Puerto Peñasco Post

Interesting reads...

An interesting interview by Business News Americas with Claudia Velazquez, the market studies director of Softec, focusing on the Mexico real estate market.  Softec is a real estate consulting and market study firm in Mexico.

President Felipe Calderon's speech this past week submitting his new energy bill to the Mexican Senate.  The major goal of the bill is to allow state-owned Pemex to enter into joint ventures with private companies to increase capacity for deep water oil exploration in the Gulf of Mexico and to increase refinery capacity for Mexico.  Mexico currently does not possess the technology for this deep sea exploration and drilling.  As expected, the bill is running into major opposition from the leftist political parties in Mexico.

CNN International article about the same topic.

An article in the Dallas Morning News about the Mexican real estate market.  It primarily focuses on Puerto Vallarta but does relate to Puerto Peñasco.

Tianguis Turistico, the Mexican tourist promotion conference, is taking place in Acapulco this week.

A very well-written, comprehensive AZ Daily Star article about Americans turning to Mexico for health care [registration required].  This includes a discussion about U.S. health insurance in Mexico.

Carlos Slim to Provide Health Care in Puerto Peñasco (Rocky Point)

Mexidata/Frontera NorteSur are running with the story that Carlos Slim's long rumored play in Puerto Peñasco (Rocky Point) will soon come to fruition.  The following is clipped from the article in Mexidata's Media Watch section:

In partnership with Grupo Star Medica, Slim's Ideal company intends to open new medical centers in Puerto Peñasco, Sonora, and in Los Cabos on the Baja California peninsula.

And more...

With its planned medical centers in Puerto Peñasco and Los Cabos, Grupo Star Medica plans to tap into a new market segment of US baby boomers who are buying second homes in Mexico. Reportedly, sales of vacation homes in Los Cabos and Puerto Peñasco increased 30 percent and 45 percent, respectively, during the last three years.

Slim has been poking around Puerto Peñasco on several recent trips trying to figure out the right way to get involved and it appears medical tourism is where he is set to make his mark.  An article in July of 2007 [subscription required] in the Arizona Daily Star had this interesting exchange between Slim and Governor Napolitano: 

Carlos Slim, who may now be the world's richest man, noted the sharply increased costs of health care in the United States, much of that borne by the federal government in Medicare costs. Slim, who owns Telefonos de Mexico, said that presents an opportunity for Mexico to become a place where retirees can come to get medical care at a much lower cost.

But that, said Slim, will require getting Medicare to cover medical procedures done in Mexico.

"I've read that many retirees are going to Singapore to get their health treatment because they save about 80 percent in health care costs," Slim said.

"This would help the U.S. in its financial situation."

Napolitano, however, said there are too many political obstacles to that.

Similarly, she said the federal government, which finances two thirds of the cost of the Arizona Health Care Cost Containment System, the state's insurance program for the poor, would never agree to paying for medical care out of the country.

But the governor said there are some things that might be done to promote a "health care region" between the two states.

For example, she said health care workers trained in one country could be allowed to work on both sides of the border. And Napolitano said plans already at work in Arizona to put patient health records into a computer database could help provide continuity of care when Arizonans decide to get treatment in Sonora.

As I have discussed before here, acceptance of U.S. health insurance in Mexico is still the key, but I would count on Slim (the second richest man in the world) to figure out a way to solve this problem (at least for private U.S. health insurance) if he truly intends to open up a health care center in Puerto Peñasco catering to Americans.  This could be another major breakthrough for the town as it is situated perfectly for easily-driveable medical tourism for Americans.  You can drive down, get your work done and then spend a few days recuperating in a resort on the beach away from the prying eyes of your friends.

As always, the caveat "Believe it when you see it" should be stated and no timelines are given, but this is positive news for Puerto Peñasco.

Full Mexidata article can be read here.  Full Daily Star article can be read here [subscription required]. 

Puerto Penasco (Rocky Point) 2008 Real Estate Assessment (UPDATED)

It has been awhile since I have posted as things have been pretty quiet in Puerto Peñasco (Rocky Point) this winter so far.  Raul O'Farrill from OTP Trust and O'Farrill & Associates wrote an assessments of the Puerto Peñasco real estate market for 2008 in the January Rocky Point Real Estate Guide and I finally had the time to scan the article in and post it here.  It is well written and has some interesting observations about the market going forward.  I agree with him that it is definitely a buyer's market at this time and frankly is a good time for condo buyers to step into the market.  Once the second phase of real estate growth begins in earnest in Puerto Peñasco, it is hard to tell when the next true buyer's market will be - particularly considering that beachfront/view real estate in developing Mexican resort destinations has a tendency to become very valuable (see Cabo).

One potential driver of the second phase of growth I have spoke about in past posts that Raul did not mention is health care.  I regularly hear of efforts to bring U.S. level health care to Puerto Peñasco this coming year (as always - we will see if these efforts materialize).  These facilities when built are expected to be able to accept U.S. insurance and medicare.  The obvious effect of this will be a retirement boom in Puerto Peñasco.  Combining first-class health care facilities with beaches, golf, mild weather, international flights and of course great margaritas is a recipe for a strong baby boomer retirement market in the coming years.

I have posted the full article after the jump.  Click below to read (and please excuse any typos I made)...

Update:  I have received several comments/questions about this posting - particularly the part about health care and insurance.  I'll admit to not having a lot of insider information about this issue.  But I have been told of several groups that have been looking at Puerto Peñasco as an ideal place to locate health care facilities.  Their main hurdle of course is figuring out a way to accept U.S. health insurance and potentially medicare.  To clarify what I said above, from what I have been told medicare is a much larger hurdle to jump because of the facilities being located outside the U.S. (in other words, no one hold their breath on this getting approved). 

I do know that there are facilities in other parts of Mexico that have already figured out how to accept U.S. health insurance however.  During a recent visit to Mazatlan, I spoke to several people who indicated that one of the major hospitals in Mazatlan (Sharp Hospital) formed a partnership with a San Diego hospital and can therefore accept U.S. health insurance for services provided in Mexico.  I'm not sure the difficulty of forming these partnerships or the regulatory hoops that must be jumped through to get this done, but it is a potential way that future Peñasco health care facilities may process U.S. insurance.

Because of the health insurance issue, I would expect that the first medical facilities catering to Americans located in Peñasco will offer only elective surgeries that are not covered by insurance.  There is obviously a big market in the Phoenix metro for cosmetic surgery and providers would be able to provide lower cost procedures in Mexico.  One can imagine having an elective surgery and then spending a week recovering in a seaside villa before you go home to face friends and family.

Once the U.S. health insurance (and potentially medicare) issue is figured out, expect to see more U.S. level health care facilities enter Peñasco, catering to the retiring baby boomer generation.