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Photo by Vitai
After a decade of near-constant expansion, real estate in Los Cabos is catching its breath. The pandemic-era surge, when remote work, lifestyle migration, and speculative enthusiasm converged, igniting an unprecedented rise in demand, has given way to a calmer rhythm. Sales have cooled, price growth has leveled off, and developers are reevaluating what kind of communities the region actually needs.
Nowhere is that transition clearer than in San Jose del Cabo. Often overshadowed by Cabo San Lucas (its faster-moving twin city), San Jose has evolved into a laboratory for a more deliberate model of growth: slower, better planned, and oriented toward long-term livability rather than quick turnover.
Marco Klein, a broker with over twenty-five years of experience in the region, has witnessed these cycles unfold since the 1990s. He believes today’s moment marks a healthy correction rather than a downturn: “Every market needs time to breathe,” he says. In that pause, new patterns emerge of how land is managed, how buyers behave, and how developers adapt.
The question shaping real estate in Los Cabos in 2026 is no longer how fast the region can grow, but how wisely. In that respect, San Jose’s measured approach may offer the clearest glimpse into the future of Los Cabos.
The Three-Speed Market
According to Marco, today’s Los Cabos market operates at three distinct speeds. At the top sits the luxury tier, buoyed by international wealth and limited supply. Ocean-view villas and branded residences continue to trade steadily, their value anchored in scarcity rather than speculation.
Beneath that lies the mid-market, roughly between US$500,000 and $1.5 million, where the slowdown has been most visible. Many of these buyers are U.S. or Canadian professionals seeking a second home or investment property. Over the past year, Marco says, “a lot of them have been holding their hands, waiting to see what happens with interest rates and U.S. policy.” The hesitation is temporary, he argues, but instructive: it exposes how dependent this segment is on sentiment and liquidity abroad.
Finally comes the local upper middle-class market — a quieter but increasingly influential layer of demand. Families and long-term residents earning in pesos are looking for attainable homes, not rentals or quick flips. Their purchasing power may be smaller, yet it represents the foundation of a stable community. A segment of Mexican citizens moving to Los Cabos from the mainland also falls into this market tier.
This segmentation is revealing the market’s underlying structure. Luxury maintains its momentum; the mid-tier recalibrates; the local and national tier gains definition. And in that process, the geography of opportunity is shifting east to San Jose, where coordinated planning and constrained supply favor developers who think beyond the next sales cycle.
Photo by Vitai
A Tale of Two Cities
The contrast between Cabo San Lucas and San Jose del Cabo explains much about how the region is evolving. Both share the same coastline and tourist appeal. Yet, their development pattern and the logic behind them could hardly be more different.
In Cabo San Lucas, growth has radiated outward from the marina into the hillside neighborhood of El Tezal. The land there once belonged to an ejido, or communal agrarian trust. It was gradually privatized and sold to individual developers.
The result was a surge of construction: gated communities, low-rise condominiums, and small apartment complexes competing for the same buyers. For a while, demand justified the pace. However, as inventory increased, so did the strain on infrastructure. Water became inconsistent, access roads congested, and projects began to cannibalize one another.
Across the corridor, San Jose took a slower, more centralized path. Much of its land remained under a single title, managed by a single company that oversaw the former ejido’s transition to private property.
This concentration curbed speculation but made possible something rare in Mexican resort towns: coherent urban planning. Instead of dozens of uncoordinated subdivisions, parcels were released in phases, each with defined zoning, density, and service connections in place.
Marco explains the difference: “In San Jose, you don’t have twenty developers competing on the same street. Each project knows its place in the master plan.” The result is a landscape that grows intentionally rather than by chance. Along Boulevard Forjadores, that design is becoming visible. Clusters of mid-rise condominiums framed by schools, markets, and sports fields.
Photo by Vitai
Purpose-Built Living
The new projects emerging around San Jose del Cabo aren’t chasing speculative returns; they’re responding to a demographic shift. After years of catering mainly to seasonal owners, developers are discovering a growing audience of full-time residents: professionals, families, and retirees who want the infrastructure of a real city rather than the amenities of a resort.
Marco estimates that roughly 7,000 people living in San Jose could afford to buy if the right kind of housing existed: units that balance quality with attainability, designed for permanence. That realization is quietly reshaping how projects are financed, built, and marketed. Developers are scaling down footprints, adding practical amenities like co-working spaces and fitness areas, and keeping HOA costs within reach. The focus has shifted from maximizing absorption to ensuring long-term satisfaction.
A case in point is Vitai, a community represented by Klein Real Estate. Located just off Boulevard Forjadores, it offers mid-market pricing, supported by solid infrastructure, including completed water and power connections before the start of presales. The design incorporates over twenty amenities while maintaining a manageable cost structure, aiming to serve families who plan to live there year-round.
“People want to know they can move in and have everything working,” says Marco. “That’s what makes the difference now.” Vitai is less about chasing appreciation than about building confidence, a signal that Los Cabos’ next growth phase will be measured by reliability as much as by return on investment.
Photo by Vitai
Cycles and Strategy
To understand how professionals like Marco read the current moment, it helps to think in cycles. Real estate in Los Cabos, he says, has always moved in waves, each surge of enthusiasm followed by a pause that tests conviction. The pandemic boom was no exception: “People get nervous when the market slows, but that’s when the best opportunities appear.”
The pattern is familiar to long-term investors: when demand cools, prices stabilize, and financing becomes more flexible. Those who enter then, he argues, build equity that lasts through the next expansion. “Markets are like a heartbeat. You can’t have growth without the resting phases in between.”
That cyclical perspective helps explain why Cabo continues to attract experienced investors, even during quieter periods. The fundamentals remain solid: a dollar-based economy that protects value, strong rental yields driven by tourism, and a relative sense of safety rare among Mexico’s coastal regions. Add to that the expansion of direct flights and digital infrastructure, and the slowdown looks less like contraction than consolidation.
The Local Advantage
Another quiet transformation is underway beneath the market headlines: domestic buyers are emerging as a stabilizing force in Los Cabos. While foreign interest, particularly from the U.S., still drives the luxury tier, an increasing number of Mexican families are choosing to live or invest here full-time. Some are relocating for a better quality of life, while others are purchasing vacation properties with an eye toward eventual retirement.
This internal migration has real consequences. It diversifies the market, softens dependence on U.S. cycles, and deepens the region’s social fabric. “Cabo used to rely on a few big feeder markets. Now we’re seeing people from across Mexico who want safety, good schools, and a manageable cost of living.”
At the same time, Canadian buyers are quietly gaining ground, encouraged by favorable exchange rates and a perception of stability. The mix creates a healthier ecosystem: when one demand stream slows, another picks up the slack.
These overlapping buyer groups reinforce San Jose’s evolution from a tourist town into a functioning city. The focus is no longer on speculative margins, but on livability — the kind of steady demand that sustains schools, grocery stores, and year-round communities. For Marco, that’s the real signal of maturity: “When people start building lives here, not just portfolios.”
Photo by Vitai
Looking Ahead: From Speculation to Substance
The transition unfolding in San Jose del Cabo suggests more than a temporary slowdown, marking a shift in mindset. The city’s evolution reflects a broader truth about real estate in Los Cabos: growth is no longer measured solely by square meters sold or cranes on the skyline, but by coherence, infrastructure, and quality of life.
Developers are learning that credibility comes from delivery. Buyers are learning that value depends as much on urban logic as on luxury finishes. And brokers like Marco Klein are learning to translate decades of experience into guidance that strikes a balance between optimism and realism.