The Los Cabos real estate market entered Q3 2025 with stronger fundamental metrics than at any point in the market's history. Sales volume, pricing, inventory levels, and buyer composition all point in the same direction: this is a structurally supply-constrained market with demand drivers that are not temporary cyclical factors. This report documents the Q3 data and the forces producing it.

Headline Metrics: Q3 2025

The top-line numbers tell a consistent story of sustained growth across the market:

  • Sales volume: Up 18% year-over-year, the fourth consecutive quarter of double-digit volume growth
  • Median price per sqft (CSL corridor): $485, up from $412 in Q3 2024 — an 18% annual gain
  • Available inventory: 4.2 months of supply (seller's market; balanced market = 6 months)
  • Luxury segment appreciation ($2M+): 22% year-over-year, the strongest performance tier in the market
  • Cash buyer share: 78% of all transactions
  • International buyer share: 61% of transactions, US buyers at 47% of total
  • Days on market (luxury segment): Average 47 days, down from 68 days in Q3 2024
Key Insight: The 4.2-month inventory figure is the most important single metric in this report. A market with less than six months of supply does not clear excess inventory at current pricing — it absorbs new listings faster than they appear. In the ultra-luxury custom segment above $3M, available inventory is effectively zero: there are more qualified buyers actively looking than there are properties meeting their criteria. This is the structural condition that produces 20%+ annual appreciation in the face of rising prices.

Four Demand Drivers Sustaining the Market

The Los Cabos appreciation run is now in its fourth year. Understanding why it has not corrected requires understanding the four structural demand drivers that distinguish this market from cyclical secondary markets.

1. Record flight connectivity. Los Cabos International Airport (SJD) now operates nonstop service to more than 45 US destinations, including new routes from secondary markets (Nashville, Austin, Denver, Raleigh-Durham) that have dramatically expanded the buyer funnel. A buyer in Nashville who previously had to connect through Dallas can now fly direct to Los Cabos in 3.5 hours. That accessibility change is permanent and continues to grow.

2. The US wealth effect. US equity markets have generated substantial wealth gains since early 2023. The demographic most likely to buy a $2M+ second home in Mexico — business owners, executives, and high-income professionals aged 45–65 — has seen their net worth increase materially over this period. This wealth effect translates with an 18–24 month lag into discretionary real estate acquisitions. We are in the middle of that wave, not at its end.

3. Peso depreciation advantage. The Mexican peso has weakened approximately 20% against the USD over the past four years. For dollar-denominated buyers, this effectively means a Cabo property that would have cost $3M in 2021 terms is accessible today for the equivalent of $2.4M in purchasing power — a structural discount baked into the exchange rate. This FX advantage is not permanent, but it is real for the current buying window.

4. Remote work permanence. The pandemic-era shift to remote and hybrid work has permanently altered the calculus for second-home ownership. A buyer who is physically at their California home 3 days per week and traveling the other 4 has a fundamentally different cost-benefit analysis for a Cabo property than a buyer who was anchored to an office 5 days per week. This structural change in work patterns has expanded the effective buyer pool by an estimated 35–40% compared to pre-2020.

Luxury Segment Deep Dive: $2M and Above

The luxury segment — properties priced above $2M — is the strongest-performing tier in the market. The 22% YoY appreciation figure understates the pricing dynamic at the very top of the market, where the scarcest assets (custom builds on premium elevated lots with full ocean panoramas) are transacting at prices that would have seemed aggressive 18 months ago and now look prescient.

Key dynamics in the luxury segment:

  • Pre-construction reservations for new custom projects are now routinely converting before the project breaks ground — buyers are willing to commit on design renderings and developer reputation rather than waiting for a finished property
  • Resale premiums on properties with documented rental income history are running 12–18% above comparable properties without rental track records
  • Properties with third-party property management in place (demonstrating institutional-grade operations) are commanding the highest per-sqft prices at resale

Market Outlook: Looking Into Q4 2025 and Beyond

The indicators entering Q4 2025 are uniformly positive. The flight schedule expansion continues; several new direct routes from Midwest markets (Chicago O'Hare added a second daily flight, Minneapolis nonstop launching November 2025) will extend the already-wide buyer funnel. Inventory is unlikely to normalize quickly — the permitting and construction timeline for new luxury supply is 24–36 months minimum, and the pipeline of entitled lots entering the market is insufficient to close the supply gap at current demand run rates.

"The buyers who moved fastest in 2022 and 2023 are the ones who look most prescient today. The fundamental drivers haven't changed — they've strengthened. The question is not whether to act, it's whether to act now or in two years at materially higher prices."

For buyers evaluating how Los Cabos compares to other luxury markets in Mexico, our analysis of Cabo San Lucas vs Puerto Vallarta provides a side-by-side comparison of the two leading markets. To understand the investment return mechanics in detail, read our piece on ocean view vs beachfront investment comparison. Ready to discuss current availability? Contact our team directly.