Does Cabo have a housing shortage?

Has Los Cabos really added 118,000 people since 2020?

Yes. INEGI's 2025 Intercensal Survey puts Los Cabos at 469,163 residents, up from 351,111 in the 2020 census. That's about 118,000 more people, or 33.6%, the fastest growth of any municipality in Baja California Sur.

Earlier estimates used CONAPO projections of about 420,000. The real number came in much higher.

Most of the newcomers came for work. Local press reported in October 2026 that many arrive from Guerrero, Oaxaca and Chiapas to take tourism jobs, and the governor said the growth is straining water, schools, healthcare and social housing projects.

So when people talk about a housing shortage in Cabo, they're reacting to a town that added the population of a mid-sized city in five years, not just to higher prices.

Indicator	2020 census	2025 Intercensal	Change	What we learn
Los Cabos population	351,111	469,163	+118,052 (+33.6%)	Growth was far faster than projected
Occupied private homes	101,934	149,441	+47,507	About 9,500 more households a year
People per occupied home	~3.4	~3.1	Smaller households	More homes needed per 1,000 people

Is Cabo actually running out of homes?

No, not in total. Cabo has plenty of property; what it lacks is housing that ordinary residents can afford and live in year-round.

INEGI counted 121,645 dwellings across Los Cabos in 2020. About 101,934 were occupied, 10,361 were empty and 9,303 were used only part of the year. Roughly one home in six sat outside the permanent housing stock.

Homes did get added since then: occupied homes rose to 149,441 in 2025. But a household being counted doesn't mean it has a decent, legal, serviced home. Part of that growth happened in irregular settlements, as we show below.

A furnished $600,000 condo near the tourist corridor is technically an available home. It does nothing for a hotel worker paid in pesos. Cabo's problem is a mismatch between what exists and who needs it.

Los Cabos housing stock in 2020	Homes	Share of total
Total dwellings	121,645	100%
Occupied private dwellings	101,934	~83.8%
Vacant dwellings	10,361	~8.5%
Temporary-use dwellings	9,303	~7.6%
Vacant + temporary use	19,664	~16.2%

Is Cabo’s real shortage an affordable-housing shortage?

Yes. Compare rents with wages and the shortage is hard to argue with.

Data México puts average monthly labor income in Baja California Sur at roughly MXN 13,000 (about $699). That's a state figure, not Cabo alone, but it gives the right range.

Now the rents. In October 2026, Propiedades.com showed apartments in Cabo San Lucas Centro averaging MXN 15,740, Portales MXN 14,756, 4 de Marzo MXN 16,724 and El Tezal about MXN 31,480 (around $1,690). The Portales and 4 de Marzo averages rest on only a handful of listings, so read them as rough levels.

A housing bill filed in Baja California Sur in late 2025 put the state's average rent at about MXN 26,715 a month, the highest of any state. It also proposed tying rent increases to inflation; we found no sign it had passed by October 2026.

One average salary doesn't cover a small apartment in most of these neighborhoods. People get by with two incomes, shared rooms, cheaper informal rentals or long commutes. Those workarounds are the shortage, not proof it's gone.

Reference point (Oct 2026)	Monthly amount	Compared with MXN 13,000 income
Average BCS worker income	~MXN 13,000	100%
Portales apartment	MXN 14,756	~114%
Cabo San Lucas Centro apartment	MXN 15,740	~121%
4 de Marzo apartment	MXN 16,724	~129%
BCS average rent (late 2025)	MXN 26,715	~205%
El Tezal apartment	~MXN 31,480	~242%

Are Cabo workers really being priced out of the formal housing market?

Yes. Local press reported in March 2025 that around 52,000 Los Cabos tourism workers had no home of their own, and that a social-interest house cost MXN 1.5 to 2.5 million ($80,600 to $134,000).

Someone earning MXN 12,000 or 15,000 a month competes for land in a place where second-home buyers arrive with dollar incomes or savings. Mexican buyers are part of the top end too, but property values follow resort money while most of the workforce earns local wages.

You can see it in how people live: long commutes from cheaper areas, several earners in one home, and informal settlements on the edges of both towns. The jobs keep pulling workers in; the formal housing near those jobs doesn't keep up.

Does Cabo’s luxury building boom mean there cannot be a housing shortage?

No. Cabo can sell huge amounts of real estate and leave the local shortage untouched, because most of it targets wealthy buyers.

