peewee's lovechild
06-26-2008, 08:40 AM
Texas Real Estate Slump Lets Mexicans Take It Back
June 25 (Bloomberg) -- More than a century and a half after Mexico lost Texas to the U.S., Virgilio Garza wants a piece of it back.
A ``Texas for Sale'' sign and cowgirls in boots and white hats greeted Garza at the Convex center in Monterrey, Mexico, earlier this month. A Monterrey developer and investor, Garza was in search of foreclosed U.S. property to buy.
``Texas is like our home,'' said Garza, 45, who joined hundreds of Mexicans poring over lists of Texas properties at the four-day event. Garza, who owns manufacturing sites and other land in Mexico, said he and five partners may invest as much as $8 million in Texas. ``We believe there can be some opportunities.''
A rising peso and an economy growing faster than the U.S. have given some Mexicans the buying power to take advantage of the housing slump in Texas, which the U.S. annexed in 1845 after Texans gained independence from Mexico nine years earlier. A three-year war followed and ended with Mexico ceding about half its territory, including Arizona, Nevada and California, to the U.S. under an 1848 treaty.
The peso has gained 5.9 percent against the dollar since the beginning of the year. The Mexican currency today was little changed, slipping less than 1 centavo to 10.2952 pesos per dollar at 9:43 a.m. New York time. The economy, which rose 2.6 percent in the first quarter from a year ago, is expected to grow 2.6 percent this year, according to a central bank survey of 31 economists in May. The U.S. economy is forecast to grow 1.4 percent in 2008, according to a Bloomberg survey of 57 economists.
Marco Ramirez of McAllen, Texas, is among those trying to sell foreclosed Texas homes to Mexicans. Ramirez's company, called Now! Co., has bought 32 Texas properties and has options on 88 more. His best prospects are Mexican buyers, especially in Monterrey, 150 miles from the Texas border, he said.
`Great Time to Buy'
``Many of these people have children who are studying in the U.S.,'' Ramirez said. ``They've been renting or leasing and now it's a great time to buy.''
Mexico is better known for providing the U.S. with cheap labor than investment. The U.S. is home to an estimated 12 million Mexican-born residents, about half of them living there illegally, according to the Pew Hispanic Center in Washington.
Sales of existing U.S. homes in April fell 18 percent to an annual pace of 4.89 million from 5.93 million a year ago as banks shied away from making new loans, according to the National Association of Realtors in Washington.
Rising Foreclosures
The slump in demand pulled down the median price of an existing U.S. home in April to $202,300 from $219,900 a year ago, according to the association.
While Texas hasn't been hit as hard as California and Florida, where the housing boom drove up prices the most, existing home sales in Texas fell 12 percent from a year ago in the first quarter.
Foreclosures in Texas rose 29 percent in the first quarter from a year earlier, with one of every 274 households in the foreclosure process, according to RealtyTrac Inc., a seller of default data based in Irvine, California. The Texas foreclosure rate ranked 17th in the nation, according to RealtyTrac.
Garza and other Mexicans with money to invest believe the time is right to buy, Ramirez said. ``These are very sophisticated businessmen,'' he said. ``They realize what's going on in our country. Everybody needs cash right now and Monterrey has lots and lots of cash.''
Victor Gonzalez, 48, who owns a Monterrey print shop that employs 40 people, wants to use his savings to buy a $250,000 house in a gated community in the South Texas community of Mission.
`Ready to Go'
``This is exactly what we've been looking for,'' said Gonzalez, who was wearing a black Harley-Davidson T-shirt. ``We're ready to go.'' He said the price is $50,000 less than he expected he would have to pay.
Gonzalez said he plans to turn over the shop to his children in five years and retire to Mission, where the traffic is lighter and the crime rate lower.
The only requirement for foreigners purchasing residential and commercial property in the U.S. is a valid visa to enter the country, said Jose Cuellar, a realtor with Houston-based Cornerstone Mortgage Co. who caters to Mexican clients.
Raul Fabela, owner of McAllen, Texas-based Construction, Ltd., came to Monterrey looking to sell 42 rental properties of four apartments each, double his normal inventory of available properties. U.S. buyers have dried up, he said.
Mortgages Scarce
``We've had a slowdown since October,'' said Fabela, whose company builds rental properties and luxury homes priced at more than $1 million, said. ``I can't find mortgage companies that want to finance at 10, 15 percent down.''
He said 26 people filled out credit applications in Monterrey. ``It turned out a lot better than we thought.''
For Garza, the U.S. real estate slump has opened the door to diversifying his holdings. Garza's company, Grupo Vigia, owns five industrial parks and 600 hectares (1,483 acres) of land earmarked for housing development near Monterrey.
``We think there's opportunity to buy right now at reasonable prices,'' Garza said. ``We want to keep the properties two or three years until the market turns around and then begin to develop them.''
To contact the reporter on this story: Thomas Black in Monterrey, Mexico, at [email protected].
