Are property prices in Cabo San Lucas likely to rise?

Get all the data you need about the real estate market in Cabo San Lucas

Are Cabo San Lucas property prices still rising today?

Cabo San Lucas property prices are no longer rising across the board: the resale market has cooled sharply, while a smaller group of premium properties is still getting more expensive.

The clearest current evidence comes from Christie’s Real Estate Cabo. In H1 2026, its Cabo San Lucas area recorded 258 closed sales, down 16.2% from the same period a year earlier. Dollar volume fell even faster, dropping 28.3% to $160.5 million. That mix is clearly moving toward cheaper transactions.

A separate analysis of Baja MLS residential records by VanSirius found the same direction inside Cabo San Lucas. Closed residential sales fell from 118 to 86 between H1 2025 and H1 2026. The median sold price moved from about $334,000 to $258,000, while the average dropped from roughly $686,000 to $610,000.

That does not mean a specific Cabo home lost 23% of its value. Cabo is a relatively small market, so a change in what gets sold can move the median quickly. Still, two different datasets showing fewer deals and weaker selling prices are enough to reject the idea that Cabo is currently enjoying another broad property boom.

Cabo San Lucas indicator	H1 2025	H1 2026	Change
Residential closed sales, narrow CSL dataset	118	86	-27.1%
Median residential sold price	$334K	$258K	-23.0%
Average residential sold price	$686K	$610K	-11.2%
Broader CSL-area closed sales	~308	258	-16.2%
Broader CSL-area sales volume	~$224M	$160.5M	-28.3%

Is Cabo San Lucas having a property crash?

Cabo San Lucas is going through a real slowdown, but current sales data still looks much more like a buyers’ market than a property crash.

Christie’s counted 797 closed MLS transactions across its broader Baja California Sur coverage in H1 2026, 17.6% fewer than one year earlier. Total dollar volume fell 25.2%. That is a sizeable contraction and should not be brushed aside as normal monthly noise.

Yet sellers are generally still closing within a few percentage points of asking prices. Homes below $1 million averaged 95.3% of list price. Condos below $1 million averaged 95.7%. Even homes above $1 million averaged 92.9%.

Those numbers would normally look much worse in a forced-selling market.

Cabo is also coming off an extraordinary base. Broader regional MLS volume went from roughly $404 million in 2020 to about $1.60 billion in 2021. It then remained around $1.4 billion to $1.7 billion annually through 2025. The latest slowdown therefore follows several years when transaction activity was running at multiples of its pre-boom level.

For now, owners appear more willing to wait than to slash prices. That can still produce weak returns for buyers who paid too much, but we would need to see much deeper discounts and much more urgent selling before calling the current Cabo market a crash.

Does Cabo now have too many properties for sale?

Cabo currently has too much resale inventory for ordinary properties to rise quickly in price.

This is probably the strongest argument against a near-term surge.

Christie’s H1 2026 data shows 18.9 months of inventory for homes priced below $1 million and 32.4 months above $1 million. Condos had 25.8 months of supply below $1 million and 28.3 months above it. High-priced land was much weaker again, with more than 100 months of supply.

A healthy resort market can carry more inventory than a normal primary-home market because second-home owners are often in no hurry to sell. Even allowing for that, two to three years of supply gives buyers plenty of alternatives.

The pressure will be strongest where properties are easy to compare. A two-bedroom resale condo without a special view may compete with dozens of similar units, recently finished projects and presales offering newer amenities. An exceptional oceanfront home faces a much smaller set of substitutes.

Resale segment	Active listings	H1 sales	Months of inventory	Sale/list ratio
Homes under $1M	635	202	18.9	95.3%
Homes over $1M	411	76	32.4	92.9%
Condos under $1M	1,202	280	25.8	95.7%
Condos over $1M	212	45	28.3	93.5%
Land under $1M	1,293	177	43.8	93.2%
Land over $1M	309	17	109.1	90.2%

Are Cabo sellers finally cutting their prices?

Cabo sellers are giving buyers more room to negotiate these days, although widespread fire-sale pricing still has not appeared.

The sale-to-list numbers explain why the market can feel weak without producing spectacular price drops. Buyers are commonly getting discounts of around 4% to 7% on homes and condos, and the gap becomes wider in less liquid categories.

