Predictions and Market Outlook for 2024
Looking ahead to 2024, the real estate market in Baja California Sur is stabilizing and does show signs of growth. This forecast suggests that while the market might not reach the peak activity of 2022, it is likely to perform better than in 2023. That outlook is vital for buyers and sellers as they strategize their moves in the market.
Buyers might view the coming year as an opportune moment to invest, anticipating future growth and stability. Foreign investors are drawn to Mexico due to its potential for rental income, especially in tourist areas, and the possibility of property appreciation.
On the other hand, sellers need to align their expectations and strategies with these market predictions, considering pricing their properties competitively to attract discerning buyers. Prices to date in 2024 have been 20-40% higher per property than just 12 months ago. This increase is, in part at least, due to a lack of properties on the market.
There is only ‘so much’ ocean-front/beach-front space available.
For that reason, those that are available are considered luxury properties, and bring with them appropriate price points.
Ocean view properties in Los Cabos typically sell at lower prices than comparably located properties in the USA. In addition, Mexico, in general, offers lower property tax rates. But, of course, there are always exceptions. The Wall Street Journal confirmed in 2022 that a “yet-to-be-completed” luxury villa on Cabo San Lucas’ Pacific Coast had sold for over US $15 million. There are properties here as spectacular as any in the world and priced accordingly.
Most of that beach or ocean access property has been bought for Resort Community developments. And most of those are still in pre-construction. As a Seller, we must remember that Cabo San Lucas Real Estate was once purchased by an ‘older, retiring generation’ for inheritance purposes. Today’s buyers are 30-50 years old. The dynamics of world travel, inheritance monies, and employment that pays higher wages and benefits, will affect their decisions to purchase property around the world.
- As a Buyer, we must remember: prices in 2024 and beyond may seem high since your last visit to the area. However, this is a top 10 resort destination, currently awaiting the completion of 10 high-end resort/hotels charging from $250-$1200/night.
- This is a ‘secondary home-purchase’ market, and though prices may rise and fall, the costs of daily living compared to the amounts you might receive in vacation rental income is something to be studied judiciously. An ‘asking price’ on a property is just that. Any agent worth their commission has informed their seller to expect to negotiate.
Strategic Advice for Buyers and Sellers
For buyers, the current market presents a unique opportunity to find properties that offer great value in emerging areas and specific communities. The key to capitalizing on these opportunities is to work with real estate agents who have a deep understanding of the market dynamics. These agents can offer insights into future trends and potential investments for the future.
Sellers need to be realistic with their pricing strategies in this shifting market. Overpricing can lead to increased days on the market and eventual price reductions. It’s essential for sellers to align their expectations with the current market realities. Working closely with their agents to price their properties appropriately can produce an immediate sale.
Seek out an agency and an agent who are licensed in Los Cabos Real Estate Sales
It’s important that person is someone you can communicate well with. Trust is imperative. Your success may depend on their length of time serving clients and their standing within the Real Estate Community.
Spend time either in person, or via telephone to let your chosen agent understand your needs fully. It matters not whether you are a buyer or a seller. Your licensed representative must have a full and complete understanding of your vision and the steps needed to bring that to fruition.
The increase in licensed real estate professionals in the region has exploded in alignment with market growth. Where once there were a mere 200 agents in Los Cabos, today there are well over 2,000. The Mexican government has mandated agency testing and licensing requirements. That alone can intensify the competition in the market for both listings and sales.
Changing market dynamics is of crucial import. Agents must be constantly learning and navigating those changes. Effective communication, ongoing learning, and a thorough understanding of area growth and market trends is a requirement in providing ultimate client care.