Pulte Homes' recent sale of its Mexico operations occurred as the country's housing policies seem to be creating a more-robust mortgage market. “There is significant liquidity there. We're bullish about Mexico,” says Ira Schulman, a principal at Chicago-based investment firm Waltham Street Capital, which bought Pulte's assets for an undisclosed sum.
Pulte Mexico, the country's seventh-largest builder, closed 7,200 homes in 17 markets in 2005. It controls more than 32,000 lots, according to president Juan Carlos Diaz, who will remain in that capacity, and Schulman says that Waltham will provide capital “to accelerate the use of that land bank.” Diaz says that Pulte Mexico—which will keep its name for the time being—is moving toward higher-priced homes ranging between 300,000 and 350,000 Mexican pesos (US$31,590 to US$35,300), up from its average price of 200,000 pesos.
Mexico's chronic housing shortage has been attributable partly to a virtually nonexistent secondary mortgage market, but the private sector has been getting into the act more aggressively of late. Mexico's largest home finance company, Hipotecaria Nacional, intends to make 51.2 billion pesos (US$4.9 billion) in mortgage and construction loans in 2006, a 35.8 percent increase over 2005. And nondepository mortgage banks known as Sofoles are vital secondary providers. (Reuters reported that Pulte sold its 22.2 percent stake in a Sofoles called Su Casita to the mortgage company Hipotecaria Su Casita for an estimated $50 million.)
Pulte, which hired Deutsche Bank a year ago to find buyers for its Mexico division, says it pulled out of Mexico because growth opportunities were more fertile in the United States. Pulte spokesman Mark Marymee says that “there's more than enough business here for us to focus on.”
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