Time is doing part of the adjustment. Properties can remain listed for months while owners wait for a buyer rather than immediately dropping the asking price by 15% or 20%.

That is fairly common in a second-home market. Many Cabo owners do not need the proceeds to buy their next primary residence, so there is less pressure to accept the first serious offer.

The catch is that patience only works while enough owners remain patient. If inventories stay this high and more owners decide they actually want out, today's moderate negotiation could turn into real price cutting. We do not see that transition in the market-wide numbers yet.

Why are some expensive Cabo properties still getting more expensive?

Some expensive Los Cabos properties are still getting more expensive because wealthy buyers are concentrating their money in a surprisingly small group of condos, resort communities and trophy properties.

Q2 2026 shows how extreme this has become. Cabo Real Estate Services recorded nine residential transactions above $10 million, up from only one in Q1. Those nine properties generated $160.9 million of sales.

Across the quarter, properties above $1 million represented roughly 80% of residential dollar volume. The overall average selling price jumped 58.7% from Q1 to about $1.56 million, but the median was only $525,000.

A few enormous transactions are pulling the top-line number upward. The median tells a much calmer story.

Christie’s found another striking split in H1 2026. The average sold price for condos above $1 million rose 26.2% to roughly $2.89 million and transaction count increased 9.8%. At the same time, condos below $1 million fell 6.4% in average price and sales dropped 20.7%.

Luxury houses did not share the same strength: average prices above $1 million fell 14.4%, with transaction count down 31.5%.

So “luxury Cabo” is already too broad a category. Buyers are paying up for specific forms of luxury, particularly desirable condos and trophy deals, rather than lifting everything expensive together.

Property segment	H1 2026 avg. sold price	Price change YoY	Sales change YoY
Homes under $1M	$419K	+3.8%	-6.5%
Homes over $1M	$3.66M	-14.4%	-31.5%
Condos under $1M	$395K	-6.4%	-20.7%
Condos over $1M	$2.89M	+26.2%	+9.8%
Land under $1M	$224K	-3.1%	-21.0%
Land over $1M	$1.64M	-11.8%	-22.7%

Will Aman, St. Regis and other luxury resorts push Cabo property prices higher?

Aman, St. Regis and the next wave of high-end Cabo resorts should push the ceiling higher for prime property, especially inside or close to the best resort communities.

Los Cabos keeps moving further upmarket. Recent and ongoing development includes St. Regis Los Cabos at Quivira, Grand Hyatt at Oleada, new phases at Costa Palmas and Amanvari on the East Cape. The Los Cabos Tourism Board has also highlighted further hospitality, golf, wellness and residential investment across the destination.

Amanvari gives us a useful sense of the customer developers are targeting. The resort opened with just 18 hotel casitas. Reported entry-level nightly pricing runs into several thousand dollars. That puts Cabo in direct competition for buyers who also consider Hawaii, Miami, Southern California, the Caribbean and Mediterranean resort markets.

Branded residences can reset comparable prices inside individual communities because buyers are paying for much more than square metres: architecture, hotel service, beach access, privacy, golf, restaurants and an internationally recognised brand all get bundled into the property.

There is a downside for older stock. Every polished new project gives wealthy buyers another alternative. A fifteen-year-old condo that once felt luxurious may suddenly look ordinary next to a new residence with better design and amenities.

New luxury development should therefore widen the gap between Cabo's best properties and the large amount of replaceable resale inventory.

Is Cabo tourism still strong enough to support higher property prices?

Los Cabos tourism is still strong enough to support property values today, although visitor growth has slowed from the explosive pace of the previous decade.

The destination welcomed close to 3.8 million visitors in 2025, according to the Los Cabos Tourism Board. That was roughly 130% more than a decade earlier.

Hotel capacity expanded alongside demand. Los Cabos now has more than 22,000 hotel rooms versus around 15,000 in 2016, yet average occupancy was still close to 70% in 2025.

The spending level is even more relevant to property. Average hotel rates were close to $440, while hotel RevPAR reached roughly $306. Nearly 80% of the room inventory sits in the five-star category.

