Twenty one percent. Twenty. One. Percent. That is the incredible growth of the real estate market in Los Cabos in 2017. What are the hot properties, and what kind of trends can we see? Let’s break it down to find out.
Here are some of the highlights of real estate ’17, but first let’s get past the usual disclaimers. The statistics I’m presenting here were taken from the FLEX MLS system, which is the official multiple listing service used by the real estate community in Baja Sur. Although it is used state-wide I limited the data to the cities of San Jose del Cabo, Cabo San Lucas, and the tourist corridor that connects them. The corridor is split into two sections, roughly in the middle with eastern half creatively entitled “San Jose Corridor” and its western counterpart known as the Cabo Corridor. Although the data is considered reliable, there may be some ommissions due to agent input error. For this report ‘sold’ will refer to closed sales in which the property has officially changed hands. We might also reference ‘pending’ deals in which an offer has been accepted but the sale process is not complete. All data was collected on December 29, 2017 and covered the calendar year 2017. So, disclaimers done let’s look at that data.
As you can see, the volume of real estate sales has rebounded from the aftermath of Hurricane Odile in 2015. In addition to the sold properties at year end there were 140 properties valued at $84,041,010 waiting for the process of closing to take place. We do not know the exact value as the true sale price is not revealed until after closing, but we do know that in 2017 sellers accepted offers between 90-95% of asking price. So we can conclude that in 2017 the Los Cabos real estate community sold more than 400 million dollars’ worth of property!
One of the great flaws of this report is that I’ve been at it so long. I started tracking the four sub-areas before some new developments were underway. So although it tracks Puerto Los Cabos in San Jose it misses Quivera (considered in the system as Pacific South, not Cabo San Lucas). As Quivera is extremely popular right now with both their Copala and Coronado offerings we can assume the actual sales value is higher.
What exactly did they sell? In terms of property type, dealing in units, condos were more popular than single family homes. As in the previous year, sales of home sites lagged the sale of finished product. This reflects two factors. One is that developers have bought up most of the land and their margins are such that they only offer finished product. There are some older developments where custom home sites are still offered, and of course re-sales from individuals make up the rest of the inventory, but there are simply fewer available for sale. The other factor is the great ‘reset’ of the housing market a few years ago. When property values fell drastically about 8 years ago it became cheaper to buy a finished home than build a new one, even considering the cost of up-dating it.
chart 2 and 3
But the range of prices for these options varied greatly by area. Here are the median sold prices by type and region.
Clearly there is a huge difference in property value depending on location. The San Jose Corridor is home to several extremely high-end developments such as Querencia, Palmilla, and Chileno Bay which is reflected in their very high median price point. The Cabo Corridor, however, has some very nice yet also very affordable options, primarily on the inland side of the highway. There are pricier offerings on the Cabo Corridor, such as the Twin Dolphins development but that project chooses not to report sales via the MLS. That said, when I am working with clients who are seeking a property in the $200-400,000 price range I immediately begin thinking of the inland Cabo Corridor. There are some fabulous yet affordable offerings there, and in fact the views from the inland side of the road are actually superior to the ocean side!
So these numbers paint the macro picture, what is the micro view? In the past year I’ve seen diminished inventory for affordable, retirement-type homes and in fact I’ve noticed property values for the inland Cabo Corridor beginning to rise. Properties in the $500,000 to one million price range continue to take a long time to sell but that may change with the anticipated re-introduction of commercial mortgage lending late in the first quarter of 2018. The number of U.S. and Canadian citizens moving to Mexico full time or as snow birds continues to increase, and the interest in investment rental properties is also growing. All in all, 2017 was a good year, and I’m anticipating 2018 to be even better.
Carol Billups is Broker/Owner of Cabo Realty Pros, a full service real estate agency in Cabo San Lucas. She has been working with buyers and sellers for over 17 years and still thinks hers is the best job on earth. She is the real estate columnist for Los Cabos Magazine and a frequent contributor to this site. Her website is www.caborealtypros.com. She can also be reached at firstname.lastname@example.org or by phone at 044-624-147-7541 or (760) 481-7694 from the US or Canada.
©2018 Carol S. Billups Reprinted by permission