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Is Los Cabos real estate cooling down?

Is Los Cabos real estate really cooling down now?

Yes. Los Cabos real estate has cooled clearly from the boom years, with fewer closed sales, much more inventory and far more negotiating room for buyers.

The cleanest year-over-year evidence comes from Christie’s Real Estate Cabo. Its H1 2026 MLS review counted 797 closed transactions across the Baja markets it tracks, down 17.6% from H1 2025. Dollar volume fell even faster, from $866.7 million to $670.9 million, a 25.2% drop.

Berkshire Hathaway HomeServices Baja found almost the same pattern when it isolated Q2: 399 properties sold, down 13.8% from the same quarter a year earlier, while total sales volume fell 26.6%.

Those two independent MLS reviews point in the same direction. Los Cabos is moving fewer properties and fewer dollars than it was a year ago.

There is one important complication. Q2 was stronger than Q1 inside 2026. Berkshire Hathaway measured a 30% quarter-over-quarter jump in dollar volume and a 16% increase in units sold. Cabo Real Estate Services also recorded a strong rebound in dollar volume during Q2.

So we are looking at a market that has cooled materially from its previous level but is still capable of strong quarters. The slowdown is real; the idea that Los Cabos is simply getting weaker every quarter is too simplistic.

Why do Los Cabos prices still look high if the market is slowing?

Los Cabos prices can still look surprisingly strong because a handful of ultra-expensive sales can completely distort the average.

The latest Cabo Real Estate Services report is a perfect example. Q2 residential dollar volume reached about $456 million, while only 293 properties went under contract. Nine sales above $10 million generated $160.9 million by themselves.

That means roughly 3% of transactions produced more than 35% of the quarter's dollar volume.

The effect on averages was enormous. The average residential selling price jumped 58.7% from Q1 to about $1.56 million. The median increased much less, reaching $525,000. Cabo Real Estate Services attributed much of the average-price jump to a different sales mix rather than broad appreciation across ordinary homes and condos.

This is why headlines about “average Cabo prices” can be misleading these days. A few extraordinary deals in places such as Palmilla, Chileno Bay, Querencia or other prime communities can lift the average while a normal condo seller is cutting the asking price after six months on the market.

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Are fewer homes and condos actually selling in Los Cabos?

Yes. Los Cabos is currently closing fewer homes, condos and land deals than a year ago, so the slowdown reaches beyond one property type.

Christie’s H1 2026 data counted 278 home sales, down 15% from the previous year. Condo transactions fell 17.5% to 325. Land transactions dropped 21.1% to 194.

The geographic spread is just as important. Cabo San Lucas and the Cabo Corridor recorded 258 sales, down 16.2%. San José del Cabo and its corridor fell 14.2%. Pacific-area sales declined 27.1%, while the East Cape fell 20.3%.

When every major zone in the same dataset records fewer sales, it becomes hard to explain the slowdown as a problem confined to one development or one type of buyer.

The drop is also much larger than the difference between a strong and weak month. We are comparing six months of activity with the same six months a year earlier.

Does Los Cabos have too many properties for sale now?

Yes. Los Cabos currently has far more inventory than buyers are absorbing, and that has changed how the market feels on the ground.

Cabo Real Estate Services counted 2,134 active houses and condos in Q2. That was actually an improvement from the record 2,320 listings seen in Q1, so inventory has started moving in the right direction.

The bigger story appears when we zoom out.

In Q1 2025, the same report counted 2,122 active houses and condos. Q2 rose to 2,238. Inventory remained above 2,100 in Q3 and later reached 2,320. Current levels therefore remain dramatically higher than the tight conditions buyers experienced earlier in the post-pandemic boom.

The latest report calculated around 15 months of inventory overall: 14 months for houses and 16 for condos.

We should be careful with the usual American rule of thumb that six months always equals a perfectly balanced market, because Los Cabos is a heavily cash-driven second-home market with unusual sales cycles. Still, 15 months of supply alongside a 42% sales-to-new-listing ratio says something pretty simple: buyers have options.

When a buyer can compare 10 similar units rather than fight over two, pricing mistakes become much harder to hide.

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Are Los Cabos properties taking much longer to sell?

Yes. Los Cabos properties are sitting on the market for months now, and condos remain particularly slow.

Cabo Real Estate Services measured 151 average days on market for houses in Q2 and 195 for condos. The house figure improved sharply from 197 days in Q1, which is one of the better recent readings in the market. Condo marketing time moved slightly higher from 191 days.

Christie’s H1 numbers tell an even more striking story when the market is split by price. Homes below $1 million averaged 250 days on market, while million-dollar-plus homes averaged 249. Condos below $1 million averaged 260 days.

The toughest category in Christie’s dataset was condos above $1 million: 557 average days on market.

That is about a year and a half.

We would never treat 557 days as a normal “hot luxury market” number simply because some record-priced properties are selling elsewhere. It shows how selective buyers have become. Expensive property can still sell at spectacular prices in Los Cabos, but buyers are perfectly willing to ignore the wrong unit for a very long time.

