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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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More than ever, any citizen in the world can immerse themselves through social media in global news and global politics. This is why a recent article covering the 2011 Mexican elections by PBS “Media Shift” captured my interest.

Many economist today will make the argument that Mexico is becoming an emerging economy through its rise in international exports, however many would argue the contrary. The country has witnessed currency devaluations, a surge in drug cartels and political corruptions all under the twentieth century. Today, Mexico is experiencing yet another controversial election year stirred with controversy and corruption.  The same political parties running but with a twist. There is a new party in town… and no… not a new political party. They call themselves “#Yosoy 132” and they assert themselves as being an ongoing Mexican protest movement centered around the democratization of the country and its media.  They began their movement as an opposition to the Institutional Revolutionary Party (PRI) candidate Enrique Pena  Nieto and the Mexican media’s allegedly biassed coverage of the 2012 general election. Through unconventional means, #Yosoy132 is exchanging blows at the political election with hashtags, Youtube, Facebook and they are successfully turning the heads of the global pundits.

Important to note, #Yosoy132 is not the first to flex their muscle by way of social media.  The recent Egyptian protest was made famous through a youtube video where a citizen was killed on the streets and viewed millions of times all over the world in a matter of only seconds.  The role of social media is critical because it helps to spread cognitive dissonance by connecting thought leaders and activists to ordinary citizens rapidly expanding the network of people who become willing to take action.

In brief, the PBS article does a great job of describing the events and implications of #Yosoy132 in Mexico however it leaves out an unspoken reality in today’s modern global politics.  Today’s reality doesn’t allow for public illusions to happen.  Politician’s can have the best manipulative voting strategies and media alliances but the simple truth is that today’s modern politics can no longer architect elections…

User generated content has broken into today’s global information fabric and as a result, nothing can be hidden or turned into a public media spin… for hundreds of years, elections have been manipulated through the means of media alliances, wealthy connections and so forth..

It’s today that many must beg the question… will social media finally democratize the election process?