By Timothy Scott
In San Miguel de Allende, words like “charming,” “picturesque,” and “spellbinding” sound inadequate in describing the city. Then once you go real estate shopping and step into some of the restored mansions selling for a million or more, “Wow!” is the only exclamation that seems appropriate.
© Allende Properties
There are spots around the globe that have moved from being secrets to being tourist magnets in the space of a few decades: Santorini, Siem Reap, Tallin, Jaisalmer, Antalya, Lake Atitlan, and…San Miguel de Allende. They still sound exotic, but the word is definitely out.
In the last case, thousands of those tourists liked it so much they decided to stay. They bought houses, they hired remodelers, they frequented ever-nicer restaurants, and they opened shops and galleries. You can call the result of all this either gentrification or urban improvement, but there’s no doubt that the changes have been astounding. San Miguel de Allende is surely the best-maintained, most picture-perfect city in Mexico. It’s a place where the houses stay freshly-painted, city workers scamper to pick up any dropped garbage, and there are dozens of shops filled with hand-crafted items meant to make your home worthy of a design magazine cover.
© Allende Properties
Depending on who you ask, there are somewhere between 6,000 and 14,000 foreigners living at least part of the year in San Miguel, so naturally this has driven up the price of real estate, especially in the historic center. There’s good news on two fronts, however.
First, the bursting of the real estate bubble in the U.S. has meant an average price drop of around 15 to 20 percent in San Miguel from the frothy peak as well, especially at the high end. After all, most new buyers are coming from either the U.S. or Canada and many are not as flush as they were during the boom.
The bargains are even more plentiful outside the central core. “About two-thirds of our clients are looking for a home that’s walking distance to the center,” says Philip Hardcastle, director of Realty San Miguel. “It’s harder to sell the houses that are outside of town, so the prices on those have dropped more than the ones in the historic center, in some cases by as much as 40 percent. This is a good time for someone who’s buying for the long term.”
Mexican Dream Home Details
The other big positive in San Miguel is not dependent on market timing: all this foreigner-driven building and remodeling has kept the lauded Mexican artisan tradition alive and thriving. “You can find an experienced craftsman to do just about anything here,” says Joanie Barcal, Owner-Broker at Allende Properties. “Stone carving, wood carving, custom furniture, amazing tile work—you can just show someone a photo and they’ll make it for you.”
As if to illustrate that point on cue, a few hours later Nancy Howze, Sales Manager from the Coates-Dolan agency, showed me a custom 4-post bed she had commissioned from a local woodworker. “I just gave him a ripped-out page from a design magazine and he copied this Italian company’s bed model perfectly. (Including, I might add, the hand-painted filigree details on the posts.”
In one home I visited that’s up for sale, nearly every piece of furniture was custom-made and all of the solid wood kitchen cabinets had hand-carved designs on every door. With a staggering variety of tile to choose from and workers who can install it all to your specs for a good price, it’s easy to be creative without busting the budget—or to fix up a fixer-upper without getting your hands dirty.
© Realty San Miguel
San Miguel Real Estate Guidelines
As in any real estate market there are a few constraints in play besides your budget, but there are fewer of them here than in many other expat communities. You can own property free and clear here, there’s title insurance, and there’s an escrow system for deposits. Unlike in coastal regions of Mexico, there’s no land trust yearly fee or restrictions.
You generally do have to have enough liquidity to pay cash, however, which is the main reason the market pulled back so quickly once the housing market in the U.S. stalled. There’s very little bank financing in place and when it is available the terms are onerous. At the new Vista Antigua gated community development, for example, the financing only runs five years and the interest rate is 9 percent. That’s typical.
Most of the buyers in San Miguel have traditionally been retirees or wealthy investors with multiple homes, however, so the main constraint they face in the center is historic preservation laws. It’s more complicated than this, but in general you can’t alter the placement of the original walls, rip out stone arches, or radically change the façade. So no gutting of an interior to create an American-style great room. Instead most people who move here end up making their courtyard and other outdoor spaces the main communal areas: with the pleasant high desert climate, you can spend most of the year outdoors.
In new housing developments outside the city, however, your dream home can go beyond just custom tile and cabinets. “You’re only limited by your pocketbook and your imagination,” says Nancy Howze. You can either choose from a variety of floor plans at a development like Villas de Candelaria and be all-in for well under a million, or buy a lot, hire an architect, and roll out your entire wish list for less than the price of a routine McMansion in the U.S.
In the center of San Miguel de Allende, a key location in Mexico’s declaration of independence two centuries ago, architects are doing an amazing job of preserving what makes the historic architecture special. At the same time though, they are bringing in newer elements like high-end kitchen appliances, elevators, gas fireplaces and home theaters.