"We
Can’t Afford to Live in the States Anymore."
We’d
just finished dinner with a couple of friends. They’ve
decided to buy a house in Honduras, where we live, and move
here permanently.
“Health
care and insurance costs alone are killing us. Add property
tax, and it’s too much…especially when you consider
that the value of our house in the States is falling fast.”
I have heard
this a lot lately.
Real estate
prices in the U.S. are becoming more attractive thanks to the
huge dose of reality injected into the market by the mortgage
bubble burst.
But people
still keep shopping in Mexico, Honduras, Brazil…throughout
Latin America. Throughout the world.
“It
doesn’t make any difference if you can now get a great
deal on a place in the States,” another friend recently
said. “You still can’t afford to live in it. And
you sure won’t make any money on it in the near future
if you try to sell it.”
Outside
the States, we’ve seen real estate prices in almost every
market appreciating 10, 20, 30, even 50 percent a year for the
past decade.
It’s
a big world, and most things in it are relative. Even if the
global cost of living rises 50 percent in the next few years,
there will still be places on the globe where the cost of living
is 50 percent less than in the States.
And with
no real help in sight for rising taxes and health care and insurance
costs in the U.S. (does anyone really believe the insurance
and medical lobbies will allow universal health care?), smart
folks will do the math and move to where the money they’ve
managed to keep for themselves will go the furthest.
And that,
I believe, will help support property prices in the places they
want to escape to…places like Mexico, Honduras, Brazil,
and others.
Not that
Suzan and I plan to flip our place in Honduras anytime soon.
We’re having way too much fun here…not the least
of which is having dinner with new friends.
But I don’t
see the value of our property slipping 30 percent in a year,
which is exactly what we’ve seen in markets like Florida
and California lately.
I expect
the value of our properties abroad to stay steady, especially
as the global economy gets worse. We live and have invested
in places that make sense from a cost of living, climate, and
convenience point of view. And as more and more people finally
realize that they have options other than just sitting where
they are and watching their money drain away, I expect we’ll
have many more dinners with new friends shopping for a better
life in Honduras and other prime locations around the world.
Stay happy
and healthy,
John Ainge
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