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Is it a good time to buy property in Cabo San Lucas now?

Has Cabo San Lucas finally become a buyer’s market?

Yes. Buying property in Cabo San Lucas is easier to negotiate today than it has been for several years, although sellers have certainly not capitulated.

The clearest change is in actual transactions. Christie’s Real Estate Cabo counted 797 MLS closings across its covered Los Cabos and Baja California Sur markets in the first half of 2026, down 17.6% from a year earlier. The dollar value of those sales dropped even faster, from $866.7 million to $670.9 million, a 25.2% decline.

Cabo San Lucas and the Cabo Corridor followed the same pattern. The combined area recorded 258 MLS sales worth $160.5 million. The number of deals fell 16.2%, while the money changing hands fell 28.3%.

That gap is telling. Buyers have not vanished from Cabo, but expensive transactions are getting harder to close. Sellers now face buyers who have more alternatives and far less reason to rush.

The change becomes even clearer when we look beyond sales volume. Homes and condos are taking roughly eight months or longer to sell on average in several segments, and some luxury condos have been sitting far longer. Sellers are also accepting prices several percentage points below their final asking prices.

Cabo has moved away from the period when a buyer worried that waiting a week would mean losing the property. Today, walking away from a mediocre deal is much easier.

Are Cabo San Lucas property prices actually falling now?

Some Cabo property prices are falling, especially in the resale market, but there is still no broad price crash across Los Cabos.

This is where the market gets confusing. The latest Sociedad Hipotecaria Federal housing index showed Mexican home prices still rising strongly during the first half of 2026. Los Cabos was among the markets showing continued appreciation. At the same time, Christie’s MLS figures showed the average price of the properties that actually sold in its Baja dataset falling 9.3%.

Those figures measure different things.

The SHF index is built from homes purchased with mortgage credit. Cabo’s international property market contains a much heavier mix of cash purchases, resort condos, multimillion-dollar villas, new developments and branded residences. Many developer transactions never appear in the Baja MLS either.

Even inside the MLS, there is no single Cabo price trend. Homes above $1 million sold for an average of about $3.66 million in the first half of 2026, 14.4% less than a year earlier. Condos below $1 million averaged about $395,000, down 6.4%. Yet homes below $1 million actually recorded a 3.8% increase in their average sale price.

Luxury condos went in the opposite direction again, with the average sale jumping 26.2%. Only 45 of those condos sold, however, so a few expensive branded or prime units can shift the average dramatically.

Anyone saying simply that “Cabo prices are rising” or “Cabo prices are crashing” is flattening several different markets into one number. Right now, property quality and segment matter much more than the overall Cabo average.

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Why did Cabo real estate cool down so much?

Cabo real estate cooled because the post-pandemic buying rush pushed prices and development far ahead of normal transaction activity.

The scale of the previous boom is easy to underestimate. Christie’s historical MLS series puts annual transaction volume across its covered Baja markets at roughly $286 million in 2015 and about $505 million in 2019. The market then surged to around $1.6 billion during the pandemic period and remained close to that much larger level afterward.

Cabo therefore entered the current slowdown from an unusually high base.

During the hottest period, Americans and Canadians were buying second homes, remote workers had more freedom to relocate, borrowing costs were much lower, and developers accelerated construction across the corridor. Sellers quickly became used to rising prices and fast decisions.

Those conditions have changed. Mortgage rates remain expensive, buyers have far more properties to choose from, and many people who wanted a pandemic-era lifestyle home have already bought one.

We are now seeing a market digest the excesses of that run. The useful part for a new buyer is that seller expectations are adjusting faster than Cabo’s underlying tourism economy is deteriorating.

Is there so much Cabo inventory that buyers can negotiate hard?

Yes. The amount of property currently for sale in Cabo and the wider Los Cabos market gives buyers plenty of room to reject overpriced listings.

Christie’s latest MLS report counted 635 active homes below $1 million against only 202 sales during the previous six months. At that pace, the market had 18.9 months of supply.

Luxury homes were slower. There were 411 active listings above $1 million and only 76 six-month sales, producing 32.4 months of inventory.

Condos were similarly crowded. The market showed 1,202 active condos below $1 million and about 26 months of supply. Above $1 million, condo inventory was equivalent to roughly 28 months of sales.

Those figures are far beyond what buyers experienced during the frantic part of the Cabo boom. Luxury resort property naturally takes longer to sell than a normal suburban house, so we should not treat six months of inventory as some magic dividing line. Even with that caveat, two to three years of theoretical supply is a lot.

