Puerto Vallarta South Shoreline

By: Jim Scherrer

Thanks in part to the tech and housing bubbles, Americans have experienced an unusually strong growth in net worth during the past 15 years, The graph below depicts a typical stock market portfolio value growth of more than 200% during the first five years of this period followed by the bursting of the tech bubble and then returning to more than 200% followed by the bursting of the housing bubble and finally recovering to nearly a 150% gain.

SPY 15 years

The combination of stock portfolio growth, housing value appreciation, easy credit, and refinancing capabilities put most Americans of the Pre-Boomer and Boomer generations in a financially comfortable position and an optimistic mood for most of the past decade.

Having confidence in the economy and the feeling of financial strength, many of these about to retire people started planning for retirement and the thought of a second home on the beach or Sierra Madre hillside in sunny and beautiful Puerto Vallarta, Mexico seemed like a very logical and affordable plan.

In 2000, representing the Alliance for Change and the Mexican National Action Party (PAN), Vicente Fox, and then six years later, Felipe Calderon (both Harvard graduates), promoted strong foreign investment philosophies thereby creating an environment conducive to capital expenditures in Mexico.

With the retiring North Americans shopping for a beautiful place to retire and the Mexican government inviting them with open arms, conditions were ideal to ignite a ten year housing boom. Consequently, from 2000 to 2008, the demand for condos seemed to be insatiable and developers from all over Mexico, the US and Canada, and even Europe raced to Vallarta in order to cash in on the land rush.

The developers started buying up all of the remaining beachfront property and the available prime hillside lots and soon thereafter, they started planning their developments. By 2001-2002, construction of the first projects was underway. It seemed as though the supply just couldn't keep up with the demand as many of the projects were at least 30% sold out prior to breaking ground and were completely sold out well before the project was finished.

Due to the success of these initial projects, the developers immediately started planning future, substantially larger projects. By 2006, there were more than 100 developments (many mega-projects) in the planning stage and pre-construction sales were well underway. Many were multi-tower or multi-building complexes with hundreds of condos that were to be constructed in phases.

As soon as the design of a new project had been completed and attractive conceptual drawings had been prepared, the developers would set up a trailer or perhaps an office in one of their completed projects and start their pre-construction sales activities. Of course, the first "invitees" allowed to take advantage of the pre-pre-construction prices (slightly above the cost of construction) were those that had previously bought in one of the developer's completed projects. Immediately thereafter, the general public was offered pre-construction pricing and construction began.

It was not uncommon to sell at least 30% of the first phase of a project prior to breaking ground with many of these buyers being speculators having no intentions of ever taking possession of their units. After all, they had witnessed a 15% annual appreciation in condo values during the prior five years and realizing the project would take perhaps three years to complete, they could plan on "flipping" their unit upon completion of the project for a 50% gain. There seemed to be no risk of non-completion and the investment appeared to be a no-brainer!

There were hundreds, perhaps more than a thousand condos bought by speculators between 2006 and 2008; most of which have been completed however some, unfortunately, may never be completed. Most of the purchases in Mexico are all cash and therefore very few properties were mortgaged; those that were, were done so with a minimum of 20% down. A typical payment plan was 10% down and 30% every six months with a two year payment and construction schedule. By the time the first phase of many of these projects had been completed, the developer's list prices had increased by as much as 30% over the pre-construction prices representing a handsome profit to the developer.

As luck would have it, things didn't work out as planned for the developers or the speculators! With the global recession starting early in 2008 followed by the swine flu scare and then the Mexican border town drug cartel war, real estate sales in all of the fine Mexican resort destinations came to a virtual standstill. With the housing slump in full force, prices no longer continued to appreciate; in fact they began to weaken. By 2010, with thousands of new condos on the market (the supply now greatly exceeding the demand), many projects were put on hold postponing the future phases, a few projects were even abandoned with the first phase only partially finished, and new projects in the planning stage were shelved.

In order for the developers to sell off their remaining inventory of condos, they are now forced to reduce their prices; some have dropped them to pre-construction levels or just slightly above their cost of construction. The speculators that had assumed the pre-construction risks have now paid in full and have received their completed condos; in order for them to sell their units, they are now competing with the developers who are also trying to unload their inventories.

The above scenario seems to paint a pretty dark cloud for the speculators and therefore you might ask, where's the silver lining? Well, for one thing, it's quite clear that we've reached a bottom when the developers are just trying to recoup their expenses. Also, because so few speculators have mortgages, there are virtually no foreclosures and for the most part, they are not financially forced to sell. Consequently, neither the developers nor the speculators are going to sell at a loss and prices appear to have bottomed at 2006-2007 levels or 30-40% off their highs of 2008. At these price levels and without the risk of non-completion, the savvy investors and retiring Boomers are slowly absorbing the inventory of new condos in Vallarta.

The other silver lining can be found if you consider what those speculators could have done with their cash in January 2007 if they had not invested it in a Mexican resort condo that has gained them nothing during the past three years. By reviewing the graph below, you'll see that if they had invested their money in an S&P 500 stock portfolio, they would have lost about 23% during the same period of time. Alternatively, they could have bought a condo in Florida, California, Arizona, or Nevada where foreclosures are abundant and lost as much or more. Most speculators have a tough time accepting things in this light but it's a fact of life; by breaking even, they're better off than they would have been otherwise! 