Are Los Cabos sellers finally accepting lower offers?

Yes. Los Cabos sellers are giving buyers considerably more room on price now, especially in the house market.

Cabo Real Estate Services reported that Q2 houses sold for an average 87.8% of their original list price. Condos averaged 92.1%.

A house originally marketed at $2 million and eventually selling at 87.8% of that price would imply roughly $244,000 between the original ask and the closing price. Individual transactions vary, of course, but the average gap is large enough to matter.

Price reductions have also become routine. Cabo Real Estate Services counted 1,193 reductions during 2024. That jumped to 1,640 in 2025, an increase of roughly 37%.

Through the first half of 2026, it had already recorded 1,049 reductions on completed homes and condos. Only 176 of those reduced properties had sold by the time of the report.

This is one of the clearest changes since the frenzy. Sellers can still get very good prices for the right property, but simply listing high and waiting for a buyer to catch up is working less often.

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Are Los Cabos property prices actually falling?

In parts of Los Cabos, yes. Broadly speaking, however, prices are moving in very different directions depending on what someone is buying.

Christie’s H1 figures put the overall average MLS sale price at about $842,000, down 9.3% year over year.

Homes were much weaker. The average home sale price fell 24.1% to around $1.3 million.

Condos went the other way. Their average sale price rose 20.1% to roughly $740,000 even though the number of condos sold declined 17.5%.

Christie’s more detailed price buckets help explain that apparent contradiction. Condos below $1 million averaged about $394,800, down 6.4%, while condos above $1 million averaged almost $2.89 million, up 26.2%. Sales of those million-dollar-plus condos increased 9.8%.

The market mix shifted upward at the luxury end while ordinary condo sales weakened.

So if someone asks whether “Cabo prices are falling,” we need to know which Cabo. A sub-$1 million resale condo is currently behaving very differently from an exceptional branded residence or oceanfront property.

Are two-bedroom condos the weakest part of Los Cabos real estate?

Yes. Two-bedroom condos currently look like the clearest oversupplied part of the Los Cabos housing market.

Cabo Real Estate Services counted 658 two-bedroom condos for sale in Q2, with a total asking value of about $319 million.

During the same quarter, 226 new two-bedroom listings entered the market while only 92 sold. Sales therefore equaled about 41% of new listings.

At the current absorption pace, the segment had roughly 25 months of inventory.

There is a specific reason this category has become crowded. Many pre-construction condos bought during the 2021–2022 boom have now been completed. Some original buyers are putting those units back on the market just as developers continue selling remaining new inventory.

A buyer can therefore compare an older resale, a nearly new resale and a developer unit in the same broad price bracket.

That is exactly the kind of market where sellers start competing with each other rather than buyers competing for the same property.

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Is Los Cabos luxury real estate slowing too?

Yes, but the ultra-luxury part of Los Cabos is holding up far better than the broader resale market.

Q2 produced nine residential transactions above $10 million worth a combined $160.9 million, according to Cabo Real Estate Services. The previous quarter had only one deal above $10 million.

Properties above $1 million accounted for 80% of Q2 residential dollar volume.

Christie’s community data adds more context. Palmilla recorded 14 home sales in H1 2026. The average price per air-conditioned square foot reached about $1,520, slightly higher than the comparable period a year earlier. Average sale price remained close to $6.9 million.

Quivira showed a similar pattern in price per square foot: six H1 home sales at roughly $825 per square foot, slightly above the previous year.

Luxury buyers are therefore still spending serious money in the best-known communities.

Liquidity has become less dependable, though. Christie’s counted only 76 MLS home sales above $1 million across its broader coverage during H1, down 31.5% year over year, and that segment carried 32.4 months of inventory.

The useful distinction today is quality. A rare home in Palmilla can keep attracting wealthy buyers while an expensive but replaceable listing spends most of a year waiting.

Is Cabo San Lucas cooling faster than San José del Cabo?

Yes. The latest MLS numbers show Cabo San Lucas weakening a little more than San José del Cabo, especially when we look at dollar volume.

Christie’s combines Cabo San Lucas with the Cabo Corridor and recorded 258 H1 sales there, down 16.2% from a year earlier. Dollar volume fell 28.3% to $160.5 million.

San José del Cabo plus its corridor recorded 217 sales, down 14.2%, while dollar volume fell 23.9% to $323.5 million.

Both sides have cooled. Cabo San Lucas simply had the larger decline on both measures.

Still, those broad zones contain very different neighborhoods and products. A downtown Cabo condo, a Pedregal villa and a new Cabo Corridor branded residence should never be treated as the same market.

As the easy boom has faded, those local differences are becoming more visible again.

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Is weaker tourism starting to hurt Los Cabos real estate?

Possibly. Tourism is still strong in Los Cabos, but the newest international air-traffic figures are soft enough that we should watch them closely.