Cabo Real Estate Services recorded about $1.6 billion in residential sales in 2025. In Q2 2026, its revised report shows 279 sales worth $409.8 million, and eight sales above $10 million brought in $141.6 million of that, about a third.

Q3 was quieter: 178 sales worth $133.2 million and no sale above $10 million. But the mix didn't change. Developers follow the money, and a site that can carry villas at several million dollars won't be used for homes priced for peso wages.

Los Cabos MLS market	Result	What it shows
Q2 2026 residential dollar volume	$409.8M	Strong quarter, carried by the top end
Q2 2026 residential sales	279	Modest number of deals
Q2 2026 sales above $10M	8 sales, $141.6M	~35% of the quarter's dollar volume
Q3 2026 residential sales	178, $133.2M	-36% in number, -68% in volume vs Q2
Q3 2026 sales above $10M	0	Luxury volume swings from quarter to quarter

Doesn’t Cabo actually have too many condos right now?

Yes, at market prices. The condo surplus is real, which is why "Cabo has no homes" is the wrong way to put it.

Cabo Real Estate Services counted a record 2,320 active houses and condos at the end of Q1 2026. By the end of Q3 that was down to 1,945, but sales fell even faster, so the market still sits at about 23 months of inventory: 22 for houses, 24 for condos.

Two-bedroom condos are the weakest spot: 646 for sale at the end of Q3, about 22 months of supply, with only 67 sold in the quarter against 175 new listings. Many come from projects sold off-plan during the 2021 boom and now finished.

Christie's Real Estate Cabo, which covers a wider area, gives 23.5 months of supply for condos under $1 million from January to September 2026. That stock won't move into worker housing: even at a deep discount, these units are far beyond local budgets.

Segment (Jan–Sep 2026)	Months of inventory	What it looks like today
Homes under $1M (Christie's)	17.3	Buyers have plenty of choice
Homes over $1M (Christie's)	26.3	Heavy inventory
Condos under $1M (Christie's)	23.5	Oversupplied relative to sales
Condos over $1M (Christie's)	21.3	Slow-moving
Two-bedroom condos, end of Q3 (Cabo Real Estate Services)	~22 (646 units)	Cabo's softest segment

Are Cabo’s informal settlements proof that people cannot find proper housing?

Yes. Their size is the clearest physical sign that the affordable-housing problem goes far beyond normal price pressure.

The Los Cabos Municipal Development Plan identifies seven irregular settlements around Cabo San Lucas with about 8,293 occupied homes and 31,653 people. Caribe Bajo alone has roughly 4,061 homes and more than 16,000 residents. Tierra y Libertad has another 5,286 residents, and Las Torres/Vista Azul about 4,196.

San José del Cabo adds six irregular settlements with about 2,990 occupied homes and 10,351 people.

Together that's more than 11,000 homes and about 42,000 people, roughly 9% of the 2025 population. The dates and definitions differ a little, but this is not a fringe issue.

Area	Identified settlements	Occupied homes	Estimated residents
Cabo San Lucas	7	8,293	31,653
San José del Cabo	6	2,990	10,351
Combined	13	11,283	42,004

How many Cabo homes are already inadequate or overcrowded?

More than 22,000 in 2020, before the latest growth wave. So the shortage isn't only about finding a unit; many existing homes don't meet basic standards.

CONAVI's municipal analysis of the 2020 census put 22,824 Los Cabos homes in housing backlog, 22.6% of the homes it covered. That ranked Los Cabos 42nd in Mexico by number of homes in backlog, high for a municipality its size.

The problems vary: 14,592 homes with mid-quality materials, 12,467 with cramped space and 2,127 with badly deteriorated materials. The categories overlap, so don't add them up.

Since then, Los Cabos has added about 118,000 people. There's no newer backlog count yet, but nothing suggests the gap has closed.

Are Airbnb and vacation rentals causing Cabo’s housing shortage?

They make it worse in some neighborhoods, but they can't explain a shortage this big.

The pull is obvious. AirDNA shows Cabo San Lucas listings averaging $567 a night at 48% occupancy, about $84,100 a year in revenue per listing. A long-term tenant paying MXN 15,000 to 30,000 a month can't compete with that in a well-placed condo.

That takes some apartments away from residents in central Cabo San Lucas and tourist-friendly areas. But AirDNA tracks about 2,434 active listings in Cabo San Lucas, while about 42,000 people live in irregular settlements and the population grew by 118,000. Turning every vacation rental into a long lease wouldn't create the MXN 6,000 or 8,000 apartments low-paid workers need.

