Is The Rising Real Estate Market Pushing You Out Of Lake Chapala?
Prices are rising. Yes, and this can be said for everywhere in the world including our beloved Lake Chapala area. So, are you being pushed out of the market before you even get a chance to move down here to retire? Let's check out some facts and figures and do a little mental work to see where you stand.
I'll admit, It was difficult to wade through the web to get an accurate estimate of the average home sale price in the U.S as most websites disagree and use different information. Estimates for 2020 vary from $329,000 to $391,000, with the current 'year to date' estimates in 2023 being $410,000 to $430,000. This would put the average increase in the neighborhood of 25-31%.
I found another article stating that according to Zillow, The national average home price in the U.S. climbed 29% since the COVID-19 pandemic began in 2020. This article was updated in April of this year, so still early times, but shows we're on the right track.
The Average house price in Canada is $650,000 Cdn ($477,000 USD) ; with another article stating $750,100 indicating a 31% increase, so as expected, very similar to the U.S. housing market. As a Canadian myself, I also find it interesting that the average house price in Canada (where you think things would be cheaper) are actually $47-67,000 more than in the U.S!
According to our Lake Chapala MLS archive system, which contains only some of the numerous sales Lakeside, I've calculated an increase of 28% year to date from the average 2020 home sale price. Average sales price of homes sold in Lake Chapala is now $338,000, which is still over a $100,000 less than in the U.S.
So, not surprisingly, all things actually look pretty equal and you have nothing to worry about. With the amount of money you are making with selling your home in the U.S or Canada, you have the equity to purchase in Lake Chapala (and then some) because remember that even though the price percentage increase has been similar, your actual dollar value is much greater due to the much lower cost of housing in Lake Chapala.
So what I find is really holding people back, is the perception that Mexican Real Estate is cheap (or should be cheaper just because it is in Mexico). This perception (idea, thought) gets people in trouble, as they don't value the homes as they should. Once Portugal (another popular retirement counrty) was cheap too...but no longer. Why should Mexico be any different than any other country in the world. It, too, is affected by market forces.
Another incorrect assumption is that it is us gringos that drive up the market. Nothing could be further from the truth. Think about it. If Expat purchasers make up 20% of the market...then we can only influence the market by 20%. So as a proportion of the whole market, we are still a small effect in the rise of prices. Market forces, and the countries own economy are resulting in the strong demand from Mexican buyers.
Remember, too, how the dollar has been dropping due to both the weakness of the dollar and also because of a stronger peso? All these market forces have had bearing on home values and their increase in Mexico and Lake Chapala.
So, are rising prices in Lake Chapala making it unaffordable to you to live here? Based on the above valuations, I've shown that you've made more money on your property up north since the beginning of 2020 and that the overall dollars in your pocket more than make up for the equal percentage rise that has occurred here in Lake Chapala.
Need more incentive? Your cost of living is still 40-50% lower once you are a homeowner in Lake Chapala, so financially you will be saving more each and every month through your retirement years. Moving to Lake Chapala just makes good economic sense!
Michaela & Ricardo are your FULL SERVICE Real Estate Agents. Along with our Retirement Seminars, our over 20 years of combined experience Lakeside, and our network of area Professionals, we help guide you to from beginning to forever in your Retirement Journey to Lake Chapala, Mexico.