Stand on the balcony of almost any two-bedroom condo in El Tezal this month and you'll see the same view: three or four newer towers within a few blocks, most of them advertising the same layout, the same rooftop pool, the same rental-ready pitch to the same buyer. Some of those buildings delivered their units in 2024. Some are delivering now. A few are still finishing.
That view is the part of the Cabo San Lucas market that headlines miss. The broader numbers coming out of the municipality this year sound healthy: sales volume under contract climbed to $391 million in the first quarter of 2026, up 39% over the previous quarter, and the $2 million to $5 million luxury tier posted double-digit growth in both units and dollars. Read only those figures and you'd assume Cabo is simply busy. But the same first-quarter report that produced those numbers also recorded an 8.6% quarterly decline in median condo prices, driven almost entirely by one specific product: the two-bedroom resort condo, the exact unit sitting on that balcony.
The View From the Balcony Doesn't Match the Report
Two-bedroom condos make up the bulk of the 1,395 condos currently listed across Cabo San Lucas, and they are the segment absorbing nearly all the price pressure. Houses in the same quarter told a different story. Days on market for houses fell to 190, down from 218 the quarter before, while condo days on market ticked up slightly to 197. Sellers of houses also kept more of their asking price, with the sale-to-list ratio improving to 93.2%, while condo sellers watched that same ratio soften from 94.3% to 92.3%.
None of that reads like a market in retreat. It reads like a market where one product type got built in a specific quantity for a specific reason, and that quantity is now larger than the pool of buyers who want it.
The Math From 2021
The reason traces back five years, not five months. In 2021, as pandemic travel restrictions eased and remote buyers rushed toward Mexican coastal property, Cabo San Lucas sold 737 two-bedroom condos in that single year. Developers read that number as durable demand and built to match it, launching a wave of investor-marketed two-bedroom projects across El Tezal, Sunset Beach, and pockets of the Tourist Corridor.
Those projects are the ones delivering now. By the end of 2025, two-bedroom condo inventory had swelled to 732 active units, while annual sales of that same product had fallen to just 330, the lowest volume in five years. Developers and their original buyers responded the only way a market like this can: with price cuts. The market recorded 1,640 price reductions across 2025, up from 1,193 the year before, and the pattern has continued into 2026.
This is a supply story, not a demand collapse. Somewhere between 2021 and today, the pipeline of two-bedroom condos built to satisfy one boom year is arriving into a market where that specific type of buyer has moved on to other product, other cities, or other timing.
Q1 2026 At a Glance: Two Different Markets Under One Roof
| Metric (Q1 2026) | Houses | Condos |
|---|---|---|
| Sales volume vs. Q4 2025 | +26% | +29% |
| Days on market | 190 (down from 218) | 197 (up slightly) |
| Sale-to-list price ratio | 93.2% | 92.3% (down from 94.3%) |
| Median price trend | Stable | Down 8.6% for the quarter |
The volume numbers on both sides look strong. The price and negotiation numbers point in opposite directions. That gap between how much is selling and what it's selling for is the whole story in one table.
When Your Own Building Becomes the Competition
For buyers who purchased two-bedroom units in presale during the 2021-2022 rush, the current market creates a specific and uncomfortable friction: their own building is now their competition. As pre-construction units from that era finish and hit the resale market, original buyers who bought at 2021 prices are listing alongside developers still selling remaining inventory in the same tower, often at similar or lower prices to move product. That dynamic is what pushes serious sellers toward what the local market has started calling fire-sale pricing, where an owner who needs liquidity underprices a unit simply to get ahead of the next wave of deliveries.
Pre-construction risk in Cabo isn't hypothetical. A number of projects announced during the boom years never reached their original scope. Puerta Cabos Village, on the edge of Cabo San Lucas near Medano Beach, was originally planned as eight condo buildings with a spa and resort component. Construction stopped after two buildings were finished, and the promised amenities never materialized, leaving early owners without the project they bought into. A January 2026 update on the local market noted several other developments in El Tezal that have gone quiet, including a project called Onturia, near the Riu Sante Fe, and one called Damiana, which the same update said was rumored to have secured new funding that could eventually restart it. Rumors aren't a resolution. Until a project is delivering units, it belongs in the risk column, not the discount column.
