Whither Puerto Escondido?

As we watch the local landscape turn into cityscape, we wonder who our new neighbors will be. The fields on the north side of the highway above Zicatela are being parceled out - Linda Vista is a new hillside subdivision being developed for vacation homes. But a mile away, closer to the highway, in the flat lands, lots are also being sold. The Zicatela Heights condos are priced in U.S. dollars and advertised in English, while the viewless lots are priced in pesos, advertised in Spanish and offer financing. Will lowland and highland eventually meet?

Or maybe it’s just an illusion. The lots are for sale, but are people moving in? Interestingly, in both the lowland and highland areas, prominent in the pitch is that they are great investment opportunities - buy now, sell later, or as the website for the Miramar development in Chila suggests, “Invest now and if you prefer build later - there are no time limit restrictions on building.”

Which brings us to the history of Bacocho - the oldest subdivision (fraccionamiento) in Puerto Escondido developed in 1975 by Fonatur - the national fund for the promotion of tourism. Fonatur put in streets, electricity, water and a sewage system. The buyers came mainly from Oaxaca, but they did not build. In fact housing construction did not begin until 1984 when the Puerto Escondido land trust (FIPE) started building one-story row houses. FIPE also decreed that anyone buying land in Bacocho after 1984 had to build within five years. However, this rule was never enforced, and there are still many vacant lots in Bacocho. At any given moment, a few are on the market, but most of these lots remain as assets for people who bought them 35 years ago. In Mexico, a country that has seen ruinous devaluations of its currency, land is where you park your savings. (It is not legal for Mexicans to have a foreign bank account.)

Ocean front developments also are expanding, or not. Only two years ago there were three developers in Chila (the town west of Puerto) offering the dream of resort living writ large. One folded, another is on hiatus, and only Vivo Resorts is starting to build. Smaller developments, like Costa Cumaná, east of Puerto, that do not offer “resort living” seem to fare better, with all its lots sold and new houses being built all the time.

Although Puerto is increasingly becoming both a tourist destination and a place for vacation and retirement living for Mexicans - especially from Oaxaca, Puebla, and Mexico City - the tendency is towards developing separate communities for Mexicans and Canadians. Thus the ultra-exclusive Comunidad Ecológica at the Punta of Zicatela is almost entirely Mexican, while the Vivo Resorts and Miramar Resorts have English-only websites.

Most of the new subdivisions are organized as condominiums, no matter if the properties are apartments, houses, or just lots. (See the article on condos.)

At the end of the day, there seems to be something in Puerto for every pocketbook and every style of living. $160,000 U.S. will buy you a new, two bedroom, palapa-topped row house with a killer view of the ocean at Zicatela Heights in Linda Vista, or for around the same price you can move into the older Pueblito complex next to Manzanillo beach where every house is different. Both include pools. You can get a beachfront house for $1,000,000 U.S. or buy a 3-story, 3-bedroom townhouse in Brisa Residencial, a gated community a mile west of Puerto for only 626,000 pesos (around $52,000 U.S.) OK, for that price you don’t get a pool or a view or built-in, king-sized, platform beds. However it is a planned community with a lot of green space, manicured lawns, fountains, and a huge multipurpose palapa.

A 250 sq. meter lot in Linda Vista goes for 375,000 pesos (1,500 a sq meter); while they are asking 1,200 pesos a square meter at Villa Nautilus, across the highway from the Zicatela Pemex station. Jicarito, a subdivision still in the planning stages, on the ocean side of the highway, in Jícaro, a half mile from the airport, is offering lots at 600 pesos a square meter. Of course, it will be a lot more once it is completed.

Puerto real estate values did not take a hit in 2008, as was the case with some resort communities in Mexico, nor have property values increased (with some notable exceptions) over the last few years. Most local realtors report a downturn in sales in the last two years, especially to foreigners. Unresolved questions of ownership and titles continue to be an issue in parts of the region both in the “contested zone” of the municipalities of San Pedro Mixtepec and Santa María Colotepec, as well as in the Bajos de Chila. What effect the new highway to Oaxaca will have on real estate or housing construction is anyone’s guess.

by Barbara Joan Schaffer

Brisa Residencial, 4a Norte corner 1a Poniente 954 582-0611
Jicarito, Fenix Inmobilaria, 1a Poniente corner 4a Norte 954 582-0262
Linda Vista, Zicatela Heights, Aragón, 4a Norte corner 3a Poniente 954 582-0262
Miramar, Mexicanlandsales.com
Villa Nautilus 954 123-6363

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