| | |  Puerto Vallarta Real Estate | June 2009 
Guanajuato Real Estate: Buy on Impulse or Rent and Have a Look Around! - Part 2
 Doug Bower - PVNN
Today's Guanajuato
The current economic downturn has not seemed to affect the draw of Guanajuato's historic charm. Tourists are coming in droves. Local Mexican friends have joked when seeing the constant flow of foreigners, "Where is the economic crisis?"
Though there are tourists coming to central Mexico to check out the capital city of Guanajuato, San Miguel de Allende, and Dolores Hidalgo, they seem to be spending less according to the local merchants. They are coming but not leaving with an abundance of artisans' pottery and other handicrafts.
Another thing they are not leaving Mexico with is the deed to a new home.
For decades, Americans and Canadians have chosen the Mexican Highlands as the spot to land in their search for a summer, winter, or anytime home. You don't have to look very far in the city of San Miguel de Allende to find Gringos with an all-too-familiar story: They come for a week's vacation, and in some cases for a weekend, and leave with a new Mexican home. Impulse buying of real estate in the State of Guanajuato is not a rare or unheard-of event. It has happened - a lot! But not so much anymore in today's volatile economy.
In an interview with Carlos F. Acuña, who is with Atenea Realty in San Miguel de Allende, I learned that potential real estate buyers are so frightened in this economic downturn that local sales are off by 75%.
"Definitely, there has been a drop in sales and construction by approximately 75% since the economic downturn. People are still scared and want to make sure that the economic crisis has hit bottom before they start investing again."
Having said that, Acuña went on to add: "I anticipate a recovery starting next year. Once this recovery begins, I anticipate a boom in the SMA real estate market."
"In order to stay afloat," says Acuña, "prices have dropped by about 20%, and properties that were way above market price have dropped by even more. Prices have become very negotiable as long as sellers are still making a profit."
You've got to wonder if buyers get into trouble and to what degree when they come for a week's vacation and buy a house on impulse. Carlos Acuña told me about the biggest mistake Gringos generally make when buying homes in Guanajuato:
"In buying or building houses in SMA is that they do not make a research or investigate who are the best and most professional realtors and builders (such as architects and engineers) in order to avoid any kinds of problems."
This is one of the most important reasons we encourage readers who are thinking of moving to any region of Mexico to Rent First - and then think about Buying.
I know of a lady who bought first in Guanajuato without a thought of culture or building restrictions. Consequently, she is not living in the house she bought and remodeled without having the proper permits or adhering to building codes. As a result, she got turned in to the local authorities that have put a "stop work" order on her home. To this day, I have no clue of her whereabouts.
There are so many factors to consider before plunking down money for a house - so many Reality Checks! Renting first gives you time to see if you will be able to cope with what Guanajuato has to throw in you path.
As charming, as delightful, and as enchanting as Guanajuato is, there are peccadilloes with which I am convinced every American expat will have to contend. I know we did. Those whom we have interviewed have told us the following also were wake-up calls for them.
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