Loreto…Mexico's Next Housing Boom

We’ve all heard of Cancun, Ixtapa and Los Cabos, but where the heck is Loreto? Loreto is a fishing village situated on the east cape of Baja California Sur. The town is small and the area is relatively undeveloped. That won’t be the case much longer though as the Mexican federal tourism agency Fonatur has cast its eye towards Loreto.

Considered the Florida of the west coast, Baja has offered affordable real estate prices for years. Now, with out of sight US prices and more popular Mexican destinations at a premium, Loreto is definitely worth a look. The small town was the recent recipient of more than $200 million for infrastructure improvements. In Baja, infrastructure is the key to success and with Fonatur’s help and money many believe Loreto’s future will mimic that of Los Cabos and other Fonatur projects. With Fonatur’s backing the area is sure to become the next Mexican Hot Spot and investors and second home buyers should consider the outcome of Fonatur’s past projects as a forecast for Loreto’s future.

The city has a regional master plan that includes a future hotel district, shopping areas and new housing. Recent improvements in Loreto include a new International Airport as well as a marina, two hotels and a golf course. A new state of the art hospital is nearing completion also.

Despite the vast improvements in Loreto there are still fewer than 20,000 residents and real estate prices remain affordable with home prices ranging from $130,000 and up while land can range from $40 to $200 a square meter. New construction costs average $75 to $80 a square foot while renovations can be slightly higher. For many considering a second home or investment property these numbers are attractive.

For the true speculator Loreto offers the security of a well planned and financed project with an added twist as a faltering US real estate market affects Mexico. The smart money however feels Loreto has strong and reliable backing, making Loreto an almost sure bet for the next real estate boom in Mexico.