Is Cabo’s population still growing fast enough to keep housing tight?

Yes. Los Cabos added about 9,500 households a year between 2020 and 2025, and nothing suggests that pace is about to stop.

The municipality grew from 238,487 people in 2010 to 351,111 in 2020 and 469,163 in 2025. That's 15 years of steady growth driven by tourism jobs, not a short wave of remote workers after the pandemic.

Households are also getting smaller, from about 3.4 people per home in 2020 to about 3.1 in 2025. Even with no new arrivals, that alone means more homes are needed.

Lokus Data, working from INEGI figures, counts 47,507 more occupied households over those five years. That's growth in demand, not a measured shortage, but it shows the scale: Cabo needs thousands of homes every year, not a few apartment projects.

Why doesn’t Cabo simply build cheaper homes?

Because cheap homes compete for land, builders and infrastructure with one of Mexico's most expensive resort markets.

On a good plot near Cabo San Lucas, a developer can build for a local household earning maybe MXN 20,000 or 30,000 a month, or for buyers spending $300,000, $700,000 or several million dollars. Land prices follow the second group.

Building further out lowers land costs, but then roads, water, power, drainage, schools and buses have to follow. When the state launched its Housing for Wellbeing program in Los Cabos, officials named finding suitable land as a main obstacle.

Without cheap public land, subsidies or higher density, the private market won't build enough homes at Cabo wages.

Is the water crisis making Cabo’s housing shortage worse?

Yes. In 2026, water became as much of a limit as land.

On September 1, 2026, Cabo San Lucas' first desalination plant shut down. Later that month, the water utility put neighborhoods such as Las Palmas, Lomas del Valle and Los Cangrejos II on emergency rotation, with water trucks filling the gaps. A second plant is planned, but in June 2026 the local business council said paperwork was holding up construction.

CONAGUA puts the local aquifer's deficit at about 24 million cubic meters a year. Every new neighborhood, cheap or luxury, needs water the city is already struggling to deliver.

The housing plans take this into account on paper. The first 704 public homes in Cabo San Lucas come with roads and public facilities, and the state identified ten sites of about 87 hectares for an initial 4,454 homes. In October 2026, the governor said 120 hectares of ejido land near San José del Cabo had been bought for the next big project. Land on a map isn't a neighborhood until water and drainage reach it.

Is Cabo’s housing shortage pushing families into dangerous areas?

Yes. When formal serviced land is out of reach, some families build where it floods.

The municipality's own settlement inventory includes large communities along arroyos and on the edges of both towns. Caribe Bajo and nearby settlements along the San Lucas arroyo are among the biggest. Around San José del Cabo, irregular building has spread near Santa Rosa, Zacatal and other flood-prone areas.

Baja California Sur's 2025 hydrometeorological plan lists irregular settlements in Los Cabos as a major risk in heavy rain and hurricanes. For the roughly 42,000 people living in them, the cheapest housing is often the most exposed.

Is the government actually building the 31,000 homes it announced?

Not yet. The numbers announced are large, but very few homes have been finished.

An August 2026 municipal update lists about 15,700 homes through Sedatu and 15,400 through Infonavit for Los Cabos, more than 31,000 in total. That's bigger on paper than CONAVI's 22,824-home backlog from 2020, though the two measure different things.

The first phase, 704 homes in Cabo San Lucas (576 units of about 60 m² and 128 of about 40 m²), started in 2025. In February 2026, the governor said about 80 had been built, roughly 10% progress, and that no delivery date had been set. We found no announcement of finished handovers since.

That first phase is a little over 2% of the 31,000 announced. Meanwhile, Los Cabos keeps adding about 9,500 households a year. Even if the program works, it will take years to catch up.

Housing measure	Scale	Status (Oct 2026)
Sedatu track	~15,700 homes	Planned
Infonavit track	15,400 homes (13,000 in the latest San José del Cabo plan)	Waiting for city council approval
Total announced for Los Cabos	31,000+ homes	Mostly on paper
First Cabo San Lucas phase	704 homes	~80 built by Feb 2026
CONAVI housing backlog (2020)	22,824 homes	Existing deficit
New households, 2020–2025	47,507	About 9,500 a year

Will the 13,000 homes at MXN 627,000 in San José del Cabo change anything?

