College Station Educators Conference 2008

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					If the Mexicans Build It,
Will the Texans Come?




     2008 Educator’s Conference
          Harold Hunt, PhD
La Pesca


El Paraiso
La Pesca
El Paraiso
   Where Are the Most Popular
   Retirement Areas in Mexico?



• Lake Chapala Region (Jalisco)

• Baja California (North and South)

• San Miguel de Allende (Guanajuato)
The Lake Chapala Region
           (State of Jalisco)




  Lake
 Chapala
 Region
        The Lake Chapala Region
             (State of Jalisco)




Ajiji
c
Baja California
(North and South)
San Miguel de Allende
   (State of Guanajuato)




                    San Miguel
                    de Allende
      El Paraiso Developers Had
       Two Primary Questions:


1) What hurdles must we overcome for a
   successful development?

2) Where do we find the buyers for our
   properties? (We are thinking Texas
   retirees)
5 Studies Examining Characteristics
   of Retirees to Other Countries


1) U.S. Retirees in Mexico (1997)

2) Swedish Retirees in Spain (2001)

3) U.S. Retirees in Lake Chapala region
  (2002)

4) U.S. Retirees in Mexico and Panama
  (2006)
   Study 1: U.S. Retirees in Mexico



• U.S. retirees sought out:
  – Lower cost of living

  – Better geographic amenities (climate, ocean or
     mountain view, etc.)

  – Easy access to medical services

  – Better quality of life (maids 78%, gardeners 94%)
    Study 1: U.S. Retirees in Mexico




• 64% spoke no Spanish

• Only 12% were fluent

• The more U.S. citizens in an area, the less
  proficient in Spanish
    Study 1: U.S. Retirees in Mexico




• 78% had a monthly income of $1,800 or less

• 60% owned their home & 40% rented

• 48% traveled back to U.S. at least once a
  year

• 88% of those folks traveled by car
    Study 1: U.S. Retirees in Mexico


• U.S. retirees had both positive & negative
  effects on an area:
  – Positive:

    •   Better mail, internet and phone service

    •   More banks, supermarkets and restaurants

    •   Employment opportunities increased for
        locals
    Study 1: U.S. Retirees in Mexico


• U.S. retirees had both positive & negative
  effects on an area:
  – Negative:

    •   Increased housing, food and service costs

    •   Increased bars

    •   Increased number of beggars
    Study 1: U.S. Retirees in Mexico



• Retirees liked small, attractive towns near
  large cities (with excellent transportation,
  medical care and cultural attractions)

• Were likely to move if the smaller town got
  absorbed by the large city
  Study 2: Swedish Retirees in Spain




• Most retirees were in the upper middle
  class
  – Professionals or mgrs. with > avg. income
  Study 2: Swedish Retirees in Spain



• Most expected:
 –   A better quality of life
 –   Warmer, healthier climate
 –   Lower cost of living (especially taxes)
 –   Choice in their level of adaptation to Spanish
     culture
  Study 2: Swedish Retirees in Spain



• 3 different retiree lifestyles discovered:
  1) “Routinized Sojourning”

  2) “Translocal Normality”

  3) “Multi-local Adaptation”
  Study 2: Swedish Retirees in Spain



1) Routinized Sojourning:
  – Took seasonal trips to Spain
  – Liked Spain, but felt “at home” in Sweden
  – Had little contact with Spaniards (little social
     adaptation)
  – Spouses often disagreed on how much time to
    spend in Spain
  Study 2: Swedish Retirees in Spain



2) Translocal Normality:
  – Lived most of time in Spain (primarily for health)
  – Had strong attachments to both countries
  – Wanted to continue Swedish lifestyle in Spain
  – Had little contact with Spaniards and their
    culture
  – Thought they were too old to acquire new
    habits, language, etc.
  Study 2: Swedish Retirees in Spain



3) Multi-local Adaptation:
  – Lived most of time in Spain
  – Spent considerable time in Spain before
    retirement
  – Liked “switching lifestyles” in Spain
  – Liked Spanish culture, food and friends
  – Typically retired earlier while in good health
     Study 3: U.S. Retirees in Lake
           Chapala Region


• Destinations go through 5 stages:
  – Emergence, recognition, restructuring,
    saturation and new concerns


• Local leaders “restructure” to cater to
  elderly
  – Bolsters economic growth and stability
  – Creates overcrowding and social/political conflict
        Study 3: U.S. Retirees in Lake
              Chapala Region


• Discovered that “push/pull” factors
  affected retiree decision-making:

  – Positively-selected retirees affected by pull
    factors
    •    Chose to leave to seek better climate, quality of life,
         etc.