SPY 3 years

Finally, what does this mean to us? Well, it's a buyer's market in PV that we've never before witnessed and will probably not see again in the future. There are currently hundreds, if not thousands of incredible finished condos available on the market at rock bottom prices. For those about to retire that still have some cash and are interested in a second residence where the winter weather is perfect, the scenery majestic, and the fun galore, it would be foolish not to at least consider the favorable circumstances that currently exist south of the border. Not only do they provide a silver lining for the speculators, but more importantly, they represent a golden opportunity for the real estate buyers in Puerto Vallarta, Mexico.

Jim Scherrer has owned property in Puerto Vallarta, Mexico for 26 years and resided there for the past twelve years. The mission of his series of more than 70 articles pertaining to retirement in Puerto Vallarta is to reveal the recent changes that have occurred in Vallarta while dispelling the misconceptions about living conditions in Mexico. For the full series of articles regarding travel to and retirement in Vallarta as well as pertinent Puerto Vallarta links, please visit us at PVREBA.

Puerto Vallarta Marina Area

Puerto Vallarta beachfront condos

By: Jim Scherrer

With the incredibly fine winter climate, proximity to the US and Canada, and the amenities offered, Puerto Vallarta, Mexico has long been recognized as a great resort destination as well as retirement haven for North Americans.

Beginning early in the 21^st century, Vallarta, as with many other resort destinations, began an explosive period of growth. Developers from around the world flocked to Vallarta in order to cash in on the baby boomer retirement plans. Within a short period of time, most of the finest beach front and hillside properties were snatched up and planning began in earnest. Tower cranes were erected, dotting the skyline throughout the city, and construction workers from neighboring states rushed to the area for employment.

As soon as the above projects were announced, the developers threw up beautiful sales offices and prepared for the land rush. These nice, spacious, air conditioned offices typically had comfortable lounge areas with new furnishings, pretty magazines, sometimes piped in music and perhaps a few free margaritas. They were typically staffed with English speaking, well dressed, experienced, professional sales personnel. Most of these new offices had multiple sales cubicles with the capability of negotiating two or three contracts at a time; some even had counters where the buyers could get in line to wait their turn for such a unique opportunity to own a piece of Paradise. Granted, it never quite reached the point that it did in Florida, where they were holding lotteries and drawing lucky buyer numbers out of a hat!

During the first few years of the decade, the North Americans were grabbing up the new condos at such a torrid pace that many of the construction projects were 30%, or more, sold out before they even broke ground. Pre-construction pricing of 10-20% off their suggested list price was frequently offered to owners of condos previously built by the developer. After all, these privileged speculators had earned the right to have the first chance to scoop up the most desirable condos at what seemed to be reasonable prices; few could afford to pass up such a no-brainer investment opportunity!

Meanwhile, as the tower cranes started whirling around and the thousands of construction workers, looking like a huge colony of ants, began their construction, the beautiful buildings started coming to reality. Money was flying in every direction and it seemed as though everyone that came to town had an extra half a million dollars to spare for their retirement dream residence. Of course, during those years, re-financing and second mortgages on North American real estate with highly inflated values was commonplace; the herd had a feeling of easy money and never ending wealth!

With the herd of somewhat naive buyers in town, the question was never whether or not they should buy a condo; it was which condo they should buy. They were virtually knocking down every real estate office door in town (approximately 80 in the area at its peak!); it was definitely a seller's market. The developers would usually negotiate 5-10% off list price in order to give the buyer a sense of satisfaction that they had received a good deal, still leaving the developer with a substantial profit margin; everyone was happy as the good times rolled on!

By the middle of the decade, the local real estate market was humming on all cylinders and new projects were being announced almost daily. The Mexican Tourism Board announced plans for developing a new 20 mile stretch of beaches north of Vallarta and planning was underway for another 20,000 new condos. Obviously, as long as the stampede continued, they would continue building and prices would continue to escalate, resulting in a tripling of real estate values during a short 7 year period of time, i.e. the old rule of supply and demand was in full force; keep coming and we'll keep building!

Well, as always happens, a global recession hit in 2008. However, this time it was much deeper than most had ever experienced, severely impacting the PV real estate market as the demand virtually disappeared overnight. Developers and speculators were left holding thousands of new unsold condos creating the greatest buyer's market ever experienced in this part of the world, i.e. the supply (glut) of new condos far outnumbers the demand. Consequently, the developers and speculators are on their knees just trying to recover their costs, often discounting by 30% or more while many of those fancy real estate offices in PV were forced to close and those remaining open are doing so on shoestring budgets and reduced staffs.

The herd mentality has been clearly demonstrated on a daily basis for a number of years all over the Vallarta area and is still in play, except now the buyers are all following each other in the opposite direction; postponing purchases until someday in the future when the economy is more certain, i.e. until the coast is clear. The masses seem to feel a sense of urgency to purchase when their peers are doing so and feel no sense of urgency to purchase when prices are at the lowest levels possible. During the past year, it has been absolutely amazing to see the herd of what appear to be intelligent, educated buyers walking away from once in a life time opportunities because there's no line up of buyers. It's as though everyone's afraid to be a contrarian; consequently, they'll end up buying later at a higher price.

Buying into a given real estate market is essentially the same as buying into the stock market. Why does the herd always insist on buying high and selling low? The developers are never going to sell below their cost and current prices are as low as they'll ever be; bargain opportunities are everywhere but once they are recognized and scooped up by the savvy buyers, the prices will surely start escalating again.

