1,395 Condos and Counting: Inside the Los Cabos Inventory Surplus of 2026

Los Cabos has 1,395 condos sitting on the market as of Q3 2026. That is 19 months of inventory. Median condo prices are down 8.6% quarter over quarter, and sellers are accepting 5-8% below ask.

The Numbers Nobody Is Talking About

Let me be direct: this is the most buyer-friendly condo market in Los Cabos since the COVID pause of mid-2020. I have watched this market daily for years, and the shift from late 2025 to now has been dramatic.

Here is the raw data. As of Q3 2026, the AMPI Los Cabos MLS shows approximately 1,395 condos actively listed for sale. At the current absorption rate — roughly 73 units per month across all price points — that is 19 months of standing inventory. A balanced market sits at 6 months. A buyer's market starts at 7. We are at 19.

Q1 2026 total sales volume came in at $391 million. That sounds healthy until you realize it was up 39% from a weak Q4 2025 but still the lowest first quarter since 2020 according to data compiled by Ronival. Transaction velocity has slowed even as listing count has surged. Classic oversupply math.

Where the Surplus Lives

Not every segment is drowning in inventory. The surplus has a clear profile, and understanding it is the difference between getting a deal and buying at the wrong price.

The Oversupplied Segments

Two-bedroom condos are ground zero. They represent roughly 55% of active inventory. From 2021 to 2023, developers delivered hundreds of 2BR units targeting the vacation rental market — the Airbnb play that every investor was chasing post-COVID. The problem: supply outran demand. Properties in El Tezal, parts of Fonatur San Jose, and the outer edges of Marina Cabo are sitting longest.

The median condo price fell 8.6% quarter over quarter. That number includes all segments, but the decline is steepest in the $400,000-$800,000 range — precisely where the 2BR glut lives. Sellers who bought pre-construction in 2022 at peak pricing and took delivery in 2024-2025 are now underwater or at break-even, and they know it.

The Tight Segments

Luxury single-family homes remain scarce. There are not enough $3M+ villas in gated golf communities to satisfy demand. Palmilla, Querencia, and Diamante each have fewer than a dozen single-family listings at any given time. Prices in these communities have not budged — if anything, they are still ticking up 3-5% annually.

Branded residences — Four Seasons, Montage, Ritz-Carlton Reserve, Nobu — are in their own orbit. Brand premiums remain intact, and resale values continue to appreciate. The institutional demand for branded product does not follow the same cycle as a spec-built condo in a no-name development. For context, read our branded residences comparison.

What This Means for Your Negotiation

I have personally seen offers close at discounts I have not witnessed