  – Negatively-selected retirees affected by push
    factors
     Study 3: U.S. Retirees in Lake
           Chapala Region


• Found 4 distinct groups of retirees:
  1) Positively-selected & liked the Mexican culture

  2) Negatively-selected & liked the Mexican culture

  3) Positively-selected & disliked the Mexican
     culture

  4) Negatively-selected & disliked the Mexican
     culture
     Study 3: U.S. Retirees in Lake
           Chapala Region


• First arrivals were both positively &
  negatively selected folks (groups 1 and 2)
  who:
  – Liked the culture
  – Were determined to assimilate


• Lack of modern amenities and difficulty
  understanding Mex. property laws extended
  their tenure
       Study 3: U.S. Retirees in Lake
             Chapala Region


• Later arrivals were both positively &
  negatively selected folks (groups 3 and 4)
  who:
  – Disliked the culture
  – “Imported” their own lifestyle from the U.S.


• These two groups often overpower the first
  arrivers over time. (Establish “America South” and push out
   1&2)
 Study 4: U.S. Retirees in Mexico and
               Panama


• Argued that more U.S. Baby Boomers will
  retire to Latin America due to:
  – Increasing U.S. medical costs

  – Decreasing reliability on Soc. Sec. & pensions

  – Better transportation & communication
     technology
 Study 4: U.S. Retirees in Mexico and
               Panama

• Many retirees used the internet to find
  property

• Visa, tax and property ownership laws
  were important in locational choice
    ** I have several articles on Mexican trusts


• Thought Medicare benefits should be
  available outside the U.S.
  – Cheaper for retirees and U S government
 Study 4: U.S. Retirees in Mexico and
               Panama


• Reported no trouble finding lawyers and real
  estate professionals who spoke English

• More than 50% of retirees surveyed had
  incomes exceeding $2,000 per month

• A majority of retirees had domestic help
  – Cooks, maids, or gardeners
       Study 5: U.S. Retirees in Lake
                  Chapala

• Reasons for retirement (based on surveys):
  –   88% listed cost of living
  –   69% listed climate
  –   66% listed natural beauty
  –   53% listed presence of large American
      community
  –   47% listed cost/quality of health care
  –   31% listed entertainment activities
  –   34% listed availability of cheap labor
  –    5% listed they married a Mexican national
       Study 5: U.S. Retirees in Lake
                  Chapala

• Wanted a “better quality of life” but defined
  it differently:
  –   Saving money
  –   Better climate
  –   Healthier environment
  –   More rewarding community involvement
  –   Less crime
• Must also have good infrastructure
  development
  – Roads, housing, commercial businesses and
     Study 5: U.S. Retirees in Lake
                Chapala



• 81% either agreed or strongly agreed that
  they came because housing was affordable

• 57% either agreed or strongly agreed that
  they live in Mexico because of the large
  American community
    Let’s Go Back to El Paraiso’s
         Original Questions:



1) What hurdles must we overcome for a
   successful development?
      Let’s Go Back to El Paraiso’s
           Original Questions:

Based on previous studies, hurdles might
  include:
  – Lack of transportation & comm. infrastructure

  – Lack of enjoyable amenities, cultural activities,
     stores, restaurants, etc.

  – Lack of any nearby U.S. retiree communities

  – Lack of nearby medical services
     Let’s Go Back to El Paraiso’s
          Original Questions:


2) Where do we find the buyers for our
   properties? (We are thinking Texas
   retirees)

Depends on:
  – Price
  – Ability to focus marketing on targeted
    groups
  – Ability to get Texas real estate
       Speaking of Price………


1) Would you consider retiring to these
   developments if the price of housing there
   was extremely inexpensive?

2) How much do you think the homes being
   built in El Paraiso cost? (Take one last
   look)
Thank You!