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Why Baja California and why now?

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When one of the most decorated jockeys of our time, Willie Schumacher, was asked, "What's your secret to winning so many races?" he replied, "Sometimes it's just the horse you ride."

Over the last several years, fortunes have been made in the U.S. real estate market because investors were riding a winning horse. Great horses come and go, but there will always be another race. Likewise, there will always be another great market. The key is to identify where and when.

Real estate professionals in Southern California understand that it's time to send their current horse out to pasture and look for a new race. Fortunately, we don't have to travel far, because a great race is about to start in Baja California.

Some have referred to it as a perfect storm -- the simultaneous occurrence of events that become exponentially more powerful as a result of their chance combination. Such occurrences are rare by their very nature, but when they occur in the business world, fortunes can be made overnight.

As we speak, a perfect storm is brewing in the Baja California Real Estate sector due to the convergence of several potent market drivers. The result has been annual appreciation in excess of 30 percent, with no signs of slowing. The coastal region between Rosarito and Ensenada has been experiencing explosive growth and supply has not kept up with demand. Thousands of condominiums are springing up on the waterfront, and most are sold long before construction is complete. So what exactly are these forces?

Changes in government policy: With thousands of miles of coastline, land is Mexico's No. 1 asset and tourism its top industry. The country's incoming president is pro-development and actively promotes foreign real estate investment. Furthermore, it's now legal for foreigners to take fee simple title through a bank trust called a Fideicomiso.

U.S. financing and title insurance: A handful of major lenders recently began making mortgages available for foreign-owned Mexican homes. These new loan programs are a result in part of the availability of title insurance from companies like Stewart Title.

Location: Northern Baja is the only place in the world where undeveloped oceanfront property with a Southern California climate is still available, and because most destinations are 30 to 40 minutes from the United States, buyers are snapping up housing at a record pace.

Affordability: Comparable coastal properties in California are priced four to five times higher, making the Baja oceanfront a far more viable second home choice.

Demographics: The wealthiest generation in history is the primary group driving the Baja market. Baby boomers are nearing retirement and their disposable income and active lifestyles make Baja the perfect second home choice.

Perhaps Shakespeare said it best: "There is a tide in the affairs of men, which taken at the flood, leads on to fortune."

U.S. companies like Baja Residential are staking their claim for a piece of the massive pie. "The opportunity is right in front of us and we're taking action," said James Bogle, vice president of broker relations. "I don't want to wait around and hope for another perfect storm."

Shakespeare would agree.

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