By Theresa Bradley, Associated Press Writers

Mexican Housing Markets Boom, Leads Latin America Despite Crisis in United States

MEXICO CITY (AP) — In her bustling corner real estate brokerage, Ana Laura Pulido is doing her best business in years, enjoying a sort of Mexican immunity from the U.S. housing crash.
“It’s a time of hope,” said Pulido, who has sold hundreds of homes to middle-income families since 1992. “The buyer today is more aware. People buy with more ease, they can plan long-term.”

Long thrashed by swings in the U.S. economy, Mexico now boasts a thriving housing sector whose record growth leads Latin America — a sign of increased economic stability and an outlet for investors looking to escape the U.S. downturn.

Giants including the California Public Employees Retirement System, the largest U.S. public pension fund, are already bankrolling projects in Mexico, where they see “more bang for the buck,” said Clark McKinley, spokesman for CalPERS, which has invested more than $300 million in Mexican real estate funds.

The trend could even slow emigration from Mexico, by generating millions in jobs and personal savings as a fresh supply of loans gives many their first chance to own a house.

President Felipe Calderon has set a national goal of a million new mortgages a year by 2010. On Monday, he unveils a set of measures to ensure growth continues, with plans to boost Mexico’s small resale market and combat the urban sprawl that has begun to carpet valleys with hundreds of thousands of matchbox rowhomes.

Behind the boom are six years of economic growth and stability, and a national shortage of 6 million dwellings. While interest rates are falling, just 6 percent of Mexico’s 25.7 million homes are financed with mortgages — compared to about 67 percent in the U.S. Most Mexicans still inherit their homes, buy them with cash, or build them by hand.

That pent-up mortgage demand in a nation of 108 million means lenders can be choosy, enforcing strict standards that held delinquency rates below 4 percent in third quarter-2007, compared to 5.6 percent in the U.S.

“Mexico is in the early stages of expansion,” said Juan P. De Mollein, managing director for Latin American structured finance at Standard & Poor’s. “There are still plenty of points for evolution because there’s still plenty of demand.”

In the U.S., lenders looking to expand their portfolios granted risky mortgages to borrowers with weak credit, but in Mexico, that “subprime” category doesn’t exist, because lenders don’t need it to grow. Also, few Mexicans flip homes or refinance mortgages, keeping the market more stable.

“Mexico doesn’t have a credit issue. We can still choose our borrowers because demand is so great,” said Mark Zaltzman, chief financial officer at Su Casita, one of Mexico’s largest mortgage lenders.

A recession north of the border could choke U.S. investment in Mexico, curbing job creation, discouraging new homebuyers and stalling housing growth.

But that won’t likely lead to mass layoffs and defaults, said Rafael Amiel, managing director for Latin America at the financial consultancy Global Insight. Mexico simply has too much room to grow, and expanding local markets have insulated it somewhat from U.S. downturns.

Housing demand could swell more as migrants are pushed home by the souring U.S. economy and crackdown on illegal immigration — generating four new jobs for every home raised, said Carlos Gutierrez, Mexico’s housing policy director.

All this represents a major change from 1994, when Mexico devalued the peso, sending inflation and interest rates soaring, forcing homeowners into default and pushing banks to the brink of collapse. Credit was so tight that most Mexicans paid cash upfront or constructed their own homes, often adding one room at a time.

Since then, Mexico has seen a housing recovery built on a mix of government initiatives, private investment and a winning gamble by a new group of entrepreneurs who took a local approach to mortgage lending, using knowledge of family and neighborhood connections to make sure loans got paid.

Rather than build public housing, the government restructured mortgage-lending laws, setting stricter credit guidelines, standardizing appraisals and urging lenders to raise cash on financial markets. It also overhauled Infonavit, a public agency that grants more than half Mexico’s mortgages, funded by a 5 percent payroll tax. Some 20,000 jobs were outsourced as the agency more than doubled new loans to 458,700 in 2007, director Victor Borras said.

