Last week Kelly and I had dinner with some American friends who own a home in Mexico. They were living down here full time quite happily. When the stock market dropped, so did their income and nest egg. So now they are mostly back in the states, living in the home they had kept up there, working up there, and vacationing down here when they can.

They had thought of selling their American home but hadn’t done it yet, and now they could only clear about $30,000 if they could even sell it. So they are hanging on, hoping the real estate market will recover in the next couple of years so they can make a larger profit on that house and come on back down. I’ve heard several stories of this sort around the Lake Chapala expat community.

4 Comments from the old blog:

• At February 03, 2009 11:12 AM,  John said…

  We all wonder about where we are heading. Clearly, the excesses of the last couple of decades have caught up with us. But your final comments point the way. We can find contentment and happiness even in times of recession. Sometimes scaling down leads to a better life in general.

• At February 06, 2009 12:55 PM,  Anonymous said…

  I am grateful that we never fell into the “keeping up with the Jones’”. We never lived one day over our means and without an exit plan.

  My Sister always considered us TIGHT. She spent money left and right and thought the gravy train would never end. She is the Vice President of a large National Real Estate Company. They first lowered her salary 10% and then another 25% and she has not told me how much, but I know there was another large reduction in January. Her world is spinning and does not KNOW how to live without that kind of income. She did get out of her house and into a rental, while it could be sold.

  I have another Family Member that was the Manager of a Major Title Company and could outspend my Sister everyday of the week. She had a nice 6 figure income with gorgeous home, decorations and clothes. Her Company lowered her salary 40% in December and then her major client went bankrupt and her commissions are almost nonexistent now. She is in a deep depression, cries and throws up regularly.

  I have another Family Member that was a big Residential Builder. He saw this coming and got out RIGHT before the collapse in our area. All of his friends that did not get out, are going broke, losing their homes and cars and filing bankruptcy. He is surviving by playing Poker and trying to sell his personal house.

  I know that all of you probably have stories similar to this. Maybe a lot worse because we are in Texas and have not been hit near as hard as other states.

  Personally I do not expect this to be a short term blip. I can’t see any possible turn around for at least 2 years.

  Unfortunately I think the Lakeside area will suffer. Portfolios have been ruined and people can not sell their houses unless they give them away up here.

  Who is going to come SOB and buy houses, where there is no Medicare, no safety nets and so many stories about the Drug Cartels crime wave? They have enough fear here and it will only get worse with all of these job losses.

  Older people that own houses at Lakeside that die or need to move NOB for health and family reasons, will not be able to get all their monies out of the Mexican Houses. They will have to eventually sell for what the market will bring.

  IF your Mother/Father died, had a house in Mexico that was paid for and not being used and you were in financial trouble, what would you do? I’d sell it for what I could and get my cash out.

  I also think that you should be in possession of some CASH and or Gold or Silver coins. I do not trust the FDIC to be there when and if it all blows up in our faces. The Big Boys will have their money out before we ever know it is coming.

  Have you tried to go to the Bank and ask for a large amount of YOUR cash? I have and it took days with much complaining from the Banker! They actually ask me, ” what is this for?” I made up a story and they tried several times to talk me out of taking the money out. Even trying to make me fearful of having this money in hand. I just stuck to my guns.

  Just my dos centavos…….

• At February 06, 2009 3:17 PM,  Rosana Hart said…

  Thanks for your two centavos. We will all see how it unfolds over time.

  I have a lot of friends who are doing fine, both north AND south of the border. Plenty of people are frugal or living carefully. Yes, there are lots of people in trouble but let’s keep the perspective that lots of people are employed.

  Lack of Medicare and safety nets, and fear of drug cartels, WILL keep many Americans from considering Mexico. But I still think the climate, inexpensive cost of living, and kindness of the Mexican people are huge pluses.

  Both countries have pluses and minuses. Mexicans use credit way less than Americans, and it’s relatively rare for a Mexican family to have a mortgage. They are willing to tighten their belts and live in much closer quarters with family members than most of us would be willing to. So average Mexicans are less likely to become desperate. OTOH, they don’t have much savings.

  We live in interesting times, as the saying goes.

  Rosana

• At February 08, 2009 1:03 PM,  Calypso said…

  The financial predicament the world is currently NOT enjoying is about GREED & SELFISHNESS.

  In my mind anyone that could not see it coming was blinded by -greed -.

  Perhaps a cleansing from irresponsible behavior will be a good thing in the end.

  The way I hear it everybody’s property is worth less except the property owned by the person telling me that story ;-)

  Maybe housing will once again be about a place to live and family rather than an investment?

  There is no telling where this will all end – I hocked my crystal ball a couple months ago.