Oh, What a Year!
Real estate veteran Carol S. Billups breaks down
the latest Los Cabos real estate trends
Trend-spotting real estate in Los Cabos is more than an interesting exercise; it can help time a successful retirement or maximize an investment opportunity. Each year, we pull data from the multiple-listing service MLS-BCS to share some key statistics with our readers.
This data was taken for the time period covering January 1, 2016–December 30, 2016 and the areas of San José del Cabo, Cabo San Lucas, and the tourist corridor between the two towns. The corridor is divided roughly in half: The Cabo Corridor is the portion closest to Cabo San Lucas.
How did the market perform last year? Overall sales recorded were over a quarter-billion dollars: $271,777,576 U.S. This represents a 33 percent increase over 2015. Unit sales were also up by a factor of 26 percent, which
reflects a slight increase in housing prices, particularly in the Cabo Corridor, which for several years has been the most active zone in the area and accounts for one-third of this year’s sales.
Although sales were up in 2016, looking back over several years, it appears that we are only now regaining our momentum that was interrupted by Hurricane Odile in 2014.
One trend that continues is the bias toward high-end real estate. Developers are building again in Los Cabos, but they continue to target the wealthy vacation home buyer. Very little new inventory is coming to market that is geared at the middle-class or active retiree buyer. This continues to push up the median price, which is the real estate industry’s international standard measure of affordability. Although our system does not differentiate resales from new inventory, there are anecdotal reports (including in my own experience) that this effect is raising the resale value of the more affordable homes. Unfortunately, with a glut on the market, the resale value of luxury homes appears to be stagnant at best and falling in some communities.
It is often said that real estate is more affordable in San José than in Cabo San Lucas, but our statistics show this is not the case. The median sales price (as opposed to asking price) in 2016 once again shows the San José side of the corridor is home to our priciest properties.
As in prior years, the number of condominiums versus single-family homes was roughly the same; there is no statistically significant difference showing a preference for one housing type over the other. That said, the sale of building lots continues to trail the other categories and accounts for only 20 percent of transactions in 2016.
All in all, 2016 was a good year to be a buyer in Los Cabos, and early indications would suggest 2017 will continue to grow the market. Your MLS-member real estate agent will be glad to provide more detailed information specific to your area of interest.