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Mexican has representation at NAR -
San Diego, November 2009
By Harriet Cochran Murrray • Cochran Real Estate - December 2009

Recently a group of local realtors in Ampi* attended the NAR or National Association of Realtors convention in San Diego, California. This meeting gave us the opportunity to meet and talk to realtors in the rest of North America. While the NAR is USA based, there is always a large international presence of Canadian and Mexican realtors.

This year we were told that attendance was down from 35,000 participants to 19,000 and the number of vendors offering real-estate related products had 400 booths instead of a normal 800. These figures meant at least a 50% decrease in participation in the single largest real estate event for professionals in the United States.

We realized while at the convention that all of us as real estate professionals are dealing with different fall-out from global, and particularly, North American economic problems. Our agents to the north are dealing with their distressed markets using tools such as refinancing, short sales, and government credits up to $8,000USD. Absorption of the lesser priced homes and condos is proceeding at a healthy rate with the help of all these methods to reduce supply.

All agents, once meeting us and realizing we were from Mexico, asked us how safe it was “back home.”  Fear of health and safety, made it difficult for the agents to even care if we have good news about great values for sale in our market.   The amount of misinformation spread in the media coverage about Mexico, seemed to be the only information the average agent in the conference had in his memory bank.  These agents certainly have been busy with their own problems, and another country’s problems are not a priority to them at this moment.

Until we can overcome the fear of going to Mexico, USA and Canadian agents will not be interested in talking about our real estate market.  They will not appreciate our property prices are not volatile.  They will not care we do not have highly leveraged mortgages with borrowers paying little or no down payments. Our 10% appreciation each year for the past 10 years, with 20% in 2004 and 2005, doesn’t mean anything when fear of the swine flu or drug wars and murder is in one’s head. 

For the time being, our prices are not going up, and they are closer to 2006-2007 levels. For many years sellers enjoyed a healthy equity appreciation. But even at prices rolled back two or three years, the appreciation before 2005 for more than 10 years straight was extraordinary.  Now, we can offer these rolled-back prices in our resales of condos and homes. 

Some builders are offering strong incentives of free upgrades, appliance packages, and they have waived condo fees for the first two years. Some individual sellers have lowered their prices by 30% and some take back owner financing.  All these steps taken by sellers are normal reactions to an oversupply of product when there is less demand.  Puerto Vallarta to Punta Mita properties have not experienced deep swings in prices from high to low as some parts of the USA have experienced.

Our strength in stable Mexican real estate prices may be perceived as a weakness. An investor coming in and expecting to find a 40-60% discounted market will be disappointed. He will have to go back to more cyclical markets in the US which are driven by highly leveraged mortgages for investors who can walk away if the market does not please them.
 
While at the NAR convention, we continued to learn new marketing techniques, compare multiple listing services, and attend lectures on the psychology of handling stress in a down market. 

One of our conclusions as a group when the convention was over was that we need to go back next year with a large booth stocked with valid facts, property profiles and a large map of Mexico. We need to staff our booth with agents who can explain person to person what is happening in our Mexican market.

Harriet C. Murray
E-mail: harriet@casasandvillas.com.

*Asociacion Mexicana de Profesionales Inmobiliarios”

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