Lake Chapala Vicinity Housing Prices

(Aug 2003 compared to July 2005)

Many visitors to the Lake Chapala area are sufficently taken by the fine climate and friendly atmosphere that they consider moving here permanently, particularly after retirement. What would it cost? For most people, the single biggest expense is housing, so we will examine that here. For other costs, see our list of typical expenses.

The best advice for any newcomer is to rent before you buy -- the various neighbourhoods in this area differ vastly in character, you need time to find what suites you best. Some areas are known to have problems with water supply, others have foundation problems due to unstable subsoils. Unfortunatly, rental homes are getting very expensive and there are not a great number of them available, but don't let that deter you from taking your time to choose a house you can live with.

Two to three years ago the level of the lake was very low and people were moving away, leaving a great many of opportunities to purchase beautiful homes at bargain prices. Today, the lake is nearly full and demand is greater than ever, so prices are up as well.

In an attempt to quantify this change in circumstance, we decided to do a brief study of housing prices. To make the comparison as equitable as possible we decided to use a local English-language monthly periodical (the Ojo del Lago) and compare realty advertisements in two issues, Aug 2003 and July 2005. This is by no means a scientific survey, but the arbitrary sample of housing prices is probably fairly representative, with certain caveats.

First, you must remember that prices shown are asking prices. Unlike the U.S., prices actually paid are not public information, so the best we can do is compare asking price. For rental prices, almost all of the listed prices are for rentals managed by realty companies. Naturally, these companies charge a fee to manage property, which tends to inflate the prices charged, and also to selectively exclude lower priced properties which are generally owner-managed. Finally, our method of selection gave us relatively few examples to work with, so there is some random bias due to small sample size. For example, the August 2003 list did not include any homes selling for more than one million dollars U.S. There certainly were homes in that price range available in 2003, it is just that none happened to be listed in the August issue of Ojo del Lago. There is also the problem of typographical errors, such as the two houses listed in the July 2005 issue: one shows 3 bedrooms and 3 1/2 baths, the other 5 bedrooms and 3 baths -- but both show the same photo. Nor do the property sizes agree. We tried to catch and eliminate these sorts of problems.

Results

All prices shown are in U.S. dollars. Most of the advertised prices are in U.S. dollars in the English language paper, the few that were in Mexican Pesos were converted to U.S. Dollars using the prevailing exchange rate. In August 15, 2003, that was 10.73 pesos per dollar, in the same range as today's echange rate of 10.70 pesos per dollar, which was used for the July 2005 prices. Do not let those figures fool you into thinking the peso is stable -- it reached more than 11.5 pesos per dollar in the intervening months, but has been going down again primarily due to high oil prices (called Mexico's second largest export -- after people).

In August 2003 we found 63 houses and condos for sale, and 43 houses and apartments for rent. The average asking price to purchase was $199,425.97, with the median price $164,000.00. The average rental price was $547.93 per month, with a median price very near the average at $550.00. The graph on the right shows the number of houses or condos offered for sale in each price range (click on it to view full sized graph).

In July 2005 we found 105 houses and condos for sale (66% increase), and just 17 houses and apartments for rent (60% decrease). The average asking price to purchase was $275,723.06 (38% increase), with the median price $200,000.00. The average rental price was $684.41 per month (25% increase), with a median price of $650.00. The graph on the left shows the number of houses or condos offered for sale in each price range (click on it to view full sized graph).

In future articles we will take a closer look at some of the popular neighborhoods, and look at the pros and cons of relocating there. If there is much change in the prices, perhaps we will update the above information with additional figures from the months to come.