In practice, buyers can compare communities, revisit a listing several weeks later and make offers based on recent closed sales rather than the seller’s ambitions.

The best Cabo properties can still sell without huge discounts. A unique beachfront villa in a tightly held community does not compete with 30 ordinary corridor condos. But abundant inventory has made average properties much harder to price aggressively.

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How much can buyers negotiate off Cabo asking prices today?

Cabo buyers can often negotiate around 4% to 7% below the final asking price on residential resales, with larger discounts appearing in weaker luxury and land deals.

The current MLS numbers are quite consistent. Homes under $1 million sold at 95.3% of asking during the first half of 2026. Homes above $1 million averaged 92.9%.

Condos below $1 million closed at 95.7% of asking and condos above $1 million at 93.5%. Million-dollar-plus land sold for only 90.2% of asking on average.

The dollar difference becomes meaningful very quickly. Applying the 92.9% luxury-home ratio to a $2 million listing would produce a sale around $1.858 million. On a $5 million property, the same gap is roughly $355,000.

These figures also understate some sellers’ original concessions because the MLS ratio compares the closing price with the final list price. A property originally advertised at $2.3 million, reduced to $2 million and eventually sold at $1.86 million would appear as only a 7% discount even though the original seller expectation came down much further.

So we would not start by mechanically offering 7% below every listing. The better question is how long that specific property has been sitting, how many reductions it has already had and what truly comparable units have closed for lately.

Today’s Cabo market rewards buyers who negotiate the individual property rather than speculate about the whole index.

Are luxury homes where the best Cabo deals are now?

Probably. Cabo’s luxury-home market currently combines weaker sales, lower average closing prices and more inventory than the sub-$1 million home segment.

Only 76 homes priced above $1 million closed through the MLS during the first half of 2026. That was 31.5% fewer than a year earlier. Their average selling price dropped 14.4% to roughly $3.66 million.

Homes below $1 million held up much better. Sales fell only 6.5%, and their average closing price actually increased slightly.

The difference shows up again in inventory. Luxury homes had more than 32 months of supply versus fewer than 19 months below $1 million.

This is the part of the market where patient cash buyers can be particularly useful to sellers. A multimillion-dollar owner who has already waited eight or ten months knows that the next credible buyer may not arrive next week.

We should still be careful with averages because “luxury Cabo” covers everything from older hillside villas to newly built homes inside private golf communities. But the broad pattern is strong enough to act on: above $1 million, buyers currently have more negotiating power.

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Are cheaper Cabo condos actually a bargain now?

Not automatically. Cabo condos below $1 million look cheaper than luxury villas, but buyers are entering one of the most crowded parts of the market.

More than 1,200 sub-$1 million condos were actively listed in Christie’s latest MLS snapshot. Only 280 had sold during the previous six months. Sales were down 20.7% year over year and the average closing price had fallen 6.4%.

The longer trend is even more interesting. Data compiled by Cabo Real Estate Services showed 737 two-bedroom condo sales in 2021 and 720 in 2022. That dropped to 459 in 2023, 391 in 2024 and 320 in 2025.

From 2021 to 2025, annual transactions in that category fell by roughly 57%.

Meanwhile, new projects have continued adding apartments along the tourist corridor and around Cabo San Lucas. A buyer choosing an ordinary two-bedroom investment condo can therefore end up competing with a large number of similar properties both when renting it and when eventually reselling it.

This is where paying more for a scarce feature can make sense. Walkability to the marina, an unobstructed ocean view, direct beach access, unusually low HOA costs or an established rental history can protect a property from becoming one more interchangeable listing.

A generic condo needs a genuinely attractive purchase price today. There is too much competing supply to pay a scarcity premium for something that is not scarce.

Is Cabo tourism still growing enough to support property prices?

Cabo tourism remains very strong, but visitor growth has clearly matured and we should stop assuming another decade of explosive expansion.

The Los Cabos Tourism Board reports nearly 3.8 million visitors in 2025, about 130% more than a decade earlier. Hotel inventory expanded from around 15,000 rooms in 2016 to more than 22,000, yet average hotel occupancy during 2025 still reached roughly 70%.

Cabo also remained expensive. Average hotel rates were close to $440 per night and RevPAR was around $306. Almost 80% of hotel inventory now sits in the five-star category.

The fresher numbers reinforce the “strong but mature” interpretation. FITURCA’s tourism observatory recorded 74% hotel occupancy at the beginning of 2026, exactly level with the prior year. Average daily rates slipped slightly from $508 to $499 rather than continuing to climb.