International access has also become much stronger. By the end of 2025, Los Cabos had direct connections to 42 international airports, including 32 in the United States.

These numbers explain why wealthy buyers keep discovering Cabo and why developers are comfortable committing more capital. They do not show a new tourism boom powerful enough to overwhelm today's resale inventory.

Tourism is keeping a floor under demand. It is not, on its own, clearing two years of resale supply.

Los Cabos tourism measure	Latest reported level
Annual visitors	~3.8M
Growth versus a decade earlier	~130%
Hotel inventory	>22,000 rooms
Hotel inventory in 2016	~15,000 rooms
Average occupancy	~70%
Average daily hotel rate	~$440
Hotel RevPAR	~$306

Are Cabo Airbnb returns still good enough to support property prices?

Cabo San Lucas short-term rentals still earn substantial revenue, but current Airbnb economics are too mixed to justify aggressive property-price growth by themselves.

AirDNA's latest broad Cabo San Lucas dataset covers 3,396 active short-term rentals. Average trailing annual revenue is about $84,200, occupancy is 48%, and the average booked daily rate is $561.

The year-over-year change is more interesting than the headline revenue number. Occupancy has increased 12.4%, while the average daily rate has fallen 15.5%. RevPAR is almost unchanged at $270, up just 0.5%.

In practical terms, hosts are filling more nights but accepting lower nightly prices.

That keeps rental demand healthy enough, but it is weak evidence of pricing power.

The apparent 89% jump in average annual revenue should also be handled carefully because AirDNA reports a very large change in active listings over the same period. Changes in the pool of properties being tracked can distort a simple comparison of average revenue per active listing.

For property buyers, the more stable RevPAR figure is the useful number. Cabo vacation rentals are still generating serious revenue, but rental performance currently gives us little evidence of an accelerating market capable of pulling average home prices sharply higher.

Will lower interest rates bring buyers back to Cabo?

Lower interest rates should gradually help Cabo property sales, but financing is still expensive enough that we would not expect a rate-driven buying rush yet.

Banco de México currently has its overnight policy rate at 6.50%. That is considerably below the 11% level reached during the previous tightening cycle, so the direction has already become more supportive for property.

The remaining level still matters. A buyer deciding whether to put $1 million into a Cabo property can earn meaningful returns keeping that capital in fixed-income assets. Financing a purchase is also much more expensive than it was during the cheap-money period around 2020 and 2021.

Cabo is less mortgage-dependent than an ordinary housing market because affluent foreign buyers often arrive with large down payments or cash. Rates still affect those buyers through opportunity cost.

A further fall in borrowing and cash yields would make second-home ownership more attractive at the margin. We would expect that to show up first in transaction volume, then eventually in prices if inventory starts clearing.

Rates help at the margin. They are not yet the thing clearing Cabo's resale backlog.

Does Mexico's housing market make higher Cabo prices more likely?

Mexico's wider housing market is still pushing upward, giving Cabo a supportive backdrop even while Cabo resales go through their own correction.

Sociedad Hipotecaria Federal's newest housing-price release shows prices for mortgage-financed Mexican homes rising 7.9% in H1 2026 compared with the same period one year earlier.

New housing rose 8.3%. Existing housing increased 7.5%. Houses were up 8.4%, while the combined condominium and apartment index rose 7.4%.

These figures mainly cover homes purchased with mortgage credit, so we should not treat them as a Cabo luxury index. A $7 million foreign-owned villa in Pedregal sits well outside the typical SHF transaction.

The comparison is still useful. Cabo's recent weakness is happening while Mexican home prices continue to rise nationally, which points toward a local adjustment after a huge boom rather than a nationwide housing slump dragging Cabo down with it.

It also raises replacement costs. Land, labor and newly built Mexican housing are becoming more expensive, making it harder for developers to keep delivering comparable new homes at yesterday's prices.

Can Cabo keep growing with its water problem?

Cabo can probably keep growing despite its water shortage, because major new supply is finally under construction, although water reliability will remain part of what separates strong properties from weaker ones.

Los Cabos has lived with water stress for years. Cabo San Lucas depends on desalination, wells and water transferred from San José del Cabo, while population and tourism have kept expanding.

