Mexico’s resort developments show the U.S. economy affects the rest of the world

Implications: The Mexico resort/retirement/second home industry is suffering as buyers from the U.S. are on the sidelines. Some thirty Baja California and Sea of Cortez developments in planning are predicted to stall on the boards in the coming period. Prices have escalated at 15% annually in recent years, but no more for the moment.

Analysis: The future here is tied to U. S. baby boomers who are expected to retire with their accumulated savings and considerable estates inherited from their parents. The future is thought to be bright if the boomers actually have the capability to afford the grand expatriate life style. But there is some question about tomorrow’s market as a more volatile future unfolds and fortunes are diluted. The San Diego Union recently published “Baja feels the effects of housing downturn” (December 5, 2007) which puts numbers and quotes to this theme.