I had no idea so many Americans lived in Mexico but found "many hundreds of thousands" a bit too inexact for my tastes and curiosity so I went poking around to see if I could narrow down "many hundreds". So naturally I started googling. The search hasn't been very satisfying for tracking down some number, but it did turn up the blog of one Bill Masterson, the People's Guide to Mexico.
Bill takes a look at HOW MANY AMERICANS LIVE IN MEXICO? That link is actually his "Question Revisited" update of his first look at the matter. Both articles are, IMHO, interesting and worth the clicks and few minutes. According to Bill:
How many Americans live in Mexico? 600,000? 500,000? Less? More?
Americans (as well as the rest of the world) are becoming more comfortable with Mexico. As the relationships between the North American countries grow closer, more Americans than ever before are considering a move to Mexico, whether it be for retirement, to start a business, look for work or just to travel. One of the key factors that comes into play when most people consider moving to another country is how many of their fellow countrymen are already there. For all of our professed desire for independence, when push comes to shove, most of us really want to be in relatively close proximity to some people who are similar to us.
It is often said that more Americans live in Mexico than in any other country. Several documents published by the U.S. Department of State say that, "More than 500,000 Americans currently reside in Mexico". This same figure is often quoted in travel articles written for newspapers and magazines. Travel and retirement guides quote similar numbers.
Persons promoting the Lake Chapala area of the state of Jalisco as a retirement-living option for foreigners claim that "more than 200,000 Americans live in Jalisco, the largest English-speaking population in the world, outside of the United States", and "60,000 Americans live along the shores of Lake Chapala."...
Bill's own experiences in Mexico led him to suspect the number was less. So he set about trying to find out what the number actually is. Along the way he discovered that apparently neither the US nor Mexican governments seem to know or care very much. He finds estimates ranging from the 500,000 number to as high as 1,000,000 with 600,000 living in Mexico City. He dismisses this high estimate as "sloppy research" by some PhD candidate at some US university (read it if you care). Where Bill eventually winds up is:
As I stated at the beginning of this article, these new population projections of Americans residing in Mexico "appear to be nothing more than the byproduct of sloppy research."; that’s the bad news. Rather than helping to answer the question, these "projections" only cause confusion and mislead people. Although I'm open to the proposition of being corrected by numbers that can reasonably be substantiated, I've seen nothing over the course of the past year that would cause me to change the opinion I expressed in my prior article, that, "the best factual estimate of Americans living in Mexico is below 150,000." (emphasis mine).
The good news -– from a data gathering viewpoint -– is that the national identity card and the data it might produce ought to narrow the range of numbers being bandied-about, and offer a better idea as to how many citizen-residents are residing in which parts of Mexico. Barring unforeseen revelations on the subject, it looks as if we'll all just have to sit and wait and see what results from the national ID card program. This program, however, is bound to be controversial in the expat community and, like most government programs in any country, is likely to get off to a shaky start.
Along the way he does a reasonable job of telling us who cares and why as well as suggesting a possible explanation for the disparity (undocumented "visitors"). While reading his articles and a link or two I got the impression from these expat types (Bill apparently returned to the US) that Americans are somewhat notorious for ignoring the immigration laws wherever they go.