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Real estate is impossible to ignore in Baja. As you walk through towns like San Jose or Cabo San Lucas, as well as the more remote communities in the East Cape, you will encounter signs advertising pre-construction condos, gated communities, and ocean-view villas. Numerous real estate offices display their listings in their windows. This leads both visitors and locals to wonder: How is the market doing?
The answer is more nuanced than most brochures or headlines suggest. Post-COVID buying trends have shifted. Prices are up, incentives are changing, and the once-obvious advantages of buying pre-construction aren’t as automatic as they used to be.
To make sense of it all, we turned to broker Fletcher Wheaton, someone who’s watching the market evolve day by day. His insights cut through the noise and offer a grounded take on what’s still worth considering, what to avoid, and how savvy buyers are adapting in 2025.
Why Buying Pre-Construction in Cabo Isn’t a Sure Thing Anymore
The Profit Margin on New Builds Has Tightened
Not long ago, buying pre-construction in Los Cabos was a no-brainer. You put down your deposit, waited for delivery, and watched your property value climb 20 to 30 percent before you even turned the key. For a period, especially in 2020 and 2021, that strategy proved effective for many.
The gap between what you paid during construction and what the property was worth at delivery, known in the industry as “the delta,” made the risk seem minimal and the returns almost automatic.
That delta has largely disappeared.
“The price of land has gone up. Labor and materials, too,” says Fletcher. “What used to be a USD 300,000 pre-construction condo that was worth USD 400,000 at delivery is now priced closer to USD 400,000 from the start.”
Risk Is Up, Reward Is Down
For buyers, that changes the entire risk-reward equation. If the upside is no longer built in, why take on the risk of buying something unfinished?
That question is becoming more common. A finished unit has a clear title, furniture, utilities in place, and no construction delays. A pre-con unit now comes with much less financial incentive and the same old headaches.
By no means is pre-construction dead. But the idea that all pre-con offers built-in gains is outdated. You must consider each project individually. The old overarching assumptions no longer apply.
What’s replacing the playbook is something less simple, but more durable: buyers asking sharper questions, scrutinizing location, timing, and developer reputation, and negotiating based on today’s real numbers, not yesterday’s hype.
How Buyers Are Negotiating Better Real Estate Deals in Cabo
Developers Are Flexible. But Not on the MLS
The slowdown in pre-construction upside hasn’t killed buyer interest. But it has made the smart money more strategic. For instance, Fletcher is still writing offers on pre-con deals. It’s the way he approaches them that has changed.
“Before, if you didn’t grab a unit, someone else would by the weekend, and the price would go up. Now? I’ve been dragging out a negotiation for a week to see if they’ll come back with pressure. They haven’t.”
The urgency is gone. And with it, the balance of power has shifted.
However, don’t expect that shift to appear on the MLS. “The list price might stay fixed, but developers are negotiating behind the scenes. They’re willing to offer upgrades, cover HOA fees, maybe throw in furniture.” These concessions help protect previous buyers from seeing prices drop publicly, while still giving new buyers meaningful value. Depending on the project and timing, these hidden benefits can add up to a seven-to-nine-percent swing in total value, without ever changing the advertised price.
Strategy Matters More than Speed
Still, not all developers are flexible. Some are holding the line, requiring bigger down payments or refusing discounts entirely. “Every project is different. You’ve got to know who’s behind it and what they’re working with. Some need to move units. Some don’t.”
For buyers, the takeaway is simple: this is a more negotiable market, but only if you know what’s negotiable. It takes experience to see where the wiggle room is and what kind of deal structure makes sense. The best brokers are spotting pressure points in a project’s timeline, pricing, and motivations. The deals still exist. But they live in the details.
How to Spot Red Flags in New Real Estate Developments in Cabo
Oversupply and Ego-driven Projects Are a Growing Risk
One of the easiest mistakes a buyer can make in Baja today is assuming that all pre-construction opportunities are essentially the same.