Last Updated: June 25, 2008 10:19 EDT
June 25 (Bloomberg) -- More than a century and a half after Mexico lost Texas to the U.S., Virgilio Garza wants a piece of it back.
A ``Texas for Sale'' sign and cowgirls in boots and white hats greeted Garza at the Convex center in Monterrey, Mexico, earlier this month. A Monterrey developer and investor, Garza was in search of foreclosed U.S. property to buy.
``Texas is like our home,'' said Garza, 45, who joined hundreds of Mexicans poring over lists of Texas properties at the four-day event. Garza, who owns manufacturing sites and other land in Mexico, said he and five partners may invest as much as $8 million in Texas. ``We believe there can be some opportunities.''
A rising peso and an economy growing faster than the U.S. have given some Mexicans the buying power to take advantage of the housing slump in Texas, which the U.S. annexed in 1845 after Texans gained independence from Mexico nine years earlier. A three-year war followed and ended with Mexico ceding about half its territory, including Arizona, Nevada and California, to the U.S. under an 1848 treaty.
The peso has gained 5.9 percent against the dollar since the beginning of the year. The Mexican currency today was little changed, slipping less than 1 centavo to 10.2952 pesos per dollar at 9:43 a.m. New York time. The economy, which rose 2.6 percent in the first quarter from a year ago, is expected to grow 2.6 percent this year, according to a central bank survey of 31 economists in May. The U.S. economy is forecast to grow 1.4 percent in 2008, according to a Bloomberg survey of 57 economists.
Marco Ramirez of McAllen, Texas, is among those trying to sell foreclosed Texas homes to Mexicans. Ramirez's company, called Now! Co., has bought 32 Texas properties and has options on 88 more. His best prospects are Mexican buyers, especially in Monterrey, 150 miles from the Texas border, he said.
`Great Time to Buy'
``Many of these people have children who are studying in the U.S.,'' Ramirez said. ``They've been renting or leasing and now it's a great time to buy.''
Mexico is better known for providing the U.S. with cheap labor than investment. The U.S. is home to an estimated 12 million Mexican-born residents, about half of them living there illegally, according to the Pew Hispanic Center in Washington.
Sales of existing U.S. homes in April fell 18 percent to an annual pace of 4.89 million from 5.93 million a year ago as banks shied away from making new loans, according to the National Association of Realtors in Washington.
Rising Foreclosures
The slump in demand pulled down the median price of an existing U.S. home in April to $202,300 from $219,900 a year ago, according to the association.
While Texas hasn't been hit as hard as California and Florida, where the housing boom drove up prices the most, existing home sales in Texas fell 12 percent from a year ago in the first quarter.
Foreclosures in Texas rose 29 percent in the first quarter from a year earlier, with one of every 274 households in the foreclosure process, according to RealtyTrac Inc., a seller of default data based in Irvine, California. The Texas foreclosure rate ranked 17th in the nation, according to RealtyTrac.
Garza and other Mexicans with money to invest believe the time is right to buy, Ramirez said. ``These are very sophisticated businessmen,'' he said. ``They realize what's going on in our country. Everybody needs cash right now and Monterrey has lots and lots of cash.''
Victor Gonzalez, 48, who owns a Monterrey print shop that employs 40 people, wants to use his savings to buy a $250,000 house in a gated community in the South Texas community of Mission.
`Ready to Go'
``This is exactly what we've been looking for,'' said Gonzalez, who was wearing a black Harley-Davidson T-shirt. ``We're ready to go.'' He said the price is $50,000 less than he expected he would have to pay.
Gonzalez said he plans to turn over the shop to his children in five years and retire to Mission, where the traffic is lighter and the crime rate lower.
The only requirement for foreigners purchasing residential and commercial property in the U.S. is a valid visa to enter the country, said Jose Cuellar, a realtor with Houston-based Cornerstone Mortgage Co. who caters to Mexican clients.
Raul Fabela, owner of McAllen, Texas-based Construction, Ltd., came to Monterrey looking to sell 42 rental properties of four apartments each, double his normal inventory of available properties. U.S. buyers have dried up, he said.
Mortgages Scarce
``We've had a slowdown since October,'' said Fabela, whose company builds rental properties and luxury homes priced at more than $1 million, said. ``I can't find mortgage companies that want to finance at 10, 15 percent down.''
He said 26 people filled out credit applications in Monterrey. ``It turned out a lot better than we thought.''
For Garza, the U.S. real estate slump has opened the door to diversifying his holdings. Garza's company, Grupo Vigia, owns five industrial parks and 600 hectares (1,483 acres) of land earmarked for housing development near Monterrey.
``We think there's opportunity to buy right now at reasonable prices,'' Garza said. ``We want to keep the properties two or three years until the market turns around and then begin to develop them.''
To contact the reporter on this story: Thomas Black in Monterrey, Mexico, at [email protected].
Last Updated: June 25, 2008 10:19 EDT