And when commercial banks ran for the border, a new kind of lender stepped in, known as “sofoles,” for the Spanish acronym for “limited financial association.”

Taking advantage of Mexico’s tight family ties and government credits, these nonbank mortgage lenders set up neighborhood offices, requiring relatives to co-sign loans and collecting late payments door-to-door, proving profits could be made.

Banks have since returned, and blossoming competition drove average 15-year mortgage rates to 12.5 percent in November — a deal in Mexico, where rates topped 65 percent in 1995. Construction is booming too, as just 30 percent of new homes were self-built by their owners last year, down from 50 percent in 2004, Gutierrez said.

While big banks target higher-income borrowers, sofoles are pioneering mortgages for street vendors and taxi drivers, who work in the huge informal economy without documented salary or credit histories. Sofoles study spending habits to establish their income, offering trial payment periods to prove borrowers can afford payments on entry-level homes that range from $17,000 to $37,000.

Another huge potential market is the estimated 11 million Mexicans in the U.S., who can now buy “cross-border” mortgages to pay off homes in Mexico, increasing their control over the earnings they send relatives and cutting the time they need to work in the U.S. to build a future back home.

Even as home lending soars, overall debt remains low, making a Mexican credit bubble unlikely. Major mortgage insurers, including U.S.-based AIG United Guaranty and Genworth Financial, now back Mexican loans, slashing risk and making it easier for lenders to bundle and sell debt to investors as mortgage-backed securities — raising capital to grant yet more loans.

Nearly $5.8 billion of these securities have been sold since 2003, offering investors an alternative to tumbling U.S. markets and giving Mexico’s nascent pension funds, which have relied on lower-yielding government bonds, a place to store assets long-term.

Mexico’s housing sector is still full of risks, including land ownership disputes, infrastructure delays and limited access to water. The emphasis on private building has concentrated developments in wealthier states, while masses of poorer people still live on dirt floors.

Even so, millions of first-time homebuyers now have an asset to leave their children, or to use as collateral to finance future spending, fueling growth.

“I always had in my head that the only thing you can give your kids as inheritance is an education and a house,” said Antonia Correa. The 37-year-old receptionist paid $7,200 down on a three-bedroom stucco townhouse in a sprawling new development in Cuautitlan, outside Mexico City.

“You could be short on things,” she said. “But a roof is the best. It’s your world, your home.”

(Original at: http://biz.yahoo.com/ap/080120/mexico_housing.html)

Posted on January 29th, 2008 by Tropicasa
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by Maria Cortes Gonzalez – Sun-News (from banderasnews.com) 

The arrival of 2008 means it’s time to take a look at what’s new and what’s old. Aside from following fashion trends, homeowners may not want to get caught with outdated colors in the walls and wallpaper of their homes.

Of course, don’t be surprised to find that some trends — such as wallpaper that pays tribute to a vintage style — seem retro. Just the same, home industry insiders say that homeowners should expect to see more “green” in 2008, as in more interest in being environment-friendly.

Here’s a quick look at some of the trends that will be ringing in this year, according to national and local experts.

Aside from being a popular term for environmentally friendly
green will continue to be a popular wall color in 2008, experts say.

Eco-friendly

With energy prices being a concern, more homeowners are thinking about making “green” choices to save money.

Home Depot officials, for example, report that more homeowners made decisions to choose appliances that were energy efficient. The chain saw a 30-percent increase in sales of Energy Star appliances in 2006.

Choosing energy-efficient appliances is a win-win situation in many ways, experts say.

Homeowners may save hundreds of dollars in utility bills and conserve natural resources. Some banks, like JP Morgan Chase and Citigroup also are offering “energy-efficient” mortgages for homeowners doing green renovations.

Flooring solutions

“Tile seems to be getting bigger, as far as size,” said Barbara Malooly, a sales manager at Malooly’s Flooring Company, 765 N. Valley Dr.

“And people are using more natural stone, such as travertine and slate. They’re doing a lot of different designs on walls, pebbles and glass tiles, even metals.”