The second Cabo San Lucas desalination plant recently reached 73% completion, according to the municipal water authority. The project carries roughly MXN 1.8 billion of investment and is designed to add 250 litres per second to the network, benefiting more than 464,000 residents.

That is a substantial increase in infrastructure, and it lowers one of the clearest constraints on further development.

It does not magically make water irrelevant. Fast population growth, more hotel rooms and more housing will keep adding demand to the same system.

For property buyers, the practical question is increasingly local: does a particular community have dependable water, storage, treatment and backup infrastructure?

Projects that can answer that question well should command a premium. Properties in areas with unreliable service will have a harder time keeping pace, even if Cabo prices overall eventually rise.

Is population growth actually creating more demand for Cabo property?

Los Cabos population growth is creating permanent housing and land demand, but most of that demand sits far below the price of a typical foreign-buyer villa.

The scale of local housing investment makes the demographic pressure hard to ignore. Federal and state authorities have formalised plans for 15,400 new homes in Los Cabos, involving roughly MXN 9.5 billion of investment.

Public infrastructure is expanding for the same reason. A new regional hospital planned for Los Cabos is designed to serve more than 500,000 inhabitants, with 260 beds, 53 consulting rooms and nine operating rooms.

These are projects for a city becoming much larger, rather than temporary additions for tourists.

More residents create demand for housing, shops, services, roads, healthcare and commercial property. Over long periods, that supports land values throughout the urban area.

The link with luxury prices is much weaker. A local family looking for affordable housing does not remove a $1.5 million condo from resale inventory.

Demographic growth gives Cabo another long-term source of real-estate demand, particularly for land and mainstream housing. Foreign-buyer pricing will continue to depend much more on tourism, international wealth and the quality of individual developments.

Which Cabo properties are most likely to rise in price?

Cabo properties with something buyers cannot easily reproduce are the ones we would expect to rise fastest from here.

That sounds simple, but current sales data makes the distinction unusually clear.

There are more than 1,200 active sub-$1 million condos in Christie's H1 dataset, enough for roughly 26 months of supply. Million-dollar-plus homes have more than 32 months. Expensive land has far more inventory again.

Meanwhile, high-end condo prices have been rising, trophy transactions remain active and major resort communities continue attracting money outside the MLS system.

The properties we would favour are genuine oceanfront homes, exceptional ocean-view positions, completed residences in established private communities, properties with difficult-to-replicate beach or club access, and the strongest branded residences where buyers demonstrably value the brand.

Generic condos face a tougher setup. So do older villas with average locations and land whose main investment case is simply that Cabo will keep expanding.

As seen above, Cabo already has enough inventory to punish properties that buyers can easily replace. Scarcity is becoming much more valuable than the Cabo address alone.

Cabo property type	Price outlook	What drives it	Main risk
Prime oceanfront property	Strong	Genuine scarcity	Very high entry price
Exceptional ocean-view property	Positive	Hard-to-copy location	View can be project-specific
Established private resort community	Positive	Amenities and limited supply	High carrying costs
Strong branded residence	Positive	Global luxury demand	Paying too much for the brand
Good mainstream resale	Modest	Broad destination growth	Competing inventory
Generic resale condo	Flat to modest	Rental and lifestyle demand	Heavy supply
Speculative land	Weak near term	Long-run development	Extremely slow absorption

What would make Cabo property prices rise much faster?

Cabo property prices could start rising much faster if buyers begin absorbing today's large inventory while tourism and luxury demand remain strong.

The number we would watch most closely is months of supply.

If condo inventory drops from roughly two years toward one year without a major increase in listings, buyers lose some of their current negotiating power. A simultaneous rebound in closed transactions would make that change far more convincing.

Lower interest rates could help get the process started. Continued luxury resort openings would add another source of demand. Completion of new water and other infrastructure would remove some practical limits on development and ownership.

There is also a plausible wealth effect from the United States. Cabo relies heavily on affluent North American buyers, so another period of strong equity-market wealth, lower cash yields and easy travel could bring more discretionary capital into second homes.

We would turn much more bullish if several of those developments begin happening together. One new resort or one rate cut will not be enough.

What could make Cabo property prices fall further?

