The Exodus Trend: The Latino Search For Real Estate

It was just a few years ago that the whole country had suffered from the biggest housing bubble in our country’s history.  It was in 2008 alone, that the United States government allocated over $900 billion to special loans and rescues related to US housing.  All told, roughly four million families lost their homes to foreclosure between the beginning of 2007 and early 2012.  Today, the housing crisis is still is a heart wrenching topic for middle class Americans, but not not a negative one for those rich foreign investors living south of the border.

In 2008 and 2009, the city of Miami experienced unprecedented condo foreclosures that it closely resembled a luxury war zoneToday, Miami which was once one of the hardest hit US housing markets has been reignited by foreign cash.  Miami, which has long been considered the gateway to Latin America is currently the international buyers paradise.  Across the city, home and condo sales jumped by a record 46 percent last year, the Miami Association of Realtors reports.  Their motivation and rationale to purchase homes in the U.S.? Unbelievable low real estate prices, close proximity and easy access to  Latin America and a city that embraces the Latino culture.  However, for domestic American’s, Miami’s real estate situation has been nothing but a hopeless nightmare but for Latin America’s affluent, it’s an economic opportunity and a bargain.  Interesting to identify, this foreign exodus and real estate phenomenon isn’t only trending and isolated in Miami, but in many other important Hispanic DMA’s.

Just 1100 miles west of the city of Miami, the city of Houston is also experiencing an explosion of foreign Latino investors.  It compliments the migration trend for what I have coined the “Mexodus”.  In contrast to the Miami foreign real estate explosion, affluent Mexicans are not being driven by real estate bargains but by safe haven opportunities.  The desire from affluent Mexicans in moving to Texas are out of a result of Mexico City’s woes of crime, pollution, and escalating cost of living and political problems.  A good example where this phenomenon is taking place is in the city of Woodlands Houston Texas.  According to Nathaniel Karp, chief U.S. economist with the Woodlands-based BBVA USA, Affluent Mexicans living in Woodlands, made up 7.7 percent of The Woodlands population of 65,744 last year.  Image

But beyond real estate and housing implications, this is an interesting phenomenon that is taking place.  The United States has historically witnessed a certain type of immigrant demographic for the past 50 years.  Historically, immigrants that have come south of the border have come from low income, low education, and rural backgrounds.  If this affluent Latinos exodus continues, we could be witnessing a complete demographic transformation of the immigrant profile.

In retrospect, the U.S. could be positioning a perfect storm of reasons for affluent Latino Americans to move to the U.S.

  • Great real estate bargains and business opportunities
  • Safety for their families from kidnappings
  • Access to great Universities for their families
  • Close proximity to relatives via air or technology (Skype)

If the country continues to experience slow economic growth and Latin American countries continue to experience increases in kidnappings towards the affluent, the U.S. will be their ideal location to settle.  This in effect will have direct implications on the U.S. culture, economics, and bilateral business evolution which will be propelled by communication technology.  All in all, the U.S. could eventually become the center of gravity for the affluent Latino American class.

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