Baja123.com Mexico Real Estate Blog

Nest egg can bloom South of the border

Mexico, Costa Rica and Panama are among the countries seeing an influx of U.S. expatriates seeking relief from the housing crisis - the worst since the Great Depression - and soaring prices for food, gas and health care.

"I think people are fed up with the U.S.," said Suzan Haskins, the Latin America editorial director for International Living Magazine, who lives in Merida, the capital of Yucatan, Mexico.

"Those of us who are baby boomers have always been adventurous. ... And Latin America is definitely a less expensive place to live."

"For people with some financial assets to draw on, this is a good time for them" to move abroad.

The trend is likely to continue as baby boomers - those born between 1946 and the early 1960s - hit retirement age and look for a locale where their nest egg will pay for the quality of life they desire.

According to the U.S. census, 72million people will be 65 and older by 2030 - roughly double today's total. Today's seniors are also healthier and better educated than previous generations, and their financial circumstances have improved dramatically.

And they are, apparently, more adventurous as well.

A 2006 analysis by the Migration Policy Institute, a nonpartisan think tank, found that the number of U.S. citizens seeking pensioner visas to live in Panama more than tripled from 2003 to 2005.

In Mexico, the number of U.S.-born seniors jumped by 17percent from 1990 to 2000. Among the cities with the fastest growth of the senior population were established expatriate retiree communities: Chapala (up 581percent), Los Cabos (308percent), and San Miguel de Allende (48percent).

Here's a rundown of a few of the top destinations for Californians, and what's happening there now.

Mexico

With its proximity to the United States and cheap living expenses, Mexico has consistently ranked near the top for expats from Los Angeles.

Despite suffering some spillover from the housing market slowdown and headlines about the criminal element, Mexico's Baja region is still a great place to retire, said David Biondolillo, who lived in Burbank for 40 years before moving to Rosarito Beach in 2006.

"This morning I was on the beach at 7a.m. taking a walk. I paid $2.63 for a gallon of gas," said Biondolillo, who moved with his son and 86-year-old mother.

Semiretired, Biondolillo owns Baja123.com, a realty company for Americans seeking to buy real estate in Baja.

He said homes and condos in the area start in the mid-$300,000s, with ocean-front homes selling for $700,000, rather than the millions they would fetch north of the border. Closing costs tend to be higher in Mexico, but property taxes are dramatically lower.

While Mexican real estate has traditionally been a cash business, he said, that is starting to change.

"Three years ago, there wasn't the financing available that there is today. You can come down now with 20 to 30percent down and get a mortgage."

Central America

Panama, El Salvador and Ecuador have a dollarized economy, which provides a cushion against a weaker dollar (which has made retiring to Europe even harder for Americans as the dollar has weakened considerably against the euro).

The bottom line is the cost of living is very reasonable.

"Going to the doctor is $30; a haircut is $5," said Haskins, the magazine editor, who in the past seven years has lived in Ecuador; San Miguel de Allende and Merida, Mexico; Panama and Nicaragua.

She also points to low property taxes and great tax breaks as big pluses for people targeting Central America. Panama just extended its property-tax exemption law for retirees, which was due to expire last year.

Biondolillo, the former Burbank resident now living in Mexico, said the change in the demographic landscape is visible.

"This used to be where kids came for spring break," Biondolillo said. "Now, there's a transition, an evolution.

"The kids have all gone somewhere else. The `kids' here now all have white hair."

There are many reasons why it makes sense to retire to Costa Rica.

But the primary one is simple: My wife loves this place.

And if you're a smart man, that's reason enough.

We lived for 20 years in the San Fernando Valley, in the hills overlooking Universal Studios.

And we had vacationed in a variety of ways - car trips, cruises, you name it.

We had been returning to Italy for late-summer vacations, usually celebrating our September wedding anniversary there.

Positano on the Amalfi coast became our favorite destination, Le Sirenuse our favorite hotel.

But prices escalated, especially after Italy converted to the euro, and it got to the point where a night at Le Sirenuse averaged close to $1,000.

Way too much for our wallet.

My wife did a bit of research and came up with an alternative: Costa Rica.

So a few years ago, we flew to the capital of San Jose, rented an SUV and drove west, stopping at various tourist spots and beach resorts.

First of all, we noticed the unaffected friendliness of the Costa Rican people.

Then we found out how far our money went.

Interestingly, we discovered that dollars were accepted just about everywhere, though the national currency (the colon, approximately 500 to the dollar) was always given as change.

But money aside, we were immediately struck by the natural beauty of this little eco-minded Central American nation.

It's a never-ending palette of amazing hues.

The birds and butterflies are extraordinary. Rarely does one see any dull or muted-toned ones.

Traveling around, there's a constant awareness of their existence. We lost count at how often one of us exclaimed, "Look at that bird" or "Look at that butterfly."

Equally startling, especially once the "green" or wetter season begins, is the plethora of blazing flower colors set against the rich greens of the general landscape.

Surfers abound here. The deep-sea fishing draws the rod-and-reel set.

Snorkelers, hikers and naturalists get their fill in Costa Rica.

And so we came back.

Again and again, finally purchasing a small condominium in the northwest province of Guanacaste in the beach resort town of Tamarindo.

My duty to my aging parents, both in their late 90s, kept me from moving somewhere far away.

And my wife continued to work. It seemed that every time she would attempt to cut back on her responsibilities, another recruiter would make "an offer she couldn't refuse."

But in August, both my parents died.

In due course, we put our home up for sale and hoped for the best in a rapidly declining real estate market.

Luckily, we found a buyer, though the sale price was considerably less than we had originally figured on.

And earlier this year, we moved to Costa Rica - first to our little condo, now to a house.

In a country known for its political stability.

Living relatively well on pensions.

Certainly better than we could on full retirement in Southern California.

And enjoying what could be termed an indefinite vacation.

Nothing wrong with that, eh?

Larry Lipson worked 50 years at the Daily News as restaurant critic, reporter and wine columnist. He retired in February.