Malooly said people are using the natural stone in showers, even tiling entire walls in bathrooms, “to give it a spa look.”

Another trend is tiling arched ceilings in a hallway for a Tuscan look.

Because more and more tile is being made in China, Malooly said, tile prices are coming down making them competitive with Mexican tile prices.

Wood flooring will continue to be among the most popular flooring choices this year, said Lupe Villalva, co-owner of Floor Solutions in El Paso.

“Even though laminates are becoming better every year, there is better pricing on wood. So it’s more affordable,” she said.

Villalva said the darker woods are more appealing than lighter tones.

Something exciting to look forward to is a tile that has a pebbled look and feel to it, experts said.

“You can use it inside or outside. It gives a spa feel and the sheets of tile come with pebbles in different colors,” she said. “The texture is really cool.”

Designers say homeowners will be mixing vintage-looking
pieces with new pieces in their interiors.

Color scheme

Homeowners have been hearing the word “green,” in reference to more interest in being environment friendly. And so, it should surprise few that green will be a popular wall color in 2008.

Martha Medrano, an interior designer at Charlotte’s in El Paso, said homeowners will be interested in green, whether it’s in wall color or upholstery and other furnishings.

Plus, green appeals to all age groups, she said.

“Chartreuse is real popular with teen-agers, lime green with the younger set. And dark greens are great for reading rooms, master bedrooms and bathrooms,” she said.

Medrano said the greens evoke a soothing, homey feeling.

Mix and match

If you’ve been caught up in making sure everything blends together, it’s time to mix it up in 2008.

Davis Remignanti, lead design consultant at furniture.com says homeowners will be bringing some vintage into their lives.

“Vintage pieces bring a unique energy to a room’s decor. Sometimes it can be hard to tell which pieces are old and which are new,” he said in a statement.

When it comes to designing furniture, manufacturers also will be returning to smaller pieces instead of oversized furniture.

Another trend will be a revival of Baroque-style furniture and various technique including carving and decorative finishes.

Remignanti reminds homeowners that when it comes to designing a room, functionality is important.

“However well put together a room may be, it’s meant to be used. If a room isn’t comfortable and inviting for those inside it, it’s a design failure, no matter how stylish it may be,” he said.

More Americans will be purchasing energy-saving appliances such as this front-loading dryer.
This style can save as much as $110 on utility bills, Home Depot experts say. 

Backyards with bling

For several years, homeowners have been putting money into their backyards, creating unique retreats with amenities including outdoor kitchens and spas.

In 2008, homeowners will continue their passion for the outdoors, said Ann Mack, a trend spotter.

Basic pools will be transformed into tropical oases and outdoor kitchens will rival their indoor counterparts.

Las Cruces Sun-News features editor Richard Coltharp contributed to this article.

Maria Cortés González writes for the El Paso Times, a member of the Texas-New Mexico Newspapers Partnership. She can be reached at mcortes(at)elpasotimes.com.

Posted on January 17th, 2008 by Tropicasa
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By: R.C. Walker – Grupo Ecològico, (Original article in banderasnews.com)
On January 1, 2008 the state law requiring separation of garbage at all levels of the community entered into effect in Puerto Vallarta. Grupo Ecològico de Puerto Vallarta, A.C. hopes that this law will prove to be a major step to encourage recycling in our community. This can be your New Year’s resolution for the ecology in 2008.The law requires that garbage be separated and reduced in the home, office and business. Separation, initially, will include that of organic and inorganic.We are providing a translation into English of various of the articles of this law which we think are the most important. There is also information on how to obtain a complete copy of the law.You can find these translated articles at the Grupo Ecològico website: GrupoEcologico.com . The website also has a format of a Denuncia Popular (also translated into English) which will assist in making a denunciation as mentioned in Article 92 of the law.The experience of recycling anywhere in the world has proven that only with a high degree of community participation can a recycling program be entirely effective. We invite you to become familiar with the new law and to practice it in your home, condominium or business.

Posted on January 9th, 2008 by Tropicasa
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