The following article appeard the the local Sahuaro
ROSARITO, Baja California
For more than a decade, the high-rise tower at
Calafia Resort and Villas was an empty shell, a stark
reminder of oceanfront dreams gone sour. Built on the
northern Baja California coast shortly before the peso
crash of 1994, the project couldn't find any buyers. Over
the years, rumors abounded: The developers had gone broke,
the tower was leaning. Calafia's owners denied those reports,
but it didn’t matter. Even at deeply discounted
prices, the developers couldn’t sell the condos
with their floor-to-ceiling walls of glass and wrap-around
balconies featuring 180-degree views of the Pacific Ocean.
now Luis Maizel and his partner Igal Gordon have nearly
sold out the first Calafra tower, where a two-bedroom
unit costs US$265,000, more than double the price of two
years ago. Three-quarters of the 48 condominiums in the
16-story second tower are sold. And they are about to
begin construction on a third tower, one of several dozen
oceanfront high-rises that are being built along the 68
miles of rugged coastline between Tijuarta and Ensenada.
After years of languishing behind its more glamorous southern
cousins - the twin resorts of Cabo San Lucas and San Jose
del Cabo - the northern Baja peninsula is coming into
Long considered a weekend party town for southern California
students and a low-rent getaway for U.S and Canadian retirees
on a budget, the northern Baja coastline is undergoing
a real estate boom aimed primarily at Americans who are
tapping their equity back home to buy a weekend getaway
or retirement home south of the border. These aren't aging
surfers seeking beachfront shacks or Midwest retirees
fleeing the snow in their Winnebagos, though those folks
still come here in large numbers. Real estate agents say
at least 80 percent of the people buying today on the
Baja coast are baby boomers who are spending US$300,000
and up to purchase high-rise oceanfront condominiums and
large, single-level homes with room for kids, dogs and
By cashing out on one of the United States’ biggest
home equity booms in history some of Baja's newest residents
are trying out early retirement. For Beth Bermiss and
her husband Henry Suri, life had become a tiring whirl
of long workdays and social obligations. So last year
Bemiss, 55, owner of a small interior design company,
and Suri, 51, a holistic health practitioner, decided
to take advantage of the Southern California real estate
boom and head to Costa, Rica. Their San Diego condo, whose
value hod skyrocketed to U.S$1 million, sold faster than
anticipated. On a whim, they decided to spend a month
in Baja while they closed up their businesses and said
their goodbyes. After a few weeks of lazy days in the
sunshine and exploring the Baja coast, they were hooked.
They still went-to Costa Rica for two months, but they
decided that Baja was less hot and humid and closer to
Last April, they bought a two-bedroom ocean-view villa
at Calafia for $190,000.
With their kids grown and expenses low, Bermiss and Suri
figure they can live off their savings. Food and utilities
are cheap, the surfing is free and they can enjoy a nice
salmon dinner at a restaurant for less than US$15. They
make occasional trips to San Diego, mostly to stock up
on health food at Trader Joe's. And though they lock their
doors and watch where they drive after dark, they said
they felt as safe in Baja as in San Diego. "I sleep
much better here than I did in the. States,".Suri
said. "I go to bed at night listening to the ocean
and we're woken up by the birds in the morning and not
the helicopters and traffic."
There are also serious risks to foreign real estate
ownership. Some still recall the photos of U.S. citizens
being evicted from their homes on the Punta Banda peninsula
south of Ensenada in 2000. Mexico's Supreme Court ruled
that the land did not belong to a farmers' collective
that leased the parcel but rather to several private parties.
Under the Constitution, foreigners are prohibited from
owning land within 30 miles of the coastline or 60 miles
of the border. But the process of buying land in Mexico
has become much easier. Foreigners can now purchase property
through a Mexican bank trust known as a fideicomiso and
title insurance is available through companies such as
North American Title Co. and Stewart Title Guaranty Co.
"Mexican developers often presell their projects
and then use the down payments to finance their construction",
warned Kathy Katz, a real estate agent who works for Calafia.
"If those developers get into trouble, they might
slow down construction or even abandon the project.''
Katz advises buyers to make sure that the developers place
deposits in escrow or take out a contruction bond to protect
Foreigners have traditionally paid cash for their real
estate because until recently there were few institutions
willing to lend money on residential real estate in Mexico.
But in the last year a number of U.S. firms including
First Capital Mortgage, GE. Capital and C.S. Financial,
have begun offering mortgages to U.S. citizens buying
in Mexico. Jeff Seabold, president of C.S. Financial,
which has offices in Puerto Vallarta and La Paz and is
about to open an office in northern Baja, said his firm
had 40 Mexican loans being processed.
"We think the [market] is going to explode,"
It already has. The transformation of northern Baja is
taking place with lightning speed. The toll road from
Tijuana to Ensenada is lined with billboards promising
ocean front views and sandy beaches at a discount and,
bulldozers are as common as palm trees along the rugged
"Ocean View for Sale, House Included," reads
Real estate developer Gabriel, Robles, who is developing
a 611-acre housing project north of Ensenada called Ventana
al Mar, said he was recruiting Mexican graffiti artists
to paint a colorful new entryway - "The Window to
the Soul of Mexico" - to replace the bleak garbage-strewn
border crossing that currently exists at San Ysidro.
Diane Gibbs, owner of one of Baja's leading real estate
companies, expected the Sept. 11 attacks to dampen American
enthusiasm for travel abroad instead, her phone has been
ringing off the hook with calls from Southern Californians
looking for a vacation home they can get to by dinnertime
"People from L.A. say we can be here in two-and-a-half
hours," said Gibbs, whose firm is representing seven
new developments along the Baja coast that will bring
at least 1,278 units onto the market over the next three
to four years. "That's what they like. They don't
want to fly anymore."
She said it took just 45 days to sell the eight oceanfront
homes at LasVentanas, a 38 home gated community developed
by an Irvine, CA. company. Those homes ranged from US$34,5,000
to US$890,000. Work is also underway at Porto Hussong,
a high-end condominium and housing project north of Ensenada
that is being built in the style of an early-1900s Spanish
colonial village. The Ensenada project will include a
shopping center and a 250-slip marina.
The Baja lifestyle is not for everyone. Rapid growth
is putting strains on the region's infrastructure, particularly
the water supply and sewage systems.
Stocking the refrigerator and closets has gotten a lot
easier in recent years, with the construction of the toll
road from Tijuana and the arrival of big-box stores such
as Wal-Mart, Costco and Home Depot. Cell phone service
is widely available, and a new hospital just opened in
Tijuana that is catering to Americans.
"You have to have a pioneering spirit to even consider
it," Gibbs said of Baja living. "You can't just
run down to the corner to pick up something and there's
a few little inconveniences you have to plan for."
Below are links to other articles on the boom.