We thank our lucky stars for having bought a villa in PV twelve years ago (before it was the in-thing to do) and have seen it more than triple in value. Of course, anyone buying today at these severely depressed prices could realize a short term gain of 50% (or more) on their investment, if and when the economy ever recovers. However, knowing the way the herd mentality reacts, the majority of buyers probably won't return to the table until it's too late to take advantage of the current situation with its tremendous real estate values.

Are there any contrarians out there? Are there any retirees or about-to-be retirees that have any money (or credit) left? If so, you'll never find a better time to take advantage of a seriously depressed and overbuilt real estate market. Pack your bags and come on down for a week of fun in the sun this winter and check out the phenomenal opportunities that await you in Puerto Vallarta. With the current availability of mortgages in Mexico, this is a rare opportunity to buy low and perhaps someday in the future, sell high; it's a great concept! Disregard what the herd is doing and remember just one thing; they're usually wrong!

(Please see Puerto Vallarta PHOTO GALLERY)

Jim Scherrer has owned property in Puerto Vallarta, Mexico for 26 years and resided there for the past twelve years. The mission of his series of 70 articles pertaining to retirement in Puerto Vallarta is to reveal the recent changes that have occurred in Vallarta while dispelling the misconceptions about living conditions in Mexico. For the full series of articles regarding travel to and retirement in Vallarta as well as pertinent Puerto Vallarta links, please visit us at PVREBA.

The hotel price comparison site Trivago.co.uk found that 45 per cent of the 4,000 British travellers they surveyed relied on old fashioned travel guide books to choose their holiday and hotels rather than turning to the internet.

I am always tempted to check out online reviews before booking anywhere but, despite the growth of these websites, only seven per cent of those surveyed said they were the main influence on their choice of hotels.

This new research follows a report by a US market research company, PhoCusWright, which claimed that the number of travellers using review sites was falling.

It said the number looking at reviews declined from 55 per cent in October 2007 to 46 per cent in October this year.

Advertising and holiday brochures were deemed to be most important by 15 per cent of respondents and ten per cent of Brits based their decision on experience.

Surprisingly, even with the weak pound, the price of the hotel was only listed as the fourth most important factor for Brits.

The reputation or affiliation to a hotel chain influenced the decision of four per cent of respondents. Only two percent of British travellers booked because of a friend’s recommendation.

In other countries the results are very different. The Spaniards are the biggest bargain hunters: Hard hit by the economic crisis, 45 per cent of Spanish travellers stated that the price as the most important factor when selecting a hotel in 2009.

The Germans also indicated that the price was the most important criterion (35 per cent), as well as the Italians (34 per cent). From the French respondents, 60 per cent stated that advertisements and holiday brochures were the most important factor.

Loved a location on holiday? Why not make it more permanent – check out some Spanish property at http://spain.themovechannel.com/ or some in France at http://france.themovechannel.com/

For the latest news on travel and tourism, and the property market in general, please visit http://www.themovechannel.com/news/travel_and_tourism/

-ENDS-

Notes to editors:

TheMoveChannel.com is a property website that was founded in 1999 as an online resource for buying, selling and learning about property. It now receives as many as 300,000 visits per month and advertises over 50,000 properties in nearly 90 countries, which are listed by over 500 partner organisations.

For further information, please contact:

Dan Johnson
Managing Director
www.themovechannel.com
0207 952 7650

A new dawn is being heralded in the airline industry, with an aircraft design being developed here in the United Kingdom in which passengers sit facing each other in rows.

As the new design would allow 50 per cent more passengers to be crammed onto the plane, it would also mean that seats were up to a third cheaper. Which can’t be bad, can it?

Well, even though the plans are only being aimed at passengers on short-haul flights, I’m still not convinced that I fancy spending a couple of hours surreptitiously avoiding the eyes of the person opposite me. I can’t help it- I’m just too English for my own good.

I can imagine this kind of set up going down well in America, Australia or New Zealand, but us Brits are often very reserved and the thought of being engaged in conversation with a stranger en route somewhere and then being trapped opposite them once small talk runs out strikes fear into our hearts.

And that’s not all – not only would we be facing other passengers, the seats would be flip-down with their backs to the window rather than padded recliners like we currently have.

You’d think the leg room would be better though – after all, how close are they going to make us sit? Well, the design, created by UK based Design Q, also prevents the use of food trolleys as the aisles would be too narrow to allow them to pass by. So I think that answers your question.

Plus there wouldn’t be any view out of the window.

The company said it is loosely based on the way some soldiers travel to battle zones and is aimed at passengers on short trips where comfort is less important than a cheap flight.

The design is also said to make the plans more fuel efficient and lighter.

For the latest news on travel and tourism, and the property market in general, please visit http://www.themovechannel.com/news/travel_and_tourism/

-ENDS-

Notes to editors:

TheMoveChannel.com is a property website that was founded in 1999 as an online resource for buying, selling and learning about property. It now receives as many as 300,000 visits per month and advertises over 50,000 properties in nearly 90 countries, which are listed by over 500 partner organisations.

