A detailed look into the current buyer market reveals 50% of buyer's in Cabo San Lucas are
choosing to purchase newly constructed homes and condos. We reviewed the statistics for the
Cabo San Lucas and Cabo Corridor areas reported sales and found the results enlightening. In the past 12 months 76 condos were reported sold. Of the 76 sales 42 were new construction, 34 were resale/pre-owned. Houses faired a bit better with 107 reported closings. Of the 107 sales 53 were newly constructed homes. There is no denying the Portus group is giving the market a run for it's money. Leading the way in both condo and housing new construction is Ventanas (phase 3) and Cabo Eco Park (Phase 4). Considering Portus currently has a waiting list of buyers with delivery dates as far out as 24 months.it is apparent buyers are leaning toward new, clean, secure developments packed full of amenities. The buying trend is moving away from the old rule of thumb, location, location, location and convenience of the downtown area and into the sprawling outer limits of town in either direction, the Corridor or the Pacific side.
Sellers offering resale properties, especially those in older, original condition are experiencing the impact of new communities springing up. The statistics show older homes and condos remain on the market all most twice as long as new units. Of the 76 condo sales resales remained on the market for an average of 426 days with average final sales prices below 20% of the original asking price. New condos averaged 234 days on the market with reported sales prices only 5% below original list price. Single family homes reflect the same trend. Of the 107 reported sales in the last 12 months resale homes average 416 days on the market with the same 20+% reduction in sales price vs original list price. New construction reveals an average of 181 days on the market with under 8% reduction in sales vs list price.
A very small number of buyers are choosing to build versus buy new or resale. 33 land sales were reported in Cabo San Lucas and the Cabo Corridor in the past 12 months. Of the 33 land transactions the properties averaged 398 days on the market. 57% of all lot sales occurred in the elite, secure developments of Pedregal, Chilleno Bay, Cresta del Mar and Rancho Paraiso. The trend of purchasing existing as opposed to constructing is expected to continue until the existing market sees more of a recovery and prices in existing inventory rise. Currently the average sales price per square foot for new housing is $131 USD and resale housing coming in at $132 USD. New construction costs are paralleling or right on par with existing pricing. Until which time we see the building costs fall significantly below existing construction cost per square foot we expect lot sales to remain somewhat stagnant. The majority of buyers will simply select the convenience of purchasing existing turn-key housing. Currently there are 265 houses and 173 condos actively being marketed for sale in Cabo and the Corridor leaving buyers more than their share of purchase options.
The good news is that Cabo remains affordable and great deals are still out there to be made. With Cabo being known for it's wealth and expensive Villas it might come as a surprise to most that of all of the inventory sold over the last 12 months only 2 of the 76 condos and 14 of the 107 houses brought sales prices of over $1,000,000. Proof that Cabo is still affordable to most. Even better news, many sellers of resale properties are recognizing the need to either upgrade their properties to fit the wants and needs of our current buyers or are conceding to practical price reductions to balance the costs of renovation the new buyers will be faced with. It is simple, buyers do not desire to engage in the task of construction/remodel hassles unless the sales price warrants the task.
Sellers need to be aware of the current market conditions so that they can make educated decisions when pricing their properties for sale. If they truly wish to sell their properties in a reasonable amount of time they need to thoroughly evaluate the competition. Trends are always changing in all real estate markets. Our Cabo market is no different. Buyers have many options and they are demonstrating their demand leans towards newer construction in gated communities with extensive amenities. It currently remains a buyers market and this trend is not expected to change anytime soon.
By Cyndi Williams, Broker, Cabo Premiere Investment & Realty , Office Phone - (624) 158-8650