Most everyone visiting or living in Lake Chapala has realized by now that there is a tremendous building boom going on. What brought this all about? Are the expats invading Lake Chapala in such numbers? Let's find out.
We started to see a building boom occur right at the start of 2017. This, interestingly, coincided with the inauguration of a new President in the U.S. At the same time, we also saw a huge decline in the number of residential properties on the market, going from 600 to 300, and inventory levels have remained low since. But who is buying up all this land and developing properties? Who are the buyers of these new homes and apartments?
You might be surprised to learn that is is not the expats from the U.S and Canada who are buyers, but rather Mexican Nationals, mainly from Guadalajara, Mexico's second largest city of approximately 6 million people. While the majority of the existing residential real estate was purchased by expats, it is the people from Guadalajara driving the market for new builds, and now, more recently, residential real estate in general. For example, in a regular development of 30 new homes you might see only 1 expat who has purchased.
Mexico's middle class has grown enormously in the past decade and Mexico's economy is doing extremely well. Along with the fact that Mexican people love to invest and hold real estate (verses putting money in the stock market), has resulted in a huge demand for weekend/second home/and investment properties.
Sales of lots (raw land), in particular, has increased tremendously and the buyers are almost exclusively Mexican. In fact, if I look at lot sales from 2014 thru 2016, I see 95 sales with an average price of $68,000 USD. Looking at 2021-2023 I see 331 sales with an average selling price of 110,000 USD. While not a 100% of sales are recorded on our MLS, it still provides us with a window of insight, showing that sales of land and lots have increased 3 1/2 times and increased in price by 65% in 7 years!! Days on the market has also greatly decreased from 330 to 230, alluding to strong demand. For those that got in early, this has been an excellent investment.
More than ever before, more homes are now being listed in pesos, attributing to the fact that it is the Mexican Nationals who have purchased so much of the property Lakeside in recent years. So often, people have asked me why there are so many homes listed in USD? Now I can safely say that that is not the case any longer. In fact, a current search shows 168 properties listed in pesos and only 155 properties listed in USD!
So, is Lake Chapala changing? Yes, it sure is, but it is not the expats that are changing the face of this small pueblita. It is, after all, Mexico!
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