For further information, please contact:

Dan Johnson
Managing Director
www.themovechannel.com
0207 952 7650

Real Estate in Puerto Vallarta, Mexico

By: Jim Scherrer

The Consumer Price Indexes (CPI) program of the US Department of Labor produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services in the United States. Tracking the CPI data began in 1913 and by 1983, inflation had reached 100%. Therefore, today most all data is calculated using a 1983 base of 100. For example, a CPI of 215.3 in 2009 indicates 115.3% inflation since 1983. Below is the inflation calculator based on data provided by the U.S. Department of Labor Bureau of Labor Statistics showing inflation during the past decade:

The above calculator shows that if you put $100 under your mattress ten years ago it, through the inflation of goods and services during the past decade, it would be worth $76 ($100/1.32) today, i.e., worth 76% of its original value or a loss of 24% in terms of 1998 purchasing power.

In order to hedge against inflation, many advisors suggest that you buy various commodities, oil and gas, foreign dollars, Real Estate Investment Trusts (REITS), Treasury Inflation-Protected Securities (TIPS), gold, and silver, etc. All of these investment vehicles are now available through Exchange Traded Funds (ETF’s) where you don’t have to take physical possession of the commodities; for relatively small investments, gold and silver in the form of bullion or coins is readily available and simple to purchase and hold. All of these forms of hedges against inflation can be excellent, however for the purpose of this article, we’ll concentrate on silver.

Silver has always been one of Mexico’s major export materials; in fact, until just a few years ago, Mexico was the largest producer and exporter of silver in the world. Let’s assume ten years ago, instead of putting your $100 under the mattress, you bought $100 worth of silver selling at approximately $5.50/ounce. Today, at $16.65/ounce, you can sell your silver and enjoy a gain of more than 200%, i.e., your $100 investment is now worth $303 resulting in a 1999 purchasing power of $230 (76% of $303); not bad! If you’re concerned that the recent increase in silver prices is only a temporary spike, it should be known that silver was selling at $20/ounce in 1981 and when the Hunt brothers were speculating in 1980, it was driven up to over $50/ounce; now that was a spike! The last time silver was selling for $16.65/ounce was in 1981. Taking the CPI inflation index of 2.37 (1981 to 2009) into consideration, $16.65/ounce in 1981 was equivalent to almost $40/ounce (2.37 X $16.65) in today’s money and therefore it’s not too difficult to imagine a much further increase in silver prices! This logic is further reinforced when you take into consideration the weakening dollar forecasted for the near future.

Ten Year Silver Prices

The world’s leading miner and producer of silver is the Pan American Silver Corp. (PAAS), headquartered in Vancouver, B.C. This publically traded company has silver mines throughout Latin America with a couple of its largest mines in Mexico. In fact, one of these two mines is their only open pit mine and the other huge Mexican mine, located north east of Puerto Vallarta, has been producing the purest silver of all their mines since 1929. The graph below reveals the PAAS stock performance during the past ten years.

Next, let’s analyze the performance of the US stock market during the same ten year time frame.  If your $100 had been invested in SPY, the S&P 500 ETF, it would be worth 80 dollars today per the graph below.  Let’s take it a step further and adjust for inflation; that $80 would have only $61 (76% of $80) of 1999 purchasing power. Yes, that’s correct; if you were invested in the US stock market and your return was better than average, you’ve lost almost 40% of the purchasing power that you had ten years ago!

Now, let’s compare the ten year performance of the Mexican stock market (Bolsa) to the US stock market. If you had purchased EWW, the ETF basket of Mexican stocks, in 1999, you would have realized a 150% gain and your initial investment would now be valued at $250, with a 1999 purchasing power of $190 (76% of $250); pretty decent, especially when you compare it to the $61 left from investing in the SPY’s!

Review the graph below and you’ll immediately see how much the ETF basket of Mexican stocks (EWW) and the Pan American Silver Corp. (PAAS) stock had appreciated in value through 2007 and then fell precipitously in the second half of 2008. More importantly, you can see how both are recovering beautifully as the world recovers from the global recession. Comparing both of these Mexico related stocks to the SPY’s; you may never again want to invest your $100 in a US related stock! Assuming that the global economy continues its gradual recovery, it seems quite apparent from extrapolating the curves below that Mexican stocks and silver are very attractive areas for investing a portion of your portfolio at this time. It’s amazing to see how closely the EWW and the PAAS stock prices have correlated over the past decade!

Finally, let’s look at Mexican real estate. Along the prime region of the Mexican Riviera, property values have tripled from 1999 to 2008 (we don’t have any empirical data but after being invested in the real estate market in Puerto Vallarta for more than a quarter of a century, we can state it as a fact; some properties have quadrupled in value!), after which they have remained flat to perhaps dropping by as much as 20%. Therefore, a real estate investment of $100 in 1999 was worth about $300 in 2008. Assuming a depreciation of $60 (20% of $300) over the past 18 months, it’s now worth $240. In terms of 1999 purchasing power, it’s worth $182 (76% of $240); about the same as EWW and PAAS, not as much as silver, but a whole lot more fun than owning either! When comparing these facts and figures to the $61 of 1999 purchasing power remaining from the $100 invested in the SPY’s, it’s truly disheartening to think of those of you that were fully invested through IRA’s or 401k’s during the past decade. Fortunately, it’s not too late to recoup your losses; in fact, the time could never be better!

The recent drop in Mexican real estate values was caused mainly by the global recession; however, the recent border town drug cartel war news (1,200 miles between PV and Juarez!) and the swine flu scare (three confirmed cases in PV!) contributed significantly to the local real estate recession. The border town drug cartel war and the swine flu scare effects will vanish over time and in all probability, the property values will soon recover to their 2008 highs. Unlike the 20% property value drop in the US, there are virtually no foreclosures dragging down the housing values in Mexico. The housing crisis in the US will probably continue for a couple more years resulting in further erosion of home values by an additional 10-20%. Currently, millions of Real Estate Owned (REO-lender owned) properties exist in the US but you won’t find any in Mexico!

