Key indicators and important trends in the Cabo real estate market

In this article, we take a closer look at the Cabo real estate market during these uncertain times. We go over some key indicators and important trends in the housing market here in beautiful Baja.

Is the Cabo real estate market looking healthy in 2022?

While not a subject we often like to remember. One can’t deny the importance of using history to prepare ourselves for the future. Such is the case with the lessons from the real estate crash and recession of the 2000s.  

As a quick refresher, the 2000s bubble crash resulted from allowing homeowners with little to no income and broken credit to buy homes with loans. Essentially incentives to promote property ownership. To the surprise of many at the time, this led to the bank lending money to people in no condition to pay it back. Such reality forced banks to keep bad loans in their books and prevented them from lending money afterward.

Eventually, mortgages dried up, and the housing market suffered a near-unprecedented price rise of 25% over four years. Now, we all know what happened afterward: catastrophic unemployment, a lengthy stabilization process, taking well up to 2019 for banks to incentivize homeowners to buy again. Last but not least, the COVID-19 pandemic and restrictive living conditions. Inflation is also lurking in the background.

COVID-19 and its effects on Cabo’s housing market

Yes, it’s no secret that COVID was a veritable one-two for the economy, general living, and the housing market worldwide, not just in North America. While recovery has been steady enough, with many jobs recovered, not everyone saw a positive outcome. As demand from the millennial generation seeks to make up for the weak late-2000s period. Home prices have began to slowly rise, with a 13.9 percent increase from 2020 to 2021.

What does this mean for Los Cabos and the rest of the Baja in Mexico? Is the housing bubble ever so near? Will beachfront property prices rise to unattainable levels in Los Cabos? Is it time to say goodbye to the paradise lifestyle that we enjoy in the Baja?

The latter is still very much uncertain, though not pessimistic. Rather than being a slope, the price and demand growth is simply a steady climb. Noteworthy, but not hectic. On the other hand, the former two remain as solid as ever, if not better.

Sales figures and housing prices in Los Cabos

Sales in the Cabo housing market are going up, no doubt about that. 2021 saw the strongest year in home and property development sales. 2100 houses and condos sold for a substantial volume of over 1.5 billion USD. Thanks to the ever-diminishing COVID restrictions of the time. The craze to enjoy the Cabo lifestyle became more evident than ever. With nearly 18 months of quarantined living and little to no flights at all. The home office trend also made multiple investors seek to make Cabo the new “beachfront home office”. That’s not all, however. While overall sales volumes have increased in Los Cabos over the last couple of years, prices have, conversely, decreased.

A minor decline in the sales of luxury homes

More specifically, individual house and condo development prices have lowered by upwards of 11%. These numbers are directly related to a decline in luxury home sales in favor of more accessible, if not pre-construction properties. On the other hand, residential sales for regular homes have suffered a bit, seeing a minor decrease in purchases, presale included. The flourishing oceanfront market is currently tightening, with the buying frenzy of people wanting to get themselves a slice of the Baja beach lifestyle.

Due to the preference for relatively low-cost housing developments rather than luxury ones, the latter (and their sellers) must compromise. In turn, this has opened up even more opportunities for aspiring homeowners looking to enter the Baja lifestyle.

With all these compelling hooks and benefits, it should come as no surprise that the future and overall living conditions of the Baja are not looking quite as doubtful compared to the real estate scene in the US and other locations.

The future of the Cabo Real Estate Market

It’s more than safe to say that the condition, and future, of the housing scene in the Baja California Sur, are as promising as they can get. A prime pick for finding the dream property, despite the unsteady times we are currently going through. Thanks to the many safeguarding layers provided by this famous Mexican getaway that is Cabo, layers in the form of multiple location benefits.

From lower taxes, consistent international cash flow, and an array of special ownership laws granted by the Mexican government as a way to motivate foreigners to buy homes. That’s not even getting into the sheer amount of investment of the Mexican government towards this paradise getaway.

The booming Cabo real estate market sees no sign of stopping soon

As such, you can consider Baja California Sur and its many go-to beach spots as not only opportunities for a quality lifestyle set in an incredible backdrop. It is a beautiful location that is also a luxury lifestyle haven that provides all the benefits of growth without the consequences that often come with it. The booming Cabo real estate market sees no sign of stopping soon. You do not need to hesitate about investing in a Cabo beachfront property this 2022.

If you’re looking to make a sound investment during these trying times of rising prices and shaky housing rates. Do consider the assured returns of the new beachfront, developments in Baja California Sur, and its many breathtaking locations.

Investing in a home in Baja means more than just lower costs, a considerable tax differential, and a great exchange rate compared to the US. The quality of the oceanfront location and its future makes Los Cabos one of if not the most sought-after real estate opportunities in the World. A dream come true, and in this day and age, those are hard to come by.

We hope that you have found this Cabo real estate market update useful. Our team of local experts would love to hear from you. Please feel free to contact us for more information about the market. If you are feeling uncertain about where the overall market is heading we invite you to read this article Is the Real Estate Market Going to Crash? 2022 Outlook.

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