Jungle Real Estate

Real estate in Sayulita, like most things here these days, is out of control. Locals say it was nuts five years ago, but now it’s reaching a whole new level.

A lot of gringos buying in right now will try to convince you that prices are only going to continue to head skyward and that there’s still lots of profit to be made in the housing sector here in Sayulita. They’ll point to the real estate values continuing to rise even during the pandemic as proof of that. They’ll also point to big luxury brands making significant investments in Sayulita.

But for the rest of us, I’m not convinced.

For one, as real estate prices head into the stratosphere, profit margins for small private actors with <$1,000,000 capital investment are shrinking dramatically. A few years back, you could still find a deal on an older fixer-upper. Those days are gone. There are simply no deals to be had like that in Sayulita. And the market is most likely in a bubble ready to burst in the next couple of years.

That’s not even taking into consideration the whole mess of titling property here in many parts of Mexico. “Deals” can still be had with ejido property (lots being sold on informal, untitled land in which the question of who owns the land is unclear). A lot of folks are grabbing up the land on speculation, in hopes that the government will work out the details at some point and they’ll see a nice return down the line. However, ejido horror stories abound in Mexico, enough to make most traditional investors wary (hence the low asking price).

And then, there’s the issue of being a foreigner. In Mexico, foreigners can’t technically own land within 50 km of the coast. Any coast. Tiny little Sayulita, of course, fits completely within that 50 km restricted zone. So what do all of the property-owning gringos do here in Sayulita? The title is held in a Mexican bank trust called a Fideicomiso, which adds a whole other level of complexity.

But it’s all worth it to snag a piece of property in paradise, right? After all, Sayulita is hemmed in by mountains, jungle, and the Pacific Ocean, making real estate here finite and even more valuable, particularly for the luxury market.

Two big problems with that line of thinking are:

Sayulita’s poor infrastructure that has not kept pace with growth and development (and likely never will) – water, electricity, internet, and waste all have major issues with reliability and availability of services (not really what you want to hear when considering pouring millions of dollars in a luxury development);
And, that the land here in Sayulita is in fact NOT finite at all.

Got jungle? To developers here, that’s just another word for prime real estate waiting to be developed, as you’ve already seen in some of our recent posts and as you’ll see more of in this one (and the next one too).

We’ve seen a number of attempts at improving the infrastructure in the short time we’ve been here. In fact, one of the big projects is located directly behind our place (lucky us). They’ve apparently been trying to dig a well for months back there, but can’t quite seem to find enough water.

Sayulita experiences major perennial water shortages, particularly in the dry season between January and June. It’s not just that there’s not enough water for everyone, but that there seems to be no real attempt to control its use through restrictions, public education campaigns, or anything else.

Big luxury villas are permitted to drain and refill their huge pools, water their huge lawns, and regularly wash their fleet of golf carts whenever they want to, then complain when the water runs out for the town.

Waste management is another huge issue. They recently upgraded the water treatment plant here in town after years of tourists complaining about getting violently ill after swimming in Sayulita Bay. But that’s just a small part of the picture.

Despite free or highly subsidized trash pickup, many residents in Sayulita still choose to burn their trash (or just as bad if not worse, throw their trash into the Sayulita River or the ocean).

When we get a significant rain storm, all of that trash makes it into rivers and streams and eventually out into the bay, which is the focal point of tourism here in town.

Again, not exactly the kind of picture you want to paint for your luxury villa guests paying US$500-US$2,000 per night or more.

And don’t get me started on internet.

One unseasonably overcast morning, Lori and I took a walk up Calle de Cielo, the impossibly steep, aptly named Sky Road. We were amazed by the number of large construction projects on top of the hill, and couldn’t help but wonder where there water comes from (water pressure from our city water tap is barely more than a trickle on the valley floor).

The biggest surprise of the morning was discovering a large, hidden subdivision etched out of the jungle. Beautiful paved cobblestone roads show where houses and condos will soon spring up. But oddly, no one’s broken ground yet on any of the dozens of lots available.

The future of Sayulita.

It’s street taco night!

We stumbled upon this guy in Centro the other day and couldn’t help ourselves. Nitro cold brew is a rarity in these parts. I’m happy to report it met, if not exceeded our expectations.

Pretty chill day today on North Beach.

Guapito (little handsome guy).

This huge palm frond fell during the night. Noe took it upon himself to do a bit of yard maintenance.

Don’t worry, that’s not a knife (though it kind of looks like). We only let our toddler run around on the beach with a butcher knife during holiday high season.

Another sunset, another attempt at a sand castle.

Barbecue night.

Golf cart’s back! Six new batteries and a new onboard charger. Sheesh.

It was a long three weeks walking Noe to and from his jungle school (or hitching rides), but she’s back and better than ever (though our wallets are feeling a couple pounds lighter these days).