In summarizing, $100 placed under the mattress ten years ago has a 1999 value of $76 today, $61 if in the S&P 500 SPY’s, $230 if in silver, $190 if in the Mexican EWW fund, $185 if in the silver company PAAS, and $182 if in Mexican real estate. Regardless of where in Mexico you had invested your $100 ten years ago, whether it was in Mexican silver, stocks, or real estate, you’ve now got at least three times as much as you would have had if you had invested in the S&P 500 SPY’s! So, here we are in 2009; the question is where best to invest your remaining money after the fiasco of the past decade? With real estate prices 20% off recent highs, long term mortgages of 50% (or more) available in Mexico, and many developers willing to short term finance up to 50%, there has never been a better time to invest in Mexican real estate.

Why hesitate; isn’t it about time that you at least consider making an investment decision totally contrary to those recommendations that you’ve been receiving from your personal financial “guru” that have cost you 40% of your life’s savings? Come on down and retire in Mexico; maybe you’ll even want to buy a bag full of Mexican Libertads or dabble in the Mexican Bolsa through a vehicle such as the EWW fund while enjoying retirement to its fullest! Who knows; as you’re relaxing in your beach front condo on the Mexican Riviera, perhaps your investments in Mexico will gain enough over the next couple of years to recover what you’ve lost during the past decade!

Jim Scherrer has owned property in Puerto Vallarta, Mexico for 26 years and resided there for the past twelve years. The mission of his series of nearly 70 articles pertaining to retirement in Puerto Vallarta is to reveal the recent changes that have occurred in Vallarta while dispelling the misconceptions about living conditions in Mexico. For the full series of articles regarding travel to and retirement in Vallarta as well as pertinent Puerto Vallarta links, please visit us at PVREBA

British Airways' first commercial Concorde flight flew from London Heathrow to Bahrain on 21st January 1976, creating aviation history.

Now, the Concorde fleet is grounded and the aircrafts have been placed at museums around the world, but if you want to experience the thrill of what it would have been like, check out the simulator.

It isn’t just a mere fairground attraction either – all British Airways Concorde pilots were trained on this simulator.

Concordes are the only aircraft in the world that can fly at twice the speed of sound, meaning that a trip from London to New York would take a mere three hours as opposed to more than seven hours on a normal aircraft.

Each of the Concordes were partly built at Brooklands Museum in Surrey, which is now home to the simulator too.

It also provides a home for the Concorde G-BBDG, the first aircraft to fly 100 people at twice the speed of sound.

Previously, the simulator was only open to aviation professionals who were using it for training, but, following renovations, it is now open to members of the public too.

And, unlike many simulators, this one does not move, instead relying on detailed graphics to recreate the ‘flight.’

And, like Concorde, a flight on the simulator won’t come cheap – expect to pay either £139 or £395, depending on whether you choose a one or two hour experience.

For the latest news on travel and tourism, and the property market in general, please visit http://www.themovechannel.com/news/travel_and_tourism/

-ENDS-

Notes to editors:

TheMoveChannel.com is a property website that was founded in 1999 as an online resource for buying, selling and learning about property. It now receives as many as 300,000 visits per month and advertises over 50,000 properties in nearly 90 countries, which are listed by over 500 partner organisations.

For further information, please contact:

Dan Johnson
Managing Director
www.themovechannel.com
0207 952 7650

By: Jim Scherrer

As parents, we all strive to raise healthy, good, productive, and happy kids. This goal is so important that there have been numerous articles and books written by psychologists and other experts in the field dedicated to the subject of raising children.

Most of the experts agree that giving kids anything they want, when they want it, only leads to spoiling them. Instead of creating happiness, this practice all too often leads to disappointment; kids that expect every wish to be fulfilled eventually find  insecurity, inability to make decisions, low frustration tolerance, low self esteem, disregard for others, unappreciativeness, and general unhappiness. Most experts suggest that gifts to kids should be made when they are deserved or when the kids are mature enough to be appreciative.

The experts also agree that spending more quality time with your children is one of the key factors to raising psychologically healthy and happy kids. Sharing thoughts and stories during idle time, enjoying healthy activities out in the sun, and discussing plans, strategies, and goals creates lifelong bonds which lead to truly happy kids.

Okay, so how long should we try to satisfy our kids? As we all know, we of course want to make them happy during their entire lifetime; it’s never too late to please the kids! Now, enough for making our kids happy; let’s think about how we can simultaneously make ourselves happy!

As we approach retirement, in all probability, the kids are pretty well grown up and their personalities have already been shaped. However, it’s still not too late to please them while at the same time correct some of the mistakes that might have made while raising them by paying attention to and spoiling the grandkids!

Can you think of a better place to enjoy the kids and grandkids than in Puerto Vallarta, Mexico? Just imagine, you retire to a beautiful new condo in PV with jaw-dropping views of the Sierra Madres and Banderas Bay and you have nothing better to do than play golf, tennis, fish, or just relax poolside under the sun with a cool one in hand. What better gift for yourself and your kids than to have them visit your little Paradise south of the border during the Christmas/New Year holiday period, a birthday celebration, or perhaps some other special occasion?

