Every week our office receives two or three phone calls from U.S. investors looking for Baja real estate opportunities that are on the upside of the value curve. The press is full of reports that Western United States property values have reached their peak. The following is my advice to these folks:
ROSARITO - Property appreciation is still holding strong but not doubling every year as it has in the past three to four years. “Price doubling” escalation has been driven by condo speculators who buy multiple units before construction has even begun. They have been successfully betting that values will double or triple at construction completion.
Many retirees have been priced out of the Rosarito market. And realtors are concerned that the 2,700 new condos, coming on line this fall, could saturate Rosarito’s real estate inventory. Also, baby Boomers have become somewhat disenchanted with the drug trafficker spill over from Tijuana: three policemen were found decapitated recently in the trunk of a car in Rosarito. In addition, the “wild party” scene has motivated many buyers to travel further South to Ensenada, a more family oriented community.
SAN FELIPE – You better buy today because prices are escalating on a monthly basis. I purchased a desert lot, with a mile away ocean view, in April of this year. By May, comparable lots were double what I paid. I assisted a client in buying a beach front lot six years ago for $50,000.00; a neighboring lot is now selling for $500,000.00. A tenfold increase in value and almost all the increased appreciation occurred in the last three years.
ENSENADA – The largest county, measured in square miles, in the world. Ensenada’s Northern border is just below Rosarito and continues 400 miles southerly until the state line with Baja Sur at Ojos Negros. Ensenada is 120 miles wide, from the Pacific to just below San Felipe on the Sea of Cortez. Ensenada includes: San Felipe’s Southern beaches, San Quintin, El Rosario, Valle de Guadalupe (wine country) Gonzaga Bay, Bahia de Los Angeles and dozens of smaller desert communities.
Its size, differing: climates, topography, flora and fauna, presents multiple and distinct real estate markets. The Southern beaches from San Felipe to Puertecitos are mostly within the County of Ensenada and the anticipated growth/appreciation favors this zone. On the Pacific side, I like Bajamar with its world class ocean side golf course (Pebble Beach 50 years ago) and reasonably priced homes in a beautifully planned subdivision.
You can still buy a golf course home with an ocean view in the four hundred thousand ranges. Bajamar also has a new developer with deep enough pockets to buy the media promotion necessary to unveil this well kept Baja real estate secret. I expect values to appreciate measurably by year end. Below Bajamar are developments like Ventana al Mar, Saldamando and Sal Si Puedes. Presales are pricey but when you see the location, views and the planned infrastructure you can bet the upside should be substantial
Ensenada DowntownDowntown Ensenada is experiencing a face lift and master planning done by U.S. planners who know their stuff. You can expect to see completed in the next five years: three new major highways relieving the traffic snarled transpeninsular highway, a continuation of the boardwalk from downtown - ten miles to the South, and ending at what is now the airport. The airport will be moved to Ojos Negros and the existing airport and military base, a half mile square, bordering on beautiful, presently military only, beaches will be turned into a park, complete with zoo and aquarium. The beaches, beginning just south of downtown, are planned for high rise condominiums ala Miami Beach.
Smart investors are already driving price increases in Ensenada’s beautiful wine country. The upscale equestrian and wine making model of Napa Sonoma is being duplicated here in Guadalupe Valley. Upscale horse and wine Bed and Breakfast like El Adobe and Las Brisas del Valle ore luring other interested hotel operators. Hugo De Acosta, as chief winemaker for Bodegas Santo Tomas, took their wines to international prominence in tasting competition around the world. Hugo has started a wine making school in the valley that is attracting aficionados from throughout Europe and the Americas.
The culinary school started by Guadalupe wine maker L.A. Cetto is a nod to Sonoma’s Sebastiani who enhanced his wine making image by forming an outstanding school for the culinary arts. The importance of the food and wine industry to Baja California has motivated the State University to begin a college degree program in the food and or wine industry beginning next year in the Guadalupe Valley.
Investors predict Ensenada will experience a Rosarito-San Felipe type boom in five years. A lot of excitement is expected to be generated by the legalizing of lands that were taken in the Punta Banda fiasco. The city is preparing the paperwork necessary to enforce the will of the court in providing legal lots that were developed without the necessary permits. Serious buyers are vying for the 300 room Hotel and tennis resort that was abandoned in the year 2000.
It is no longer a question of should I buy something in Baja as an investment. The question is, how fast can you move before prices double and triple in the next couple of years. That is the upside potential of Baja that you will not see in the next few years in the Western United States.
Just remember, title anomalies are common in Baja, so title insurance is a must.