How's the housing market in Cabo San Lucas now?

Authored by the expert who managed and guided the team behind the Mexico Property Pack

Yes, the analysis of Cabo San Lucas' property market is included in our pack

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.

How this content was created 🔎📝

At The LatinVestor, we explore the Mexican real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Cabo San Lucas, Cancún, and Puerto Vallarta. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What's the current average sale price for houses, condos, and villas in Cabo San Lucas?

As of September 2025, the Cabo San Lucas real estate market shows distinct price tiers across property types.

Houses average $1.32 million, with premium oceanfront areas reaching up to $2.25 million and ultra-luxury homes selling between $10-28 million. The luxury villa market, particularly in the $2-5 million range, represents the largest segment of high-end sales and is considered the "sweet spot" for affluent international buyers.

Condos average $792,840 across all areas, with significant variation by neighborhood. Entry-level condos in developing areas like El Tezal start around $571,000, while premium units in established San José del Cabo command around $729,000. Marina and beachfront developments typically exceed the average condo price.

The overall residential market averages $727,000 when combining all property types, reflecting the strong presence of luxury properties that pull the average upward.

It's something we develop in our Mexico property pack.

How have prices changed over the past 3, 6, and 12 months?

Cabo San Lucas property prices continued their strong upward trajectory throughout 2025, with luxury segments leading the appreciation.

Over the past 12 months, condo prices appreciated by 9.91% year-over-year, while houses in premium areas saw dramatic increases of up to 107%. The luxury market experienced the most significant gains, particularly in oceanfront and resort-adjacent properties.

The last 3-6 months maintained this momentum, with prices continuing to rise particularly for luxury homes and premium condos. Some neighborhoods saw price increases of 70-107% year-over-year, driven by limited supply in desirable areas and sustained foreign buyer demand.

Median house prices are up slightly from the prior year, though the variation between neighborhoods has increased significantly. Premium areas far outpaced more affordable inland developments in terms of price appreciation.

What's the current inventory level, and how does it compare to last year?

Cabo San Lucas inventory levels reached record highs in 2025, creating more opportunities for buyers outside the luxury segment.

Q1 2025 inventory hit a record 2,122 houses and condos for sale, representing over 60% higher availability than previous years. This increased supply has shifted market dynamics, particularly in non-premium neighborhoods where buyers now have more negotiating power.

The luxury and resort-zone segments maintain scarce supply with fast turnover for top properties. However, less premium segments, inland markets, and some older developments now face a "buyer's market" with greater supply and longer selling times.

This inventory increase represents a significant shift from the seller's market conditions of previous years, though premium beachfront and luxury properties remain highly competitive with limited availability.

What's the average time properties stay on the market right now?

Properties in Cabo San Lucas now average 282 days to sell, reflecting the increased inventory and more selective buyer behavior.

This represents a 15.1% increase from last year's 245 days on market, indicating a slower pace particularly in non-premium areas. The longer marketing time reflects buyers having more choices and taking time to find the right property at the right price.

Condos show a different trend, with days on market dropping to 233 from 304 as prices rose and buyers focused on premium units. This suggests that well-priced condos in desirable locations still move relatively quickly.

Luxury properties in prime locations continue to sell faster than the market average, while entry-level and inland properties may take significantly longer to find buyers.

Which neighborhoods are seeing the fastest price growth?

Premium and luxury neighborhoods in Cabo San Lucas are experiencing the most dramatic price appreciation in 2025.

The Pacific, Pedregal, Medano Beach, and San José del Cabo lead price growth with increases up to 107% for houses in these premium regions. These areas benefit from oceanfront locations, established infrastructure, and high demand from international luxury buyers.

Emerging neighborhoods like El Tezal and the Cabo Corridor offer the fastest growth potential for value-conscious buyers. These areas still trade 30-40% below beachfront properties but are experiencing rapid infrastructure improvements that drive appreciation.

Marina developments and areas near the new airport expansion are also seeing strong price growth as accessibility and amenities improve. The combination of location, infrastructure development, and international buyer interest drives the fastest appreciation rates.

Which areas have the highest supply and slower sales?

Less premium segments and inland markets in Cabo San Lucas now face higher supply levels and extended selling times.

Inland markets, entry-level developments, and some older condominium projects have greater inventory availability and longer time to sale. These areas appeal to more price-sensitive buyers who are taking advantage of increased negotiating power.

Properties priced below $500,000 and those located away from beaches or major amenities tend to have the highest supply relative to demand. Older developments without modern amenities also face slower sales compared to newer construction.

In contrast, the luxury market remains extremely competitive with limited inventory and fast turnover for top properties. Beachfront locations, marina properties, and luxury developments continue to see strong demand that outpaces supply.

What are the rental yields for short-term vacation rentals versus long-term leases?

Cabo San Lucas offers attractive rental yields, with short-term vacation rentals significantly outperforming long-term leases for investment returns.