In Vallarta, the seven month “high season” of November through May offers perfect weather with an average daily temperature of 73*F and virtually no rain. The abundance of activities for young and old will allow you and your family to have the time of your life together. The only time the kids will be unhappy will be when they have to return back home to the “real world” and face the hectic stresses of routine daily life.

Keep in mind, Vallarta is situated on the same latitude as Hawaii yet it is only 2-4 hours away from the kids. There are four modern hospitals in town staffed with well qualified and trained English speaking doctors that can handle just about every problem that a geezer is apt to encounter. The entire community is clean and safe with most of the condo complexes staffed with 24 hour security. Modern supermarkets and shopping malls are located throughout the city; high speed internet, satellite TV, VOIP telephone service, and all the other amenities that you’re accustomed to are also readily available in Vallarta. Fine dining, limitless activities, clubs, and organizations for retirees (sorry, no shuffleboard!) will guarantee you never have a dull moment, unless you wish to have one!

For most of us, the key to enjoying retirement life to its maximum in Vallarta is to live in a community near other retirees with common interests. There are numerous condo complexes in Vallarta where the majority of residents are from the US and Canada. Most of these complexes are quite secure and are located either on one of the beaches or on one of the hillsides overlooking the beaches. They are almost universally within minutes of all the activities and of course, all offer world class views and sunsets.

Due to the fact that the local developers overbuilt during the past decade and then got hit by the global recession (and border town drug war news along with the swine flu media hype), there is currently a glut of more than 7,000 new condos on the market in PV from which you can select your retirement nest. With the supply of condos far exceeding the demand, it’s the best buyer’s market in Vallarta that we’ve seen in a generation.

Beautiful new beachfront and hillside condos are being sold today at near pre-construction prices; not much more than the cost of construction. With the recent availability of Mexican mortgages, these incredible condos are well within the reach of most everyone nearing retirement. This opportunity should be especially attractive to Canadians as their dollar continues to strengthen over time. 

As they say, all good things must come to an end; we all will pass on and when we do, the kids will probably be near retirement age. Hopefully, this will be a sad occasion for them however inheriting a beautiful condo in Puerto Vallarta will surely ease the pain! Since the title to the Mexican condo is held by a Mexican bank in a 50 year trust with your kids as the beneficiaries, it will automatically pass on to them. Regarding inheritance taxes; we’ll leave that matter up to you and your tax attorney-think about it! Last, but not least, this will be the ultimate gift to the kids and allow them to regain their happiness as they begin their own retirement planning.

So, come on down to this Mecca south of the border and check out the real estate opportunities that await you. In doing so, you’ll have the best time of your life; while self indulging, you’ll also make your kids really happy!

Jim Scherrer has owned property in Puerto Vallarta, Mexico for 26 years and resided there for the past twelve years. The mission of his series of more than 60 articles pertaining to retirement in Puerto Vallarta is to reveal the recent changes that have occurred in Vallarta while dispelling the misconceptions about living conditions in Mexico. For the full series of articles regarding travel to and retirement in Vallarta as well as pertinent Puerto Vallarta links, please visit us at PVREBA.

By: Jim Scherrer

As retirees and 12 year residents of Puerto Vallarta, Mexico, it’s quite easy to extol the benefits of living in Mexico. Of course, not every part of Mexico is the same (as is true in the US or Canada); however, we can certainly vouch for Puerto Vallarta.  With its beautiful climate and landscape of the Sierra Madres cascading down into Banderas Bay, its kind and friendly local citizenry, its proximity to the US and Canada, and its lower cost of living, what’s there not to like in this wonderland south of the border?

English, as a second language, is widely spoken throughout the city, the safety of expats is of highest priority for the authorities with the rate of violent crime at a fraction of that back home, corruption significantly reduced, poverty virtually eradicated, and the cleanliness of this city make it a favorite resort destination for millions of visitors from throughout the world. All of the “Big box” stores such as Sam’s Club, Costco, Wal-Mart, Builders Square, Office Depot, nine beautiful signature golf courses, world class deep sea fishing, high speed internet, satellite TV, VOIP telephone service, etc. are all available in this beautiful city in the center of the Mexican Riviera. The face of Vallarta has been dramatically altered during the past decade with well maintained city parks, esplanades, a new malecon walkway along the beach, new water treatment facilities and miles of new water distribution lines, new or upgraded power distribution system throughout the city, new downtown above ground and underground parking garages, a new University of Guadalajara branch, a new Convention Center, the tripling in size of the Maritime Terminal, the quadrupling in size of the International Airport, and the addition of four new hospitals with modern and sophisticated diagnostic and surgical equipment, staffed with highly trained and experienced English speaking doctors.

Now that we’ve established the fact that Vallarta is a fine place to live or retire, let’s take a closer look at the last item above related to medical care.

With high quality medical care readily available in Vallarta, the cost of it, even though at a fraction of the cost in the US, can be a deciding factor when considering Mexico as a retirement location. Assuming that most retirees have reached or are fast approaching their 65^th birthday, the availability, quality, and cost of medical care are of high importance. The quality of medical care in Vallarta is generally equal to or better than that received in the US and the cost varies from one third to one half of that in the States (speaking from experience and with authority!).

Having high quality medical care available in Mexico is one thing but paying for it is another since US provided Medicare for seniors fails to cross the border at this time. Various supplements to Medicare cover seniors traveling abroad for a limited period of time (for example, supplement F covers the holder for the first 60 days of international travel), however, they are inadequate for full time residents living abroad.

