A Major Upgrade To The Recently Renovated Historic Center
The recently renovated historic center is undergoing another major upgrade, and so are other coastal sectors. Here are some of the projects just finishing up:
- Lights have been embedded in sidewalks to wash over the fronts of historic buildings at night.
- The sidewalks were widened and renovated for a much better walking experience.
- The paved streets were ripped up and replaced with cobblestones.
- Thousands of palm trees were planted along the streets, creating more shade and better visual appeal.
- Antique-style lights were installed throughout and connected to the city water system, so they can automatically water the hanging plants that are suspended from them.
- Flowering plants, small palms, and bougainvillea have been added to the sidewalk borders.
In addition, many less romantic upgrades have been completed. Underground electric service was installed in the historic center to many of the homes that still had wires strung down the street, and the downtown also received new sewers, internet cable conduits, and underground high-tension electrical service.
Outside of the historic center, there’s even more going on…
The Mazatlán boardwalk—claimed to be the world’s longest at five miles (eight kms)—has been widened and renovated. In many sections, bike lanes have been added, along with new exercise areas and beachfront locations for assembly… for small concerts, expos, etc.
This massive upgrade was brought on by Mazatlán’s selection as the host of the 2018 Tianguis international tourism convention, which brings thousands of tourism professionals from around the world.
Mazatlán was selected as the venue in February 2017, and they subsequently received a huge grant for these infrastructure upgrades. Prior to that time, no one saw this windfall on the horizon.
#3 The Property Inventory Is Drying Up
Although it’s too early to get good 2017 statistics, empirically, the inventory has really cleared out. I notice this everywhere, from the missing sale signs on buildings to the reduced listings on real estate websites.
For a couple of years, I was able to use some of the same property examples over and over in different articles about Mazatlán. They not only remained for sale but, in some cases, their prices were actually going down as time went by. In the past six months, however, these old favorites have been sold.
To pick another example, the new oceanfront project Torre eMe is at the south end of Mazatlán’s longest beach and walkable to the historic center. The beach and the area are most popular with Mexican buyers. They had nine ocean-facing units for sale at the end of September. But, when I stopped by on Nov. 28, they were gone.
So today, those large, luxury apartments for under $200k on the beach are almost all sold (although I found one today) and the remaining historic properties in Centro have jumped in price.
Even the fixer-uppers in the historic center are rapidly disappearing.
Here Are Some High-Value Properties At Reasonable Prices
I found a rare, beachfront condo in the Sábalo Country neighborhood with 105 square meters (1,129 square feet) of living area and fantastic views of the beach and offshore islands. The condo has two bedrooms, two bathrooms, a large living/dining room, along with a Talavera tile kitchen. Sold furnished, the condo offers a private pool, beachfront palapas, onsite management, and 24-hour security. The asking price is US$199,000.
Overlooking both the beachfront and Centro Histórico, this condo has views of Mazatlán’s best features. With two bedrooms and two baths, this furnished unit has 100 square meters (1,075 square feet) of living area in addition to a swimming pool, an ocean-view terrace, and off-street private covered parking. The asking price has recently been reduced to US$150,000.
Also in Mazatlán’s Centro Histórico, there’s an attractive Spanish colonial house for sale, with 289 square meters (3,107 square feet) of space on a single floor, including three bedrooms, two and a half bathrooms, and a nice sized patio in the back. This 100-year-old house has 14-foot-high, open-beamed ceilings, large open spaces, and arched windows. The home has been updated with a modern kitchen along with water purification and pressurization. Located close to the popular Plaza Machado, the asking price for this property is US$204,900.
In a brand-new building on the North Beach of Mazatlán’s Centro Histórico peninsula, I found a spacious condo for sale, with 129 square meters (1,389 square feet) of living space and impressive views of about four miles of Mazatlán’s beachfront. With two bedrooms, two and a half bathrooms, and an amazing number of ocean-view, wall-to-wall windows, this corner unit has never been lived in and comes with one garage space. An easy walk to the Centro Histórico as well as several popular beaches, the asking price for this property is US$198,000.
This last listing is an awesome value, at the south end of the city’s best beach.
Here Are A Few Areas Of Caution That You Should Be Aware Of
First and foremost, some of these major renovations have been performed at the expense of street parking.
In Centro, the sidewalks are much wider, with elegant lamp posts and plenty of room to walk. But, as a result, some of the streets are narrower… there’s plenty of room for cars to pass, but in many places, less room for parking.
In the malecón district (to the north), the center-of-street parking has been eliminated on the oceanfront road in order to widen the boardwalk, leaving many beachfront businesses with no convenient parking.
So if you plan to own a car here, this puts an even greater premium on properties that have a garage. And, if you’re planning to open a business here, it puts a premium on a location that still has on-street parking nearby. (In many locations you won’t need a car… and, if you do, you can take Uber across the downtown for about US$1.50.)
Also, warnings issued by the U.S. State Department—even those for faraway areas—can affect properties throughout Mexico.
We’re Early In The Curve For This Cycle
Over the past few years, the market here in Mazatlán has been recovering. According to my personal observation, by 2015 the market had stopped its decline induced by its perception of drug violence. In 2016, there was a noticeable increase in the number of buyers. Now in 2017, the buyers really mean business.
No one saw this infrastructure windfall coming. And, to be honest, with 20/20 hindsight, the best time to buy was probably a year ago. But the second-best time to buy is now.
Lee Harrison