What $500,000 to $1 Million Buys You in Cabo Right Now

Why $500,000 to $1 Million May Be Cabo’s Most Interesting Buyer Market Right Now

If I were shopping for real estate in Los Cabos today, one of the first places I would look is between $500,000 and $1 million.

Not because prices have collapsed. They haven't. It's because buyers in this range have something they haven't always had in Cabo: choices and negotiating leverage at the same time.

There is a good amount of inventory competing for buyers right now, and when sellers have competition, buyers don't have to make as many compromises.

The compromises buyers used to make

At lower price points in Cabo, buying a property has traditionally involved trade-offs.

Do you want the ocean view or the extra bedroom?

Do you want a better location or more square footage?

Do you want a pool and amenities or a newer property?

Do you want a three-bedroom with a view that could eventually be obstructed, or a two-bedroom with a view that is much more likely to remain protected?

Once you move into the $500,000-to-$1-million range today, there are enough properties on the market that buyers can be more selective about those decisions.

That is important.

Buyers have leverage again

The overall market has slowed from the pace we saw several years ago.

Our latest numbers showed Los Cabos sales volume running approximately 15% below the previous year. Earlier in the year, that gap had been closer to 25%, so the market has actually been improving.

But properties are still taking time to sell.

Across the broader Baja market we analyzed, approximately 74% of recent home and condo sales took more than 120 days.

Four months on the market changes the psychology of a seller.

A seller who has been listed for five or six months may look at an offer differently than someone who put their property on the market two weeks ago.

That doesn't mean every seller is desperate or that buyers should throw out ridiculous offers. It means there is room to negotiate when the data supports it.

Under $1 million is where most transactions actually happen

There's another reason I find this segment interesting.

Approximately 79% of Los Cabos real estate transactions in the data we analyzed occurred below $1 million.

That surprises some people because Cabo is increasingly known internationally as a luxury real estate market.

And it is.

In fact, while almost 80% of transactions happened below $1 million, approximately 70% of total sales volume came from properties above $1 million.

Both things can be true.

A relatively small number of multimillion-dollar transactions generate an enormous amount of dollar volume, while the majority of actual buyers are purchasing properties below the $1 million mark.

What would I look for?

If I were buying between $500,000 and $1 million right now, I wouldn't necessarily be looking for the property with the biggest discount.

I'd be looking for something that's difficult to replace.

That might mean a protected ocean view.

It could mean walkability, beach access, a larger terrace, an additional bedroom, good parking or a development with a strong track record.

I'd also look closely at properties that have been sitting on the market.

Sometimes there is a good reason a property hasn't sold. Other times, the seller simply started too high and the market never responded.

That's where knowing the comparable sales and listing history becomes important.

Don't confuse leverage with a distressed market

I wouldn't describe Cabo today as a distressed real estate market.

There are still major transactions happening, luxury communities continue to generate significant volume, and we've actually watched the year-over-year sales deficit narrow.

But it is a more balanced market.

And balanced markets can be very good environments for buyers.

You have more time to compare properties. You have more inventory to choose from. You can investigate the development, inspect the property and understand exactly what you're buying without feeling like somebody else is going to take it tomorrow.

For buyers between $500,000 and $1 million, that combination makes this one of the more interesting parts of the Los Cabos market right now.

Fletcher Wheaton
Fletcher@remexico.com

Mitch McDonald
Mitch@CaboRealEstate.com