Although Mexican Social Security (IMSS) is available to expats, most under the age of 65 have their own private international health insurance which is somewhat costly as discussed in numerous articles and covered on websites such as MedToGo. For many years, we have used IHI/BUPA and can state emphatically; their coverage and service is absolutely great for expats living in Mexico and traveling worldwide.

Now, let’s assume you’ve reached the age of 65 and are considering Mexico as your retirement destination. It’s very difficult to abandon your free Medicare that you’ve contributed to for a lifetime, the cost of private insurance is almost prohibitive, and you can’t afford to take the risk of being uninsured. This is the main dilemma for seniors considering retirement abroad. Even so, there are more than five million (some reports indicate six million) Americans living abroad, of which more than a million reside in Mexico per the Association of Americans Resident Overseas (AARO). In fact, there are more US expats living abroad than reside in 24 of the states in the US as reported by Republicans Abroad!

Well, perhaps we’re on the verge of overcoming this top objection to retiring in Mexico! The US government has been approached by numerous expat groups such as the Puerto Vallarta based chapter of Democrats Abroad and the bipartisan group of American Citizens Abroad (ACA) with the intent of promoting the advancement of Medicare for expats living abroad.

Before Congress can enact such a law change, they must conduct demonstration projects in order to determine the feasibility and cost effectiveness of such law changes. The Americans for Medicare in Mexico, A.C. (AMMAC) have put forth a tremendous effort in promoting this benefit to eligible retirees and have encouraged many members of Congress to initiate such a demonstration project. They argue that not only have these eligible Medicare recipients paid into the fund over a lifetime, but the cost to the US taxpayers will be significantly reduced because rather than returning to the US for expensive and long term medical care, the majority of these expats will merely elect to have their medical care provided near their foreign residence at a fraction of the cost.

Proponents of the law change such as Professor David C. Warner of the Lyndon B. Johnson School of Public Affairs at the University of Texas have written books and papers on the subject of “Getting What You Paid For: Extending Medicare to Eligible Beneficiaries in Mexico” and the newly appointed US Ambassador to Mexico, Carlos Pascual, has been following the current efforts to establish a demonstration project for the initiation of Medicare in Mexico as a pilot program. In fact, Ambassador Pascual recently accompanied President Obama to a North American Summit in Guadalajara where one of the topics covered was Medicare in Mexico as reported by the Guadalajara Reporter.  

In summarizing, we are anticipating the availability of Medicare for eligible retirees residing in Mexico in the not too distant future. Once this obstacle to retiring abroad has been eliminated, not only will millions of baby boomers in search for a less expensive and better quality of life be heading south of the border, but so too will millions of retiring Mexican Americans desiring to return to their homeland. Combined with all of the other obvious benefits of living in Paradise, free and high quality medical care for boomers will just be the icing on the cake!

Jim Scherrer has owned property in Puerto Vallarta, Mexico for 26 years and resided there for the past twelve years. The mission of his series of more than 60 articles pertaining to retirement in Puerto Vallarta is to reveal the recent changes that have occurred in Vallarta while dispelling the misconceptions about living conditions in Mexico. For the full series of articles regarding travel to and retirement in Vallarta as well as pertinent Puerto Vallarta links, please visit us at PVREBA.

New Condos in Puerto Vallarta

By Jim Scherrer

Let’s start out by assuming that you’re a pretty savvy investor; your 401k, IRA, or personal investments have kept up with the S&P 500 average during the past ten years and you’ve lost only about 35% of your life’s savings! Did you realize that the Mexican Exchange Traded Fund (EWW) which represents the Mexican stock market, even though it was annihilated during the current recession along with all other markets throughout the world (but is recovering rapidly), has advanced by 200% during the same time frame? In other words, $100 invested in the S&P 500 in 1999 would now be worth $65, whereas if it were invested in the Mexican EWW fund it would now be worth $200. Please refer to the ten year graph below in order to see the comparisons between these two areas of investment and perhaps you can speculate as to where might be the best market to place your next bet!

                                                                                                                                                                                                                                                                        One of the most significant reasons for this steady and rapid growth in the Mexican stock market (Bolsa) must be attributed to the policies of the new governing party that has been in control since 2000. Mexico has been governed by a couple of pro-foreign investment Harvard alumni during most of the timeframe shown above and will continue under the same leadership for at least another three years. The PAN party, led first by President Fox and currently by President Calderon, has brought Mexico from a Third World Country to a Newly Industrialized Country standing in a matter of seven short years. Among their numerous accomplishments, they have cracked down on corruption, have promoted free market capitalism while maintaining a relatively firm peso/dollar relationship, and have elevated tourism to the top of their list of strategic objectives.

We have lived in Puerto Vallarta during the entire ten year period and have witnessed the changes and growth firsthand. As the economy has boomed, unemployment in Vallarta has been virtually eradicated while the population has doubled, prices for materials, labor, and land have tripled, and of course, real estate prices have also tripled.

Now, let’s compare this growth and real estate value appreciation in PV to what has been experienced in the US. The latest government released graph below from the Federal Housing Finance Agency (FHFA) shows that average housing prices in the US appreciated by nearly 70% from 1999 through 2006. Since then, the rate of appreciation has dropped precipitously until the fourth quarter of 2007 when values actually started depreciating.  Throughout all of 2008 and the first quarter of 2009, prices have plummeted by about 10% and as you can see in the graph below, we can project prices to fall by another 5-10% before they once again start appreciating. In other words, the average investment in housing in the US made 10 years ago will have increased in value by 40-50% by the end of 2009. Even though housing values have recently been crushed, real estate has still way outperformed the stock market during the past ten years; hopefully, your real estate gains have more than offset your stock market losses!

