While volunteers watch the U.S. side of the San Diego border to discourage undocumented crossings (with protesters alongside), legal entries bog down with more than one-hour crossings creating more than $1 billion annual revenue loss to San Diego.

What irony! While poor Mexicans attempt to enter the U.S. illegally in search of menial work and legal entries hampered from crossing, developers in Mexico, Canada and the United States are investing billions of dollars for exclusive sales to U.S. and Canadian citizens in Baja California. Sales are brisk.

The Baja peninsula houses two states — north and south. Both states have two coastlines — the Pacific Ocean on the west and the Sea of Cortes on the east. This prime land is target of development we first noted here with a May 2001 column that dealt with Mexico’s Escalera Nautica.

Economic disruptions prevented the Mexican government from funding the amounts originally contemplated and examined in our “Day-Tripping Baja By Boat” report, but the plan did attract the significant interest of real estate investors. And though more austere, Mexico is still financially committed ($77 million) to the project, which has seen its name change to Mar de Cortes.

On the Pacific Coast closest to San Diego, progress was significantly slowed by some negative events At Punta Banda, just south of the Port of Ensenada, the land sold and offered to Americans was found to have previous ownership. Questionable purchases of ejido land, particularly in Rosarito Beach, by influential Mexican developers are another problem. These events brought to the forefront the potential high risks facing end use purchasers who failed to do things “by the book” and, for the most part, did not obtain legal counsel to guide their purchase.

So what’s changed?

By far the most notable change has been the emergence of U.S. companies offering title insurance in Mexico. While several are in the arena, Stewart Title Guaranty has taken the extra step of complying with Mexican investment and bonding laws and requirements, incorporating Stewart Title Guaranty de Mexico, S.A. de C.V. and opening offices in various cities in Mexico, including Tijuana. The firm has the distinction of being the first — and to date the only — U.S. title guarantee company in Mexico. Plus, its fiduciary status allows it to act as an escrow company, thereby eliminating one more risk.

The second notable change is the growing sophistication of U.S. buyers. Maybe the Punta Banda debacle finally got through. In addition, we have continually stressed the importance of obtaining legal counsel. The suggestion is still solid, and from reports, more and more U.S. buyers are doing so. In fact, a better suggestion, particularly if investments are contemplated, is for U.S. citizens to obtain U.S. legal counsel with expertise in Mexican law and relationships with Mexican attorneys.

The third notable occurrence is the emergence of major and reputable Mexican, U.S. and Canadian real estate developers entering the field in Mexico, joining many who have for years performed in accordance with rules and regulations.

So what’s going on?

On both coasts along the peninsula real estate developments are in the works. The Tijuana to Ensenada corridor alone boasts more than 80 developments of various sizes under construction. The most ambitious is Ventana al Mar (Window to the Sea) a long-term 2,300-unit housing and condominium project that broke ground July 12. Also of note is Jack Coskey’s Residences at Playa Blanca with condominiums and a hotel.

Prices along the Tijuana-Ensenada corridor are still a bargain compared to the U.S. and the Sea of Cortes coastal properties. Residences and condos range from $140,000 to $500,000, with a few selling for more than $1 million.

The Sea of Cortes, particularly in Baja California Sur’s Loreto Bay, is where $2 billion in investments are being made by U.S. and Canadian real estate investors. In 17 months sales at the 7,000-acre Loreto Bay project exceeded $100 million, $30-million at an average house price of $350,000.

In San Felipe, B.C., the El Dorado development that has been on a roller coaster for years, seems finally to be getting its act together. Also on the Pacific side, the first of the major developments, Baja Mar, is showing signs of revival as Roberto Valdez is working with competent and experienced developers again.

Mexico’s National Fund for the Promotion of Tourism (Fonatur) projects total investment along both sides of the Sea of Cortes will surpass $8 billion within 14 years. If that’s the investment, how much more will it generate?

All the projects mentioned above and many others have something in common — they all offer title insurance. The cost, which runs between 0.5 percent and 1.5 percent of the sales price, is a bargain considering the alternative. So remember, find the property you like, make sure it offers title insurance, get an attorney, follow your counsel’s advice and use the escrow services of a bank or title insurance company, not some storefront “escrow company.” That way your dream home will stay that way.