The tourism base remains huge. The Los Cabos Tourism Board says the destination received nearly 3.8 million visitors in 2025. Average hotel occupancy was around 70%, average daily room rate was close to $440, and almost 80% of the destination's more than 22,000 hotel rooms sat in the five-star category.

More recent airport traffic has weakened.

Grupo Aeroportuario del Pacífico reported 4.45 million passengers through Los Cabos airport during the first seven months of 2026, down 5.4% from the same period a year earlier.

International traffic fell more sharply, from roughly 3.01 million passengers to 2.79 million, a 7.2% decline. In July alone, international passenger traffic was down 16.6% year over year.

Domestic traffic partly offset that weakness and actually rose 7% in July.

One month does not tell us where the property market goes next, so our confidence is lower here than in the inventory or sales data. Still, foreign visitors matter disproportionately to Los Cabos because many US and Canadian owners first discover the market as tourists.

If the international decline continues through several more reporting periods, the cooling case becomes stronger.

Is all the new construction making the Los Cabos slowdown worse?

For condos, yes. New supply is making competition tougher just as resale demand has cooled.

The clearest evidence comes from the two-bedroom segment, where recently delivered pre-construction units are feeding the resale market. With 658 active units and 25 months of inventory, owners now compete against other resale sellers as well as developers.

Yet developers are still making major long-term bets on Los Cabos.

Amanvari has now opened on the East Cape. Grand Hyatt says its 301-room Los Cabos resort at Oleada is due to open later this year. The Los Cabos Tourism Board also points to St. Regis, Soho House and more branded-residence projects in the next phase of luxury development.

This combination is important. More construction can weaken prices for ordinary, interchangeable inventory while simultaneously making Los Cabos more attractive as a luxury destination.

We should therefore expect a wider gap between generic housing and scarce premium product. New development adds competition at one end while creating new reasons for wealthy buyers to keep coming at the other.

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Has Los Cabos already become a buyer's market?

For much of the resale market, yes. Buyers in Los Cabos currently have more time, more choice and considerably more negotiating power than they had during the pandemic-era rush.

The evidence lines up unusually well here: around 15 months of overall inventory, a 42% sales-to-new-listing ratio, 25 months of supply in two-bedroom condos, lengthy marketing periods and more than 1,000 price reductions already recorded this year.

Christie’s H1 data makes the imbalance look even larger in several categories. Sub-$1 million condos carried 25.8 months of supply. Million-dollar-plus condos had 28.3 months. Homes above $1 million reached 32.4 months.

Land was weaker again, with more than 100 months of inventory in the $1 million-plus category.

That does not mean every buyer should make an aggressive lowball offer. A genuinely rare oceanfront property can still have several interested buyers.

For a conventional condo or a house with close substitutes nearby, however, the buyer now has leverage that simply was not available when inventory was disappearing quickly.

What would make the Los Cabos slowdown genuinely serious?

Los Cabos would enter a much more worrying phase if falling transaction activity spread into sustained median-price declines while inventory and foreign demand deteriorated again.

For now, several indicators stop us from calling this a serious downturn.

Inventory has already eased from 2,320 active homes and condos in Q1 to 2,134 in Q2. Q2 transaction activity also improved from Q1. Ultra-luxury buyers are still closing eight-figure deals, and major hospitality groups continue investing in the destination.

We would become much more negative if those supports disappeared together.

The first thing to watch is inventory. A renewed move well above the recent record while sales keep falling would put sellers under more pressure.

The second is median pricing. Average prices are too distorted by luxury transactions. Several consecutive declines in median prices across both homes and condos would give us much stronger evidence of broad depreciation.

The third is international tourism. The recent 7.2% decline in year-to-date international airport traffic is already a warning worth following.

Finally, the luxury tier matters because it currently hides some of the weakness in headline dollar volume. If eight-figure sales dry up while ordinary inventory remains high, the overall market numbers could deteriorate quickly.

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So, is Los Cabos real estate cooling down?

Yes. Los Cabos real estate has clearly cooled, and describing the current market any other way understates how much buyer behavior has changed.

The strongest evidence is broad rather than dependent on one statistic. H1 MLS transactions are down 17.6% year over year. Dollar volume is down 25.2%. Every major geographic area in Christie's comparison recorded fewer sales. Inventory remains high. Properties commonly take many months to sell. Price reductions are widespread, and buyers are closing homes well below original asking prices.

At the same time, the latest evidence does not support the idea of a Los Cabos real estate crash.

Q2 improved from Q1. Active inventory has come down from its recent record. Ultra-luxury demand remains capable of producing nine $10 million-plus deals in a single quarter. Premium communities such as Palmilla can still hold very high pricing, and major hospitality brands continue opening or building in the region.

Our conclusion is fairly sharp: the broad Los Cabos resale market is now a buyer's market, with the clearest weakness in condos and other properties that have plenty of substitutes. The best ultra-luxury properties are living through a very different cycle.

The boom-era assumption that almost any well-located Cabo property could be listed aggressively and still find a buyer has broken down. These days, price, property type and exact community matter again.

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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.