With the US real estate market currently experiencing a serious recession, no real appreciation in housing values is expected for at least two more years. In summarizing, most Americans have enjoyed roughly a 40-50% gain in their property value over the past ten years and can expect the equity in their residence to be, at best, essentially dead money for the next couple of years.

When we compare the above data to what we’ve experienced in Vallarta, where real estate values have tripled during the past decade, we can only thank our lucky stars for letting us be among the first to participate in the ongoing land rush in Paradise! Fortunately for the about-to-retire baby boomers, it’s not too late.

Due to the extreme demand in second homes and retirement properties in resort destinations, Vallarta has witnessed an explosive ten year period of growth. So much so, that with the current global recession, the developers of the large condominium projects requiring long term planning, financing, and construction have been caught totally off guard. Once they committed, most of them (the reputable and fully capitalized ones!) felt it necessary to complete their projects regardless of sales. Consequently, with the recession driven reduction in demand and a supply of more than 7,000 units, prices for new condos are at a bargain basement level with some of the developers selling their surplus inventory at not much above their cost. This is truly a buyer’s market in PV for new condos however this supply/demand imbalance has had minimal effect on the value of existing condos.

The situation regarding the resale of existing homes and condos south of the border is entirely different than in the US. In Mexico, there are seldom any promotions or transfers requiring a housing upgrade or relocation, i.e., business related issues almost never require the sale of a resort property. Also, very seldom do owners decide to upgrade or downsize once they own a retirement property. More importantly, almost all real estate purchases in Mexico have been done on an all cash basis and therefore, regardless of the economy, there are no foreclosures on these fully owned properties. Mortgages became readily available in Mexico about five years ago however they require at least 20% down and substantial documentation proving one’s ability to pay. (Sorta like the good ol’ days in the US!) With this kind of financially solid buyer and this level of equity, there are virtually no foreclosures in Mexico. Although the rate of sales of existing properties has slowed to a snail’s pace, in the absence of foreclosures, prices of resale properties have held up fairly well; certainly not plummeting as in the US.

In summarizing, those of us that have been fortunate enough to be invested in Mexico during the past decade have fared very well. Even though we’ve felt the impact of the financial downturn during the past couple of years, our Mexican stocks and Mexican properties have more than doubled in value while those in the US have lagged well behind.

As we look to the future, we see very promising growth in the Mexican Bolsa as well as in Mexican real estate sales. In fact, FONATUR, the Mexican Tourism Board is still forecasting explosive growth in the Nayarit Riviera area, just north of Puerto Vallarta, during the next decade; only time will tell. As they say, “past performance is no guarantee of future results”! Assuming the global economy eventually rebounds, it is a given that the millions of baby boomers, just starting to retire, will be heading south for the benefits that Mexico has to offer. When this stampede of boomers hit the beaches in Vallarta, real estate prices that have been essentially flat for a couple of years, will continue escalating.

Aside from the fact that we have seven months of perfect winter weather in PV from November through May, when the average temperature is 73*F with virtually no rain and blue skies, we have eight magnificent golf courses, hundreds of tennis courts, world class deep sea fishing, hundreds of fine restaurants, clean food and water, and 50,000 other gringos to play and party with, our portfolios of stock and real estate investments south of the border are “en fuego”!

If you’re recently retired or considering retirement in the near future and you’re the savvy investor that you think you are, you really ought to check out the investments that lie south of the border; enjoy your retirement to its ultimate, and put your dead money to work for you in beautiful Puerto Vallarta.

Jim Scherrer has owned property in Puerto Vallarta, Mexico for 26 years and resided there for the past twelve years. The mission of his series of more than 60 articles pertaining to retirement in Puerto Vallarta is to reveal the recent changes that have occurred in Vallarta while dispelling the misconceptions about living conditions in Mexico. For the full series of articles regarding travel to and retirement in Vallarta as well as pertinent Puerto Vallarta links, please visit us at PVREBA.

A new survey by Holiday Inn and Holiday Inn Express hotels has uncovered some rather alarming information about just what constitutes travellers' essential items.

Space is usually limited when packing for a trip, but the bizarre array of items found left accidentally in hotel rooms suggests that some things just can't be left at home – including a monk fancy dress costume.

Of course, lots of things that were left behind are far less interesting than sheep and monks. (What a combo!)

False legs were on the list – which begs the question, how on earth did their owner leave without noticing they didn't have their leg in tow?

Crutches and dentures were also found to be a common sight after their owner's departure.

Hotel managers reported that around £2.5 million worth of items are left behind each year, with phone chargers and underwear the most-recovered things.

Each year, hotel staff find 42,000 phone chargers worth around £630,000 and more than 40,000 items of underwear worth around £200,000, plus 14,000 toothbrushes worth around £21,000.

Pity the poor sole who left behind £2,000 in cash.

Jane Bednall, from Holiday Inn, said, "It's quite unbelievable just how much is left behind by our guests each year.

"The phone chargers would easily stretch across the English Channel.

"Most items are not re-claimed and after six months we donate anything of value to local charities," she added.

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-ENDS-

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