Attorneys who work on Baja California Sur transactions have made a similar point publicly: buyers are increasingly pricing in the legal risk of pre-construction, including title defects, permit delays, and developer insolvency, and capital is shifting toward projects with clearer legal footing rather than the highest presale discount.
The Cabo San Lucas That Isn't Softening
The two-bedroom condo glut is real, but it isn't the whole city. The same market that produced an 8.6% quarterly decline in generic condo prices also produced four sales over $10 million in the first quarter, including a single $19.9 million transaction. In the $2 million to $5 million tier, condos actually showed seller's-market behavior on one specific measure: a sales-to-new-listing ratio of 75%, meaning new listings are being absorbed almost as fast as they arrive, even though months of inventory in that tier runs around 25 months for condos. Absorption and inventory length aren't contradictory here. They describe a segment where enough qualified buyers keep showing up that replenishment stays healthy, even with a long runway of listings on hand.
A separate market report covering the luxury segment through the first half of 2026 found something that reinforces the same pattern from another angle: reported sales volume was down 25.2% and total transaction count down 17.6% year over year, yet the average condo sale price rose 20.1% over the same period. Fewer deals, higher average prices, is the fingerprint of a market getting more selective rather than weaker. That report tracks activity at branded and master-planned communities that sit largely outside the standard MLS feed, including The Cove Club, Chileno Bay, El Dorado, Montage, Maravilla, and Costa Palmas. Buyers are still transacting there. What they've stopped doing is paying up for undifferentiated inventory that looks like the unit next door. Separately, brokers describe the rare above-asking sales still happening in Cabo San Lucas as concentrated in a similar pattern: scarce ocean-view product in areas like Pedregal, Quivira, and Sunset Beach, not the generic two-bedroom stock.
That distinction matters more in San José del Cabo, where much of the growth over the past several years has followed centralized planning rather than the more scattered, investor-driven development pattern in Cabo San Lucas. Corridors like Boulevard Forjadores have grown around schools, markets, and community infrastructure, and condo entry prices there run lower, generally $300,000 to $600,000, compared to $400,000 to $800,000 in Cabo San Lucas. For a buyer priced out of the saturated two-bedroom corridor but still committed to the region, that's a structurally different bet, not just a cheaper version of the same one.
What This Actually Means If You're Buying This Fall
If you're looking at a two-bedroom condo in Cabo San Lucas right now, the negotiating leverage is real. Nineteen months of overall inventory and a softening sale-to-list ratio mean sellers, especially those competing against their own building's newer deliveries, have reason to talk. But that leverage exists because the product is oversupplied, not because the location has lost appeal. Ask specifically how many comparable units are for sale in the same building or block before you anchor to a list price.
If you're weighing pre-construction, the math has changed since 2021. A discount off a future delivery date is only worth taking if the developer's track record, financing, and permitting are documented, not assumed. The stalled projects on record in El Tezal are a reminder of what happens when that groundwork isn't there.
And if what you actually want is appreciation rather than a discount, the data points toward houses, gated-community product, and branded or master-planned developments over generic resort condos, at least for as long as the 2021 delivery pipeline keeps working through the system.
FAQ
Is Cabo San Lucas in a buyer's market right now? For two-bedroom condos, yes, clearly, with roughly 19 to 25 months of inventory depending on the tier and softening sale-to-list ratios. For houses and branded luxury product, the data shows tighter absorption and steadier pricing, which is a different market condition inside the same municipality.
Should I still consider a two-bedroom condo in Cabo San Lucas? It can still make sense, especially at a discount, but treat it as a negotiation-heavy purchase. Confirm how much competing inventory exists in the same building or corridor before you commit, since that oversupply is exactly what's compressing prices.
Are pre-construction deals worth the risk in 2026? Only with real diligence on the developer. Several 2021-era projects in El Tezal stalled after partial completion. A presale discount only pencils out if the project's financing and permitting hold up, not just because the price looks attractive today.
Does this oversupply affect land or single-family homes the same way? No. The data specifically isolates the two-bedroom condo segment as the source of price softness. Houses have seen improving days on market and stronger price retention over the same period.
If you're weighing a Cabo San Lucas purchase against other coastal markets, or trying to figure out which segment of this specific market fits your goals, Riviera Maya Homes can walk through the current inventory with you property type by property type. Schedule a personalized consultation before you make an offer on anything in this market.