Airport arrivals looked similar. International arrivals increased 2.6% year over year in that same early-year observation, while domestic arrivals fell 5.6%. Grupo Aeroportuario del Pacífico later reported softer passenger traffic across parts of the spring before its network returned to modest growth in July.

We would read that as normalization rather than a tourism warning. Cabo still fills expensive hotel rooms and attracts a huge number of international travelers. What has disappeared is the easy assumption that every tourism metric will keep moving sharply upward.

For property valuations, that is enough. Buying today should work with roughly stable tourism demand; the deal should not require another extraordinary visitor boom.

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Can a Cabo Airbnb still justify buying an investment property?

Yes, but only when the property works under fairly ordinary occupancy assumptions. Cabo’s rental market is too competitive now to build an investment case around peak-season Airbnb rates.

FITURCA has been tracking thousands of short-term rental units across Los Cabos. Its recent observations have generally shown platform occupancy around the high-40% range while the number of available properties continued to fluctuate at roughly 6,000 units or more.

That’s the catch. Cabo can have a strong tourism year without every Airbnb performing well because visitors now have hotels, branded residences and thousands of privately rented homes and condos competing for the same stay.

A property that produces excellent revenue at Christmas or during spring break can still spend long stretches partially empty. Management commissions, cleaning, utilities, furnishing replacement, HOA fees, maintenance and Mexican taxes all sit between gross booking revenue and the owner's return.

We would therefore stress-test a rental using ordinary weeks rather than exceptional ones. If the purchase only makes sense at 70% occupancy and premium nightly rates throughout the year, the price is too high.

The properties worth paying up for are the ones that can explain why a guest chooses them over the next 20 Cabo listings.

Do today’s mortgage rates and strong peso make Cabo harder to buy?

Yes. Financing a Cabo purchase is still expensive, and the stronger peso has also reduced American buyers’ spending power on local costs.

Banco de México’s latest available mortgage comparison showed an average quoted fixed mortgage rate of about 11.3% and an average total annual cost around 13.8%. The total-cost figure incorporates interest plus other mandatory expenses under Banxico’s standardized example.

Those numbers make leverage much harder to justify than it was when borrowing was cheap. Foreign financing products can differ, but large down payments and high borrowing costs remain common.

The peso adds another headwind. The U.S. dollar bought more than 20 pesos around the end of 2024 and has recently traded much closer to the high teens. American owners therefore get fewer pesos for every dollar spent on local labor, maintenance, utilities and other peso-denominated expenses.

The purchase price itself is less exposed because Cabo’s international property market is heavily dollarized. Multimillion-dollar villas and resort condos are commonly advertised and negotiated in U.S. dollars.

Cash buyers are in a different position. High financing costs remove some competitors from the market while giving a credible cash offer more weight with a seller.

For a heavily financed buyer, current conditions are mediocre. For a cash buyer, the same environment can be useful.

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Can Cabo closing costs and HOA fees ruin an otherwise good deal?

Absolutely. Cabo property can look attractive at the purchase price and become mediocre once we add acquisition costs and recurring community fees.

Los Cabos charges a 3% property acquisition tax. Foreign purchasers can then face notarial fees, registration costs, bank-trust setup and other transaction expenses. Depending on the property and structure, buyers commonly budget total closing costs in roughly the mid-to-high single digits as a percentage of purchase price.

At 7%, a $1 million purchase absorbs around $70,000 before the owner has furnished anything or fixed a problem.

HOA dues can have an even bigger effect over time. Basic condos may charge only a few hundred dollars a month, while resort communities can run much higher. Branded residences with hotel-style services can reach well into four figures per month.

A $1,000 monthly HOA means $120,000 over ten years before any increases or special assessments. That can easily wipe out the advantage of buying a condo that was $50,000 cheaper than a competing property.

Foreign ownership adds another modest recurring cost because residential property inside Cabo’s coastal restricted zone is generally held through a fideicomiso bank trust. The structure is established and renewable for 50-year periods, so the legal mechanism itself is not a reason to avoid Cabo. Buyers simply need to include the trust setup and annual bank fee in the real cost of ownership.

The question before making an offer is therefore broader than “How cheap is this house?” We want the ten-year cost of owning that exact property.

Is buying new construction in Cabo better than buying resale today?

Resale property currently deserves the first look because slower transactions give buyers unusually clear negotiating leverage, although some developers can beat that value with incentives.