Rental Type	Gross Annual Yield	Average Revenue	Best Locations
Short-term Vacation Rentals	6-10%	$31,688 annually	Medano Beach, Marina, Downtown
Premium STR Properties	10%+	$120,000+ annually	Beachfront, Luxury Resorts
Long-term Leases	4-6%	Variable	Residential areas, El Tezal
Peak Season STR	Higher than annual	$10,000+ monthly	Tourist zones
Average Airbnb Metrics	Based on 36% occupancy	$379 ADR	All tourist areas

Top-performing vacation rental properties in well-located areas can exceed $10,000 per month during peak season. The average Airbnb property achieves 36% occupancy with a $379 average daily rate.

Long-term leases provide more stable but lower yields, typically ranging 4-6% gross annually. These work better for investors seeking predictable income without the management requirements of vacation rentals.

What's the demand like from foreign buyers compared to local buyers?

Foreign buyers absolutely dominate the Cabo San Lucas real estate market, representing approximately 60% of all property purchases as of September 2025.

International buyers, primarily from the United States and Canada, drive market demand due to favorable currency exchange rates, remote work flexibility, and Cabo's resort appeal. This foreign demand remains robust and shows no signs of declining.

Local Mexican buyers account for only about 5% of the market, with the remaining 35% consisting of other international buyers and investors. The low local participation reflects both the high property prices relative to local incomes and the market's orientation toward luxury and vacation properties.

This foreign buyer dominance creates a market that's less sensitive to local Mexican economic conditions but more responsive to international factors like U.S. interest rates, currency fluctuations, and travel patterns.

It's something we develop in our Mexico property pack.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Mexico versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

Are there any upcoming infrastructure or development projects that could impact property values?

Major infrastructure and development projects are underway in Cabo San Lucas that will significantly impact property values through 2025 and beyond.

The expansion of Los Cabos International Airport represents the most significant infrastructure improvement, enhancing accessibility for international visitors and residents. New highway connections are also improving transportation between neighborhoods and reducing travel times to key areas.

Luxury resort developments and new wellness facilities are being constructed, particularly in emerging areas like El Tezal and along the Cabo Corridor. These projects bring world-class amenities and services that increase property values in surrounding neighborhoods.

The improved accessibility and new amenities fuel continued demand, especially in emerging neighborhoods that benefit from infrastructure improvements while still offering relative value compared to established premium areas.

What's the best property type and budget range for buying to live in Cabo San Lucas right now?

For buyers looking to live in Cabo San Lucas, villas or upscale condos in the $450,000-$900,000 range offer the best combination of value and lifestyle.

El Tezal, Cabo Corridor, and San José del Cabo provide excellent infrastructure, rising property values, and access to the Cabo lifestyle without paying the full beachfront premium. These areas offer 30-40% savings compared to oceanfront properties while maintaining good appreciation potential.

Upscale condos in established developments provide low-maintenance living with resort-style amenities, making them ideal for part-time residents or retirees. Villas offer more space and privacy for full-time residents who want a true home base.

Avoid entry-level properties under $400,000 as they may lack important amenities, and avoid ultra-luxury properties over $1.5 million unless oceanfront location is essential, as these represent poor value for primary residence purposes.

What's the best property type and budget range for buying to rent out profitably?

Turnkey condos in premium locations with budgets of $500,000-$1 million+ offer the best rental profitability in Cabo San Lucas.

1. **Medano Beach properties** - Highest rental demand due to walkability and beach access2. **Marina developments** - Strong appeal to boating enthusiasts and luxury travelers 3. **Downtown Cabo San Lucas** - Easy access to restaurants, nightlife, and tourist activities4. **San José del Cabo** - Appeals to more upscale, cultural tourists5. **Beachfront or ocean-view units** - Command premium rental rates year-round

These locations generate the top vacation rental yields of 6-10% gross annually, with premium properties exceeding 10%. The key is walkability to amenities, tourist attractions, and beaches, which maximizes occupancy rates and daily rates.

Avoid inland properties or areas requiring car transportation for guests, as these significantly reduce rental appeal and profitability in the vacation rental market.

What's the best property type and budget range for buying with the goal of reselling in a few years?

Pre-construction condos and villas in the $400,000-$800,000 range in emerging neighborhoods offer the best resale potential for 2-3 year investment horizons.

El Tezal and Cabo Corridor represent the highest appreciation potential due to ongoing infrastructure improvements, developer discounts on new construction, and rapid value growth in up-and-coming areas. These neighborhoods are experiencing the infrastructure development that previously drove appreciation in now-premium areas.

Pre-construction properties offer purchase prices 10-20% below completed units, plus the appreciation that occurs during the construction period. The combination of below-market entry prices and area development creates strong resale potential.

Focus on developments with established builders, clear completion timelines, and proximity to planned infrastructure improvements like new roads, utilities, or commercial developments.

It's something we develop in our Mexico property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. The LatinVestor - Cabo San Lucas Price Forecasts
2. YouTube - Cabo Real Estate Market Analysis
3. The LatinVestor - Cabo San Lucas Property Guide
4. Search Cabo Real Estate - Q1 2025 Report
5. SJD Taxi - Los Cabos Real Estate Investment Guide
6. Karla Erick Cabo Realty - 2025 Median House Prices
7. Susana Bueno - Los Cabos Market Report 2025
8. Cabo Real Estate Services - Q1 2025 Market Report
9. BHHS Baja - Baja Sur Property Market 2025
10. The LatinVestor - Cabo San Lucas Real Estate Market