Buying That Dream Home -- In Mexico

When the cruise ships started coming to Mexico's Costa Maya, mainly two small towns called Mahajual and Xcalak, about four years ago, property values soared.

Prices "have been consistently increasing at 20% a year for the last four to five years," says Denis Couture, a Detroit-based real estate developer and broker who has been buying and selling property in Costa Maya since 2000. "I bought two properties four years ago and they have appreciated 20% each year."

In fact, over the past five years, home values have increased all across coastal Mexico. Although some investors have pulled out after lost investments due to the slowing U.S. housing market, there is no reason to believe the homes in Mexico will not continue to appreciate, experts say. And though there are a number of drawbacks to living south of the border, there are a lot of benefits, too.

"American interest in Mexican property as a weekend getaway, summer holiday retreat or a retirement home destination is strong," says Brent Gleeson, co-founder and president of NewCondosOnline.com. "And with more and more baby boomers coming to retirement at a time when pension incomes are not buying a lot in America, Mexico is continuing to witness inward flows of American migrants seeking a better quality of more affordable life."

An estimated 1.5 million Americans currently own property in Mexico, says Oscar Franck, managing director of Integra Realty Resources, a commercial real estate valuation and consulting firm. "Overall real estate foreign investments in Mexico for the 2007 period continue on an upward trend," he says.

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