A resale has one immediate advantage: we know what we are buying. We can stand on the terrace, see whether another building blocks the view, inspect the finish quality, read the HOA accounts and compare the seller’s price with actual closed transactions.

New developments play a different pricing game.

A developer may be reluctant to cut a published $1 million price to $900,000 because that lower number can affect the perceived value of every remaining unit. Instead, the developer can offer furniture, closing-cost credits, upgrades, a better payment schedule or other concessions.

A nominally smaller discount can therefore hide a competitive effective price.

Presales bring additional risks. The surrounding area can change before delivery, completion can be delayed, and hundreds of competing units may enter the market around the same time.

Today’s large inventory makes it easier to compare both sides. We would calculate what each option costs fully completed, furnished and ready to use rather than being impressed by either a resale “discount” or a developer’s headline price.

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Could Cabo property get much cheaper if we wait another year?

Some Cabo properties probably will get cheaper, but waiting for a broad crash is a weak strategy based on the evidence we have today.

There is enough softness for further repricing. Luxury homes are moving slowly, ordinary condos face heavy competition, and land is particularly illiquid. Owners who have already waited a year may eventually accept offers they would reject today.

The latest official housing index, however, still shows appreciation rather than broad distress. Cabo’s tourism economy also continues to support expensive hotels, international flights and repeat visitors.

Most importantly, the present slowdown does not resemble a highly leveraged housing bust where thousands of owners suddenly need to refinance or sell. Cabo’s international market has a large cash component, especially at higher price points.

Prices can therefore drift lower without producing the waterfall of forced sales that bargain hunters often imagine.

The better reason to wait is property-specific. If a condo has many identical units for sale, time is on the buyer’s side. If a seller refuses to acknowledge recent comparable sales, we can leave the offer on the table.

A rare beachfront home is different. Waiting for a theoretical 10% market decline can be pointless if the exact property we want rarely comes up for sale.

Timing Cabo at the index level is less useful these days than timing the seller.

Who should actually buy Cabo property now?

Cash buyers who plan to own for many years have the clearest reason to buy Cabo property now; short-term and highly leveraged buyers have a much weaker case.

Someone buying a second home for the next decade can absorb Cabo’s high transaction costs and use today’s slow resale market to negotiate. The same is true for a lifestyle buyer who finds a genuinely scarce property and knows they will use it.

Luxury cash buyers are also in a strong position because the top end currently has weak liquidity. A credible offer can become valuable when the seller has spent months waiting for another multimillion-dollar buyer.

Rental investors need a higher bar. We would want conservative occupancy assumptions, manageable HOA costs and a clear reason the property will outperform Cabo’s growing pool of alternatives.

Short-term speculators face the worst setup. Closing costs are substantial, resale liquidity has weakened and nobody can confidently assume rapid appreciation over the next two or three years.

Highly leveraged buyers also lose much of the advantage because current borrowing costs can consume the discount they negotiate from the seller.

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So, is it a good time to buy property in Cabo San Lucas now?

Yes, selectively. Cabo San Lucas currently offers one of the better negotiating environments buyers have seen since the post-pandemic property boom, and we would be comfortable buying the right property at the right discount.

The case comes mainly from seller leverage moving toward buyers. Transactions have slowed, expensive homes are particularly hard to move, ordinary condos face heavy competition and closing prices are routinely coming in below asking.

As seen above, that softer property market has arrived without a comparable collapse in Cabo tourism. Hotels are still filling roughly seven out of ten rooms over the year, international visitors remain a major part of demand and Cabo continues to command very high accommodation prices. Tourism growth looks much more mature today, but the destination itself remains strong.

That combination is attractive. We get a slower property market without evidence that Cabo has suddenly lost the visitors and wealthy second-home buyers supporting it.

There is little reason to hurry into an average listing, though. Buyers can currently afford to compare properties, negotiate and leave when the numbers do not work. Generic condos are especially easy to replace, while expensive financing makes weak deals even worse.

The strongest setup is a cash buyer with a seven-to-ten-year horizon purchasing a scarce or clearly underpriced property from a seller who has already spent months waiting.

For that buyer, we would rather negotiate now than sit on the sidelines hoping for a dramatic Cabo crash.

For someone using expensive debt, planning to flip within a few years or counting on aggressive Airbnb occupancy, we would pass for now.

Cabo is currently a good place to hunt for a deal. It is still a bad place to pay whatever the seller asks.

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Who is the author of this content?

THE LATINVESTOR

A team specialized in real estate investing in LATAM countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Cabo San Lucas. If you’d like to learn more about us, you can check our presentation page.