With tourism returning and bigger than ever, Los Cabos, Mexico is emerging as one of the largest second home markets in North America, with many vacationers opting to become homeowners.
The world-class destination on the southern tip of Mexico's Baja California peninsula is one of the strongest real estate markets in the country, with total sales growing at an annual rate of 6% over the past five years, according to a New York report.
Los Cabos is going through a seller's market where sellers have more control on the price they accept on their properties in the offers.
Increased interest from U.S. buyers has prompted developers to scramble to meet demand. About 80% of buyers are from the United States.
Now with a new direct flight to and from Europe, the Los Cabos real estate market—an area that includes the two resort towns of Cabo San Lucas and San José del Cabo—is set to continue on a path of rapid growth.
What does Los Cabos’ market look like in 2022?
In Los Cabos, the high-end market is over $1 million. It's a very hot market right now. This is really a bull market. It is driven by new developments in new construction at various price levels. The current resale market accounts for about 90% of sales. All the new stock is not ready yet. We see strong demand and buy before building. Most will be ready within a year or two. This high-end market accounts for 10-15% of all home sales.
Which market segments are the most active?
Properties under $1 million sell the most. This segment has an annual growth rate of more than 10%. Our inventory is down and prices are rising in all markets, around 5-10%.
Where are buyers from now?
U.S. buyers are from California, Texas, New York, Chicago. We are also seeing buyers coming from Mexico City. The Canadian market is starting to grow. We now have direct flights from Madrid and our tourism board is looking into direct flights from London and Frankfurt. So Cabo opens up to Europe. Since the pandemic began more buyers are living here full-time since they can work remotely. That is good for the economy. Why not be at the beach if you can live and work anywhere?