But the picture is quite different in some areas here in Mexico. In Punta Mita, a growing community north of Puerto Vallarta, sales jumped 30 percent last year. St. Regis and the Enchantment group are both building residential and hotel properties there, while a second Jack Nicklaus-designed Signature golf course is set to open this year.

According to Andres Rossetto, the Managing Director of Resort Development for Punta Mita and DINE, the cost to build a home in Punta Mita is about a third of what it would cost to build a similarly high-end property in California, Hawaii or even Cabo San Lucas.

But that’s a third of the cost ‘to build’. Purchasing land is still pricey … consider that one-acre home sites in Punta Mita range from $2.25 million on up to $7.2 million for a beach front stake in the sand. And yes, that’s without the house, though the lot does include a private yacht pier.

Other properties have similarly luxurious price tags. Private villas at the Four Seasons are priced at $3.6 million (45 of the 55 available villas were sold by the end of last year), a three-bedroom condo in the El Encanto development goes for up to $1.4 million, and the next round of four-bedroom condominiums at Las Palmas de Punta Mita will start at $1.5 million when sales begin this spring.

No doubt the construction labor and material costs in this corner of the globe are lower than they would be in resort areas in California or Hawaii, but clearly this south of the border enclave, with beach front lots topping $7 million, is seeing its own American-fed real estate boom.

How this market will to be impacted by the rough waves of the U.S. real estate slowdown, remains to be seen.

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Homex hopes to sell 100 of the homes in 2008 for between $400,000 and $900,000 in its first push into the expatriate market, said Chief Financial Officer Alan Castellanos. The goal is to tap into theincreasing numbers of American retirees as the baby-boom generation looks for retirement homes in warmer climates.

The plan is a marked change for Homex, which has grown for the last decade by building and selling smaller, cheaper homes to Mexico’s poor.

The company will keep its focus on mass-produced homes that sell for less than $40,000, but with efficient building techniques could make good profits in high-end housing as well.

Homex has already bought land and obtained building permits in Cancun and in Puerto Vallarta and Los Cabos on the Pacific coast. Construction on the villas and low-rise condos is planned to begin soon.

“We’re not taking any risk on location,” Castellanos said.

Foreigners are banned by Mexican law from owning land close to the coast, but Homex plans to offer the homes under 99-year trusts.