While life has returned to normal since the pandemic, the resiliency of Los Cabos continues strong. I have personally valued real estate within most every development in Los Cabos over the past 20+ years and have seen and documented the continual rise of hospitality and second-home real estate in the Los Cabos region. For me, strong demand for valuations, appraisals, market studies, and feasibility studies, which I perform, have allowed me to gather and analyze comprehensive market data that I use to produce the most supportable and reliable real estate trends in the industry. In this article, I use these trends and experience, to opine on the near-term future of Los Cabos second home and hospitality real estate. I trust that these trends will aid in you and/or your client’s investment decisions in Los Cabos real estate. Please feel free to share this article with colleagues, clients, and friends.
International visitor arrivals to Los Cabos during 2022 saw more than a 25% increase over 2021 arrivals, an all-time high. In part, the increase was still part of the recovery from the pandemic. More pertinent to Cabo’s near-term future are 2023 arrival statistics, which increased about 7% over 2022. As an analyst who tracks other Latin America and Caribbean destinations, as the return of tourists has been spread over these competitive destinations, which were restricted much longer than Los Cabos, seeing Cabo’s 2023 increase indicates that Los Cabos is a top destination of choice. Los Cabos is one of few Latin America and Caribbean destinations that have surpassed pandemic high arrival levels.
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More tourist arrivals equate to more demand for additional hotels and continued strong real estate sales. I have gathered sales volume and data from Los Cabos, including resales and all developer sales at every significant project in Los Cabos, which shows that real estate sales volume saw it highest levels ever over 2021-2022. As shown in Exhibit A, the key point to my findings is not that volume is down from 2021-2022, but that 2023 sales volume still exceeds, by a wide margin, the pre-pandemic highs of 2017, surpassing (percentage) most competitive resort areas.
Given visitor arrival trends, new hotels planned and under construction, the safety of Los Cabos, and the dynamics of many more repeat visitors choosing Los Cabos over competitive resort areas, I fully believe that this annual sales volume will continue strong and increase in future years, not only due to price increases, but additional new developments seeing successful sales.
My recent research indicates that even with the appreciation that occurred between 10% to 40% over 2021-2022 in most Los Cabos developments, 2023 price appreciation is evident. From my many appraisals in Los Cabos, including within all high-profile developments, I have strong comparison data that supports continued real estate appreciation. Feel free to call or email me and I will be happy to share my current findings.
Conclusion
With the continued strong sales volume and increasing visitor arrivals, demand for vacant land for future residential/hospitality development should continue to be healthy, especially along the Los Cabos corridor where there are very few vacant parcels available for development. Demand is pushing up the East Cape and Pacific side and areas such as La Paz and Todos Santos are also enjoying increased demand. Given the dynamics shown in this market brief, I anticipate Los Cabos to be strong for many years to come. With over 20+ years’ experience tracking the Los Cabos second home and hospitality real estate market thoroughly, and knowing each significant development intimately, I think my knowledge and experience gives my opinions good merit.
For more information about this report, please contact:
Byron Bridges, MAI, MRICS
First Vice President
Valuation & Advisory Services
m: +1 520 903 8962
e: byron.bridges@cbre.com
w: www.cbre.com/byron.bridges
l: https://www.linkedin.com/in/byron-bridges-mai-mrics-96a55456/
Byron Bridges is a member CBRE’s Latin American Valuation (appraisal) and Advisory team and is the most experienced and trusted appraiser in the region. He has performed over 1,000 appraisals and market studies in Mexico and Latin America markets over the past twenty-three years, including nearly every significant development in the Los Cabos region. Bridges’ areas of concentration include the oceanfront beach resorts of Mexico, Costa Rica, and Belize, and other Latin American countries. Within Baja California Sur resort areas, he has completed extensive valuation and consultation work in Los Cabos (Cabo San Lucas, San Jose del Cabo), East Cape, Todos Santos, the Pacific Ocean area, La Paz, and Loreto; in Quintana Roo, Riviera Maya, Playa del Carmen, Cancun, Tulum, Cozumel, Isla Mujeres, and Riviera Maya; in Jalisco and Nayarit, Puerto Vallarta, Punta Mita, Nuevo Vallarta, Sayulita, and the Riviera Vallarta; in Baja California, Rosarito, Ensenada, and San Felipe; in Sonora, Puerto Peñasco (Rocky Point) and San Carlos/Guaymas; in Costa Rica, Guanacaste, and Jaco. Byron Bridges, MAI, MRICS can be reached at byron.bridges@cbre.com or 001-520-903-8962.
