The Cabo San Lucas real estate market is located at the southern tip of the Baja California Peninsula. Warm and sunny all year round, it draws tourist to its many outdoor activities such as fishing and scuba diving. Despite its humble origins as a small fishing town, this place has grown to become a world-class vacation destination, which has fueled the growth of the local real estate market. Los Cabos is now a serious a real estate buyer’s market, and today we look at some of the important facts that make it so.
What happened to Los Cabos? Why the shift in activity?
In 2008/2009 the global financial crisis impacted the market here and slowed down sales significantly. To make things worse, the entire region suffered the devastation of Hurricane Odile when it struck in 2014. It caused huge amounts damage, so the market has first undergone a recovery stage and is now beginning to grow steadily.
Who is buying in Cabo? What nationalities?
The majority of buyers are from the US and Canada, although there are an increasing number of foreigners purchasing. Major US cities such as New York and Los Angeles now offer direct flights to Los Cabos airport, which makes it attractive to American residents that want a second home.
What is your typically single family home in Cabo?
Almost every single family homes comes with a swimming pool. Most of them are inside of gated communities, often with golf courses and other amenities.
How much do they cost?
The cost of a 2-bedroom, 2-bathroom begins at around $250,000. Single-family homes near the beach are upwards of $400,000, and luxury models in a gated community can cost several million dollars.
What is the rental market like?
Some buyers want to own a rental condo in the area first, before upgrading to total ownership after spending more time here. There is a very strong rental market here for single family homes, which can cover expenses when the property is not in use.
Do buyers prefer new houses and condos or resale?
Half of all buyers prefer to purchase newly constructed homes and condos. There is a trend where people are less interested in the convenience of living close to the downtown area. Buyers are heading outwards into the sprawling outer limits of town in either direction, either the corridor or Pacific side.
How are resale homes doing?
Sellers of older properties are feeling the impact of new developments and communities that keep springing up. Older homes and condos tend to remain on the market twice as long as the ones that have recently been built.
Are there many older homes for sale?
Yes. There are a lot of homes that were built in the past decade that are now appearing on the market. This is where you can still get deals some really good deals.
What is the average cost of a luxury home?
Approximately $3 million.
Is there a demand for luxury properties?
Yes, there always has been a healthy demand. One of the most expensive properties on the market in the last few years was a $16 million private beachfront estate.
Are investors building in Cabo?
Only a very small number of buyers are building versus buying new or resale.
So is Cabo affordable?
Yes, you can find a lot of great deals here. Many sellers of resale properties are upgrading to meet the needs and demands of current buyers. This includes price reductions that balance out renovation costs. Buyers are not interested in the hassles of remodeling or repairs, so they are in a position to bargain with owners.