How much is my Mexico home worth?
5800 miles of coastline. An inland spine of striking mountains. World-class cultural appeal. It’s no surprise that Mexico has long been a haven for expats and visitors seeking a fresh lifestyle and aesthetic. Despite a consistent stream of newcomers from its northern neighbors, Canada and the United States, and its status as a magnet for other international travelers, real estate has stayed accessible and affordable in line with Mexico’s relatively low cost of living. That being said, in a country with few real estate regulations and an array of desirable locations, determining the right price as a buyer or seller for a home in Mexico can be challenging. Here are some factors to guide you when valuing property in Mexico, whether you’re looking to invest, sell, or make a long-term move.
How do I estimate the value of my home in Mexico?
Whether buying or selling your Mexico home, it’s crucial that you get an accurate sense of home values in your location of interest. These values, combined with a consideration of a home’s age, amenities, and square footage, set the baseline for your own home valuation. Determining proper baselines, however, can be an issue when evaluating properties in Mexico, where the official MLS networks are disjointed and not yet to the level of sophistication seen in the US.
In a mostly unregulated real estate landscape it can be hard to pin down a reliable source for real estate value; and some databases can be inaccurate in their communication of price and features of each property. However, tech-forward real estate companies like Far Homes offer pricing insights through their databases of property listings in Mexico. This is a great place to find comparable properties or “comps” to help estimate your home value.
Current Market Trends in Mexican Real Estate
Macroeconomic trends always play a factor in the value of real estate. If the economy is strong globally, and in Mexico, this will affect the price of real estate broadly.
As of 2022, Mexico currently finds itself in a position of economic strength. After a sharp downturn amidst the pandemic, the real estate market has rebounded over the last two years as the economy has stabilized. Thanks to a recent influx of expats and a growing middle class, most experts expect this consistent year-over-year growth to continue but there’s still a large amount of inventory in Mexico, especially with new units being built, making it a strong buyer’s market.
Location is (almost) everything
Predictably, location is the most crucial factor in determining real estate value for property in Mexico. Mexico is an incredibly diverse place, with plenty of areas where people want to invest their time and resources, but the up and coming ones tend to be concentrated around the major cities and coastal retreats. Not surprisingly, Mexico’s most expensive places for real estate are near the natural wonders and vibrant cities throughout the country.
Luxury isn’t always about what you own, but rather what you have access to. This has never been truer than in many Mexican residential complexes, where the accessible services and features upgrade the standard of living. Within a condo or apartment, creative layouts favor bigger kitchens and surprising sleeping spaces that make a property more user-friendly and attractive. Private outdoor areas and access to secluded gardens are also important selling points that offer value beyond the square footage.
Construction Quality in Mexico
Of course, a lack of amenities and modern touches can negatively affect housing values. Building codes are hardly uniform in Mexico, so less up-to-date properties could be greater liabilities than their older counterparts in more developed countries. Also, younger and retired populations usually expect a certain suite of features that past-their-prime properties are simply not equipped to provide. Factors like these must be considered when valuing a home in Mexico, even if it drops the value below what one might expect based purely on square footage.
Pools, Parking & Modern Conveniences
Outside of the living space itself, residential complexes are often home to services and facilities that find their way into the appraised value. Modern workout spaces and luxurious swimming, wading, and jacuzzi pools are common in contemporary developments. Other common areas, like terraces and gardens, also heighten residents’ quality of life. Even underappreciated conveniences–ample parking, for instance–create a more valuable living experience that is often reflected in a property’s sales price.
Wherever you’re considering a place to live, safety should always be part of the equation. It’s no different when considering the value of a home. Increased safety leads to higher values, and although Mexico is overall a safe place to live, there are always places where that is not the reality. Certain cities, like Guadalajara, that were once more tourist and expat friendly, now have a complicated relationship with the drug trade that can lead to outbreaks of violence. Even well known locations for jet setters, like Acapulco, have produced highly publicized cases of violent crime.
Despite these instances, most of Mexico, especially where foreigners and vacationers tend to congregate, experiences little of this violence. The Yucatan Peninsula and its seaside resorts, for instance, play host to millions of foreigners every year with barely an incident. Developed areas, like Mexico City, with a strong infrastructure and government presence, are just as safe as many large US cities. Sellers looking to offload property in these locales often find it possible to bake that extra level of safety into the final sales price.
Settling on the Right Price for Your Mexico Home
When buyers and sellers take all these factors into account, it can seem a little overwhelming. However, the journey to a correct valuation, especially for sellers, is worth the inconvenience. Pricing your home too high can scare off potential buyers who you’d be happy to do business with. Pricing your home too low is even more disastrous. Because it’s a buyer’s market, trying to price low for a bidding war will only leave you disappointed and those are basically non-existent in Mexico today. Oftentimes the bidding war sellers dream of simply never materializes, and they’re left with the disappointment of a lighter return on their investment.
Buyers, too, need to be aware of the market. In Mexico, folks tend to be looking for their slice of the good life at the right price. Overpaying for housing on the front end can lead to a less satisfying lifestyle in the long-run. That’s why it’s important to use trustworthy tools like the ones mentioned above to get the process of determining the value of your home in Mexico started off on the right foot.