“You’ve got developers launching towers in areas that already have over two years’ worth of inventory on the market,” Fletcher says. “It just doesn’t make sense.”
In Tezal, for instance, one of the areas of Cabo San Lucas that experienced the biggest post-pandemic boom, months of inventory for condos and homes have crept well past 24, yet new projects continue to emerge.
Some of this may be due to ego. Out-of-town developers arrive with a history of success elsewhere, such as Tulum, Cancun, or Playa del Carmen, and assume the same formula will work in Cabo. But Cabo isn’t a blank canvas. It has an informed buyer base, a visible inventory pipeline, and infrastructure challenges that are not apparent in a glossy rendering.
Not Every Launch Means Long-term Success
“We’ve turned down projects that didn’t make sense. One we rejected has been sitting on the MLS for over 130 days without a sale. Meanwhile, the developers are pricing as if there’s no competition, and three lots down the road, another project is getting ready to launch.”
Buyers don’t need to know every metric. But they do need to know that not all projects have the same fundamentals. You need to examine supply and demand on a micro level. What’s happening in this part of town, for this type of product, right now?
Should You Buy in La Paz, Loreto, or East Cape Instead of Cabo?
Alternative Markets Are Rising. But They Are Not Risk-free
With prices rising in Cabo and pre-construction margins shrinking, more buyers are exploring alternative markets, such as La Paz, Loreto, and the East Cape. These places promise lower entry points and the feeling of getting in early. However, what buyers are theoretically chasing often differs from what they actually want in practice.
“There’s this idea that La Paz or Loreto is the next Cabo,” Fletcher says. “And in some ways, they are. But when people get into the details, such as flights, healthcare, infrastructure, or the rental market, they realize Cabo offers things those towns can’t.”
Know What You’re Giving Up When You Go Off the Grid
In some regions of the East Cape, for instance, inventory growth has been explosive, but it has been off a very low base. And while demand is rising, services are limited, and the long-term liquidity of the market is still untested.
Developers often aim high, building multi-million-dollar homes in areas with fragile infrastructure and limited accessibility. “Everyone wants to do the next Costa Palmas, an ultra high-end residential community in La Ribera. But sometimes what the market really needs is something more like La Ventana: affordable, grounded, and community-driven.”
For buyers, the takeaway isn’t to avoid these regions, but to understand the trade-offs. A lower price point may come with fundamental limitations, including fewer direct flights, longer construction times, and a more challenging resale.
“You might say you want off-grid, but then you’re driving an hour for groceries or medical care. You have to be honest about what you’re really looking for.”
Understanding Inventory and Timing in the Cabo Real Estate Market
Why High Inventory Isn’t Necessarily Bad
For many buyers, rising inventory triggers alarm bells. But that’s not always the proper reaction. High inventory isn’t inherently bad. What’s really problematic is having no inventory or only poor-quality inventory. That’s when markets get distorted.
More options can be a good thing, especially in a region like Baja, where delivery timelines can be lengthy and the finished product is still scarce. In the U.S., tight supply has driven prices to record highs and kept would-be sellers from moving. In Cabo, the buildup of homes and condos offers breathing room.
Use Judgment, Not Headlines, to Read the Market
The critical question isn’t how much inventory exists, but what kind of inventory it is. Is it priced appropriately? Is it buildable? Is it backed by a serious developer?
Timing also matters, often more than most people think. You can have the right project at the wrong time, and it won’t sell. Some developers are learning this the hard way, launching into markets that aren’t ready. Buyers, too, need to calibrate: a project that felt too risky last year might make sense today, and vice versa.
Ultimately, the difference-maker is sound judgment. Who’s building it? Why are they building it now? What’s happening in this micro-market, at the neighborhood level, that doesn’t show up in the headlines?
A good agent can help answer those questions. A curious buyer can ask them. And somewhere in between is where the smart deals get made.