With tourism back and bigger than ever, Los Cabos, Mexico, is emerging as one of the biggest second home markets in North America, with many holiday-ers opting to become homeowners.
The world-class destination at the southern tip of Mexico’s Baja California Peninsula is one of the strongest real estate markets in the country, with an annual growth of 6% in overall sales for the last five years, according to a N.Y. Times report citing research from CBRE Hotels.
“At this moment, we are experiencing a seller’s market,” says Ramiro Palenque Bullrich, owner of 2Seas Los Cabos, the area’s leading luxury brokerages. “As a result of the low inventory, sellers have more control on the price they accept on their properties in the offers.”
Increased interest from American buyers has left developers scrambling to meet the demand, Bullrich says. “About 80% of our buyers are from the U.S.”
Now with a new direct flight to and from Europe, the Los Cabos real estate market—an area that includes the two resort towns of Cabo San Lucas and San José del Cabo—is set to continue on a path of rapid growth.
Bullrich recently shared his thoughts on the state of the Los Cabos luxury market, including what he expects to see in the second half of 2022. His comments have been edited for clarity.
What does Los Cabos’ market look like in 2022?
RPB: In Los Cabos, the high-end market is above $1 million. It is a very hot market now. For me, it is the best I’ve ever seen in 15 years. This is truly a bull market. It’s being driven by new developments with new construction at all price levels. The current resale market accounts for about 90% of sales. All that new inventory is not ready. We are seeing strong demand and buying pre-construction. Most of that will be ready in a year or two. That high-end market is 10 to 15 % of overall residential sales.
What market segments are the most active?
RPB: The properties priced under a million are selling the most. That segment is growing more than 10% annually. We have less inventory prices are rising in all markets with increases of about 5-10%.
What areas are buyers now coming from?
RPB: Of our buyers from the U.S., 50% are from California and 20% from Texas. We are also seeing buyers coming from New York, Chicago and Mexico City. The Canadian market is starting to grow. We now have a direct flight from Madrid and our Tourism Board is working on direct flights from London and Frankfort. So, Cabo is opening to Europe. Since the pandemic began more buyers are living here full-time since they can work remotely. That is good for our economy. Why not be at the beach if you can live and work anywhere?