The Strength of the DOLLAR makes this the BEST time to Build that Dream Home in Mexico!
For over the years between 2003 and most of 2008, the US Dollar and the Mexican Peso enjoyed a stable exchange rate between 10.0 and 11.0 pesos per dollar. Sometime in December 2008, the exchange rate, based on several economic factors including the worldwide crisis, dramatically changed with the dollar slipping to 9.0 pesos per dollar, only to rise to a record 15.20 pesos per dollar in a very short period in 2008 and 2009. The exchange rate now has experienced a fast climb due to the strong dollar again and the oil imbalance in Mexico. The current rate of exchange had risen to a record 21:1 around the beginning of the year, and now in October 2017, it is about 18.7:1.
Construction starts in 2017 are now on the rise and have been for about a couple years now with dozens of new hotels and new housing projects having been completed or commencing. A welcome contrast to the affect the economic recession in the U.S. which began to affect our market in the first quarter of 2008. Pre-2008, Los Cabos had a once ZERO (actually, it was a negative back in 2007) unemployment rate for years. After the worldwide crisis, however, this dramatically changed to a high unemployment rate in Los Cabos. But now, in 2017, unemployment is once again approaching a low single digit rate.
Competition for workers is on the rise again, but there is still an opportunity for low priced bids. The crews working the new hotels and the new developer projects are many times brought here from the mainland for these specific projects or need to be vetted and indoctrinated into the developers programs, which also includes paying the workers at below market rates here in Los Cabos. This leaves many independent contractors from Los Cabos still looking for work. So you still have an opportunity to get lower bids. (A little word on labor prices in Los Cabos. Los Cabos is a more expensive place to live than the mainland. (One of the reasons the big developers pay for workers to come here for their jobs- they still pay mainland labor rates!) But for resident workers from Los Cabos, costs are higher for food, rent, transportation, child care, utilities, etc. So, as a result, workers here get paid more than they do on the mainland. However, in comparison to the labor costs of the United States and Canada, it is still a bargain here on the peninsula!)
Material supply houses, contractors, architects and engineers are also part of the equation for potential bargains on materials and their services. Add to the equation the many lots that now being price adjusted downward or that have already been adjusted downward after the worldwide crisis, it is a homebuilder´s market NOW!
In 2017, the new starts of condominium projects and hotels potentially marks the beginning of the close of this window, so don’t wait too long.
Land prices are at an all-time low, as well.
Want to build your dream home in paradise? Now is the time!
By Cheryl T. Miller, Broker of Baja Realty and Investment, Architect, 624-122-2690, firstname.lastname@example.org, www.forsaleinbaja.com.