They could, if they get built. It's the first project priced for local wages at a scale that matters, but in October 2026 it was still waiting for the city council to approve its master plan.

The project, called San Pablo, is part of Infonavit's Housing for Wellbeing program. It plans 13,000 homes of at least 60 m² at an average of MXN 627,000 (about $33,700), on 120 hectares bought from the San José del Cabo ejido, about 10 minutes from the hotel zone. The stated investment is MXN 9.5 billion, for around 75,000 future residents.

That price is well under half of today's MXN 1.5 to 2.5 million for a social-interest house, and Infonavit says monthly payments would be lower than current rents. No construction timeline has been published.

What to watch: the council vote on the master plan, where the water for 75,000 people will come from, and the date the first homes are actually handed over. Until then, it doesn't change rents.

Will falling Cabo property prices fix the housing shortage?

No. Condo prices could fall a lot without coming anywhere near what local workers can afford.

The pressure is real. Cabo Real Estate Services counted 1,295 price cuts on completed houses and condos from January to September 2026, after 1,640 in all of 2025. Only 19% of the 2026 cuts led to a sale, against 34% in 2025. Christie's shows condos under $1 million down 5.1% in average price, to about $399,000.

Do the maths. A $400,000 condo cut by 15% is $340,000. A 30% crash takes it to $280,000 (about MXN 5.2 million). Neither is housing for someone earning MXN 15,000 a month.

So headlines about falling condo prices don't mean affordability is coming back. The workers facing the shortage won't see the difference.

Could Cabo’s housing shortage eventually hurt the tourism industry?

Yes, and it's starting to look like a real risk.

Los Cabos has more than 22,000 hotel rooms, plus restaurants, villas and building sites. They need cooks, cleaners, gardeners, guards, drivers and builders who live nearby. When those workers can't find housing, commutes get longer, staff turnover rises and wages have to follow the cost of living.

That squeeze comes at a bad time. Los Cabos airport traffic fell 5.6% from January to September 2026, and international passengers fell 8.4%. A destination that's losing visitors and paying more for staff has less room for error.

Housing for workers is infrastructure for Cabo's resorts, just like water, roads and the airport.

What does the housing shortage mean if you buy or rent in Cabo right now?

It depends on which side of the market you're on. If you're buying a condo between $300,000 and $1 million, the shortage works in your favor: there's too much of what you want.

Negotiate. Q3 2026 sales closed at 93.2% of the original asking price, and two-bedroom condos sit at about 22 months of supply. On a $500,000 listing, 93.2% means about $466,000, and a unit that's been listed for months can go lower.

If you plan to rent long-term, the local demand is real but capped by wages. A unit priced at MXN 15,000 to 20,000 finds tenants; above MXN 30,000 you're competing for a much smaller pool of foreigners and managers. Remember that a non-resident owner pays 25% tax on gross rent.

Whatever you buy or rent, check water first: how many days a week the building gets city water, how big the cistern is, who pays for trucks, and whether the project's water supply is in writing. That matters more than the view.

Is Cabo’s housing shortage likely to get worse from here?

For affordable homes, probably yes for a few more years, even with the public projects moving.

Demand keeps coming from several sides: about 9,500 new households a year, tourism jobs, smaller households, and a private building pipeline aimed far above local wages.

The correction happening today is in the wrong part of the market. At the end of Q3 2026, 646 two-bedroom condos were for sale while the public program had finished only a fraction of its first 704 homes.

The one thing that could change the picture is the public program actually delivering. If the 31,000 announced homes, including the 13,000 in San Pablo, get built with water and roads, that's a big addition to a stock of about 149,000 occupied homes. Until then, expect the shortage to stay.

So does Cabo have a housing shortage today?

Yes. Cabo has a shortage of affordable, serviced homes for the people who live and work there, not a shortage of property.

The evidence lines up: 118,000 more residents since 2020, 22,824 homes in backlog before that growth, about 42,000 people in irregular settlements, and rents that eat a full local salary in most neighborhoods.

At the same time, the private market has too much stock. Condos under $1 million carry about 23.5 months of supply, two-bedroom condos are the weakest segment, and sellers made 1,295 price cuts in the first nine months of 2026.

Cabo runs two housing markets. One serves investors, second-home owners and retirees. The other has to house the people working in hotels, restaurants, construction and services. The first has plenty; the second is still short by tens of thousands of homes.