Mexico's repeated devaluation of the peso is having a devastating impact on the condominium market in some parts of the United States.
A little more than a year ago, San Antonio real estate agent Gail Gilliam was capitalizing on an unprecedented flurry of Mexican condominium buying that seemed likely to turn into a bonanza.
Ms. Gilliam advertised in Mexican publications, hired a Spanish-speaking representative, and courted other real estate agents and investors from south of the border. She ran what was, for a time, San Antonio's only real estate agency dealing exclusively in condos.
And Mexicans were buying them fast, particularly luxury units - some built and others still in the planning stages.
''I'm planning on making a lot of money from Mexico,'' she said at the time. ''A whole lot.''
That same summer, San Antonio developer Kenneth Milam was about to start construction of a 23-story luxury-condominium tower. A twin was to join it by the end of 1982, both containing units ranging from in price from $60,000 for a studio to $525,000 for a penthouse.
More than 40 percent of the towers were bought by foreign investors before they were even begun, including some by ''pretty high-level folks in Mexico,'' whom Mr. Milam declined to identify.
Other Latin Americans were involved, he said at the time, noting that ''there's nervous money from the Rio Grande all the way to the Panama Canal.''
Now, in the winter of 1982-83, Mr. Milam's second tower has not even been started.
''My (Mexican) buyers are not buying,'' he says. ''They're unable to get their pesos out of Mexico. The ones still buying are having trouble meeting their commitment.''
All across Texas, the condos which Mexicans bought so eagerly in 1981 and before are crowding, hence depressing, the resale market. Construction once galvanized by the peso's northward migration has slowed and, in some cases, stopped in mid-construction.
Mexico has devalued the peso three times this year and just this week let the currency float to what had been the black-market rate of 150 peso to the US dollar. At the same time a fixed ''preferential'' rate of 95 pesos to the dollar was set for for vital imports as well as for interest payments on foreign debt.
Black-market dealers have been capturing the few dollars that were still coming into Mexico.
All of this means that a Mexican must be much more wealthy in order to afford what they could a year ago.
Moreover, Mexico's inflation rate for 1982 is approaching 100 percent. Given a foreign debt of $81 billion, believed to be the world's largest, Jesus Silva Herzog, the Mexican finance minister, is predicting an austerity program that he calls ''terrifying,'' but for which ''we don't have any alternative.''
Perhaps US developers should have foreseen Mexico's huge devaluations, Milam says, because ''oil is the only export of any magnitude they have. With the collapse of the worldwide oil market and the interest due on Mexico's public debt, people began to see there was no way that Mexico's petroleum production was going to pay the country's debt.
''They had mortgaged its oil production for 10 years into the future, thinking that everything was going to continue on the same upward plane,'' says Milam. ''It didn't.''
With the devaluations, ''the Mexican trade has decreased 90 percent,'' Ms. Gilliam says of the San Antonio condominium market.
Mexicans preferred condominiums to commercial property, because they wanted homes here or, in some cases, safe havens. And they preferred them to single-family dwellings, because maintenance was taken care of. Ms. Gilliam says San Antonio was especially favored because of crowding in Houston, the greater distance from Dallas to the border, and California's high costs.
''After last February's devaluation, that's when it started getting slower and slower,'' she adds.
''Then in August, when they devalued again and then nationalized the banks, it just about died. There was a lot of building due to the fact that there was so much of a Mexican market. There are so many condos in San Antonio now, there's some kind of glut.''
Complicating matters was the Mexican government's demand that Mexicans sell their property abroad and bring their money home. Maintaining contact with clients has come to resemble international intrigue as a result.
''If I have to send anything to Mexico, it's in a plain white envelope. They hate to talk on the phone, because they're afraid it might be tapped, Ms. Gilliam says.''
In Houston, brokers report drastic markdowns on Mexican-owned condos of from
At South Padre Island, the popular Texas coastal resort, Mexicans had bought 40 percent of the condos, says Robert Pinkerton, a real estate agent. Of the units up for sale, about two-thirds are owned by Mexicans, and they are moving slowly despite discounts of up to 25 percent.
So far there have been no foreclosures, according to Houston mortgage bankers , but the real impact may not be felt for months, because many buyers deposited up to a year's worth of payments in US banks before devaluation.
Texas apparently was hardest hit, because of the sheer volume of Mexican buying in the state, but other states have felt the effects of the Mexican devaluation.
Surprisingly, New Mexico and Arizona are not among them, despite their proximity to the border, while in Colorado and Utah the peso raced to the resorts, real estate brokers say.
Dave Cole, real estate agent in Vail, Colo., puts the Mexican presence in the ski town's condo market at 10 percent and holding steady. The only panic selling , he says, has been in ''some very irresponsible and inaccurate newspaper reporting.''
Mr. Cole says he is aware of only one instance of payment problems in several hundred Mexican purchases.
Even so, he says there is pressure to sell, but its source is Mexico City. ''The government is clearly trying to accomplish that, but I don't expect it to. I think wealthy people can circumvent that in a number of ways.'' Mr. Cole declined to specify strategies.
''I don't want to give the government any ideas,'' he adds.
In Utah, Mexicans made their way in force to Park City, which was a mining town until the silver ran out. It is now a ski resort where the once-abundant peso is running out, says Carol Thompson, a Salt Lake City real estate agent.
As devaluation loomed, she says, ''these old families that have money from hundreds of years ago saw this thing coming. Park City has buyers on a grand scale who were desperately trying to get their money out of Mexico. Their money has dried up, and so Park City has not enjoyed the rich life it had been known to have. There's no Mexican market here now.''
So far, the resort, 35 miles from Salt Lake City, has not seen any panic selling and property values continue to rise, she adds, thanks in part to this year's early snow which brought early renters for a lengthened ski season.
At the same time, she notes, at least one condo project was stalled when the Mexican buyers vanished, leaving it with ''bare bones - there's not even a model per se, but just plywood floors and some sheetrock up. (The developers) really lost their shirts.''
For nearly a decade, Mexicans were active in California's luxury condo market. But beginning in 1979, the state lost many investors, particularly to Texas, says Thomas Gilleran, a Los Angeles condo specialist.
Of the remaining buyers, he says he expected foreclosures and distress sales, but neither has occurred to his knowledge. However, ''Mexican buying has stopped ,'' he says. ''Contacts in Mexico have dried up, the flow of money into the US has dried up, and everyone's insecure about what to do.''
Despite the grim present, Mr. Milam and Ms. Gilliam say they are optimistic about the future of San Antonio, where plunging interest rates appear to have strengthened the market. But neither sees Mexican investors making a comeback soon.
''I've been selling condominiums since 1979,'' Ms. Gilliam says. ''I've asked people from Mexico why they were buying, and they said you never know what might happen.
''The smart ones were thinking about it a long time ago.''