We were discussing the cost of living, and we will go back to it. The last post was the cost of groceries in the store, next we’re going to talk some strategies to cut that pretty dramatically. But in the meantime I got sucked into a Facebook discussion about whether to rent or buy if you’re moving to Cabo. And I think what I have to say may be important to someone out there.
First, obviously I *AM* biased. My work is to sell houses, not rent them. So of course I’d rather see someone buy rather than rent. And I was pretty much completely out-voted on that discussion with most people suggesting that it would be better to rent for a year or two before deciding to buy. What really got to me was a whole lot of folks who are not in the business advising the person who started the discussion that there’s no hurry: there are plenty of homes on the market. Well, I have access to a state-wide MLS and I beg to differ.
Most people who are re-locating to Cabo are looking for what I call ‘real people houses’. They don’t have an unlimited budget but still want a nice home. I don’t know if it’s this blog or just a sea change in the market, but I’m working more and more with this demographic: people who are moving to Cabo as full time residents. Some are retiring and others coming down to start a business. And their needs are quite different than those of the high end vacation home buyer. Probably the most common search for these full time buyers is: Nice home in a nice neighborhood, located on the corridor near Cabo San Lucas, under $300,000 USD, with an ocean view. Many of them would also like seller financing. So what’s available?
About two minutes ago I ran a search on the MLS. And here are the results:
Single family homes listed for sale: 778.
On the Cabo side of the Corridor: 178
Under $300,000 USD: 90
With an ocean view (yes, we can search on that): 25
With seller financing: ONE.
So my point is that yes, there are too many properties on the market in Los Cabos. But in certain segments (read that real people homes) the inventory is getting very picked over. If you wait too long you might not have many choices. In fact, I re-ran the same search but changed the maximum price to $200,000. There were zero results. And as with everything else, supply and demand are going to determine price. I don’t think it will be too long before prices in this category are going to start creeping upward. So you might want to re-think the rent first option. By staying out of what is the best buyer’s market in Cabo history you may find that when you are ready to buy you are either priced out of the market, or will need to settle for less than you wanted. But what if you buy now and then decide to move back to the US? Well, it is still a buyer’s market but you’ll be selling in the hottest segment. While no one can predict the future, based on current trends you should be able to sell for at least what you paid for the house. I also just ran the closing costs for establishing a new trust on a $300,000 home: $14,480. I don’t do rentals but it seems to me you’d be paying more than that for one year’s rent. So if you’re thinking of coming down here to paradise, and you fit this profile, I’d suggest buying NOW. Not a sales pitch, just some friendly advice.
Carol Billups is Broker/Owner of Cabo Realty Pros. She has enjoyed working with both buyers and sellers for over twelve years and still thinks hers is the best job on earth. She is also the real estate columnist for Los Cabos Magazine. You can read more of her articles on the website blog http://www.caborealtypros.com. You can reach her from the U.S. or Canada at 1-760-481-7694, or in Cabo at 044-624-147-7541. You can listen to our 24/7 broadcast on http://www.livecabo.net for a mix of happy music, weather reports and local information.
© 2014 Carol S. Billups