Los Cabos Residential Real Estate Market Report

2024 Q2 Market Report

July 5, 2024

REPORT COMMENTARY

In the second quarter of 2024, we experienced the third-highest dollar volume quarter ever, marking the most significant quarter since 2021. Sales in the $1m and above price range contributed significantly, accounting for 75% of total sales ($337m USD out of $448.9m USD).

While the overall sales volume in Q2 decreased by 6% compared to Q1, with 352 houses and condos sold, the dollar volume increased by 10%, reaching $449m USD as opposed to $409m USD in Q2.

The $2m to $5m price remained hot representing 34.5% of the sales dollar volume at $154.9m, with 47 houses and condos sold. Leading in terms of unit volume, the $200,000 to $300,000, $300,000 to $400,000, and $400,000 to $500,000 price points saw a total of 145 houses and condos sold, amounting to $48.7m.

In Q2, prices trended upward again, with the average house price jumping by 33.9% and the median house price jumping by 81.7%, despite a lower sales volume of 129 houses. This increase can be attributed to the high dollar volume sales in the $1m and above range. Condo prices also saw an increase, with the average condo price rising by 14.2% and the median condo price increasing by 1.4%.

The average Days on Market (DOM) for houses remained steady at 150 days, while for condos, it decreased to an average of 122 days.

Inventory is holding, with 1,697 houses and condos currently for sale. Notably, over half of the current inventory consists of completed houses and condos, totaling 968, surpassing pre-construction properties for the second consecutive quarter at 729 units. Our Inventory-Months analysis on Page 15 highlights emerging price points with declining inventory, such as existing condos priced between $2-$5m (5 months) and existing houses priced between $1-$1.5m (6 months). Conversely, there are price points with abundant inventory that may require price reductions to stimulate sales, such as existing houses priced between $900,000 and $1m (36 months).

NEW IN THIS REPORT

As the market continues to adjust, price reductions are becoming increasingly common. On Page 16, we’ve begun tracking these reductions, including those that led to sales for completed properties (not pre-construction). The numbers were somewhat surprising, but they confirmed our intuition: price reductions are significantly more frequent now. In fact, there were 649 price reductions through Q2 2024, surpassing the total of 581 for all of 2023.

LOS CABOS MARKET DIRECTION

Buyer interest in the market remained strong Q2, particularly for properties priced above $1m USD, which could emerge favoring sellers. However, there are other price points which may require price reductions to clear inventory. The market continues to stabilize. For the second consecutive quarter, it’s neither a buyer’s nor a seller’s market.

ABOUT THIS REPORT

This report is produced using BCS MLS Data. It is limited to the Los Cabos Municipality apart from overlaps on the East Cape and Pacific Zones. Around Los Cabos, there is also significant activity that happens off MLS. These tend to be significant high-end developments that have their own way of marketing. These developments include The Cove Club, Chileno Bay, El Dorado, Montage, Maravilla, and Costa Palmas. As a result, this report is not a complete view of all real estate activity in Los Cabos. This report also does not report on land sales. Land sales also took off in the past two and a half years for both individual building lots and developer parcels.

All sales data in this report is based on the Under Contract Date. This is the date when the sale was consummated but not the date when the sale closed, and the title was transferred. Market reports published by other brokers and agents will typically use the Sold (or Closed) Date, which can be up to six months after the Under Contract Date. We feel using the Under Contract Date better represents market activity and timing. Consequently, prices and price volumes will not be entirely accurate until the closed date when the sold price is reported in MLS. In our current Market, with properties selling with very little off from the list, this difference is inconsequential.