Cabo property prices could fall further if high inventory persists and sellers eventually start accepting much larger discounts.

That is the downside scenario we take most seriously.

Current transaction weakness has lasted long enough to matter, yet most owners are still closing relatively close to asking prices. The situation becomes more dangerous if sales stay depressed while the sale-to-list ratio starts dropping from the low-to-mid-90% range into the 80s.

Short-term rentals give us another early warning. AirDNA currently shows higher occupancy but a 15.5% drop in average daily rates in its broad Cabo San Lucas dataset. If occupancy begins falling as well, investors would have weaker revenue expectations at the same time they are competing against plenty of properties for sale.

The luxury end deserves close attention too. Q2 looked spectacular partly because nine $10 million-plus sales contributed $160.9 million. If those trophy transactions disappear, market-wide dollar volume can deteriorate very quickly even while ordinary activity barely changes.

A U.S. recession, prolonged high borrowing costs, weaker tourism or a sudden increase in owners wanting to sell would make the current inventory problem much harder to absorb.

How much could Cabo San Lucas property prices realistically rise?

For good Cabo San Lucas property, low-to-mid-single-digit annual price growth is a more believable medium-term expectation than another period of 10% or 15% gains every year.

We would use roughly 3% to 6% nominal annual appreciation as a reasonable base-case range for well-selected mainstream properties once the current inventory adjustment eases.

That range is a judgment rather than an official forecast. Cabo lacks a clean repeat-sales index covering foreign-owned luxury homes, developer sales, private deals and MLS resales together, so pretending we can forecast an exact market-wide percentage would create false precision.

The range also hides large differences.

An oversupplied condo bought at an aggressive price today could still be worth the same amount several years from now. A truly scarce oceanfront property may rise much faster. Some branded residences could set new price records while nearby older developments barely move.

A 3% to 6% base case also fits the evidence better than expecting the post-2020 boom to repeat. Tourism remains strong, Mexico-wide housing costs are rising and major developers are still investing. At the same time, Cabo resale volumes are down and buyers currently have a lot of choice.

Scenario	Likely price direction	What would produce it	Our view
Weak market	Flat to negative	High inventory + weaker U.S. demand	Plausible
Base case	~3%–6% nominal annual growth	Inventory gradually clears	Most likely
Strong market	Above ~6%	Falling rates + strong absorption	Possible
New boom	Sustained double-digit growth	Major demand shock + scarce supply	Unlikely market-wide
Prime property	Can beat market materially	True scarcity	Best upside

So, are property prices in Cabo San Lucas likely to rise?

Yes. We think Cabo San Lucas property prices are likely to rise over the next several years, but buyers should expect a selective market where the best properties do much better than the average one.

The current weakness is real. Cabo San Lucas closed sales are down, dollar volume has fallen even faster, several resale price measures have softened and much of the market carries around two years or more of inventory. Anyone buying today on the assumption that every Cabo property automatically appreciates is ignoring what the market is already showing.

The long-term case remains stronger. Los Cabos still attracts close to 3.8 million visitors a year, hotel rates remain exceptionally high, new luxury brands continue investing, population is growing, major water infrastructure is being built and Mexican housing prices are still rising nationally.

More importantly, wealthy buyers have not stopped paying record-level prices for the properties they genuinely want. The Q2 surge in $10 million-plus transactions and the strength of million-dollar-plus condos show that clearly. Money is still coming into Cabo; it has simply become much more selective about where it goes.

That changes how we would approach the market today.

The best opportunities are properties with scarcity built into them: exceptional locations, views that cannot be reproduced, beach access, proven private communities and high-quality projects that will still feel desirable when the next generation of Cabo construction arrives.

Generic inventory faces a much less exciting future. With thousands of alternatives and a constant flow of new construction, an ordinary condo can easily spend years going sideways.

Our base case is therefore a return to moderate Cabo price growth rather than another indiscriminate boom. Around 3% to 6% annual nominal appreciation looks defensible for well-selected property once current inventory starts clearing, with much bigger differences between winners and losers than Cabo buyers saw during the post-2020 surge.

The property address will say Cabo San Lucas in both cases. The scarcity behind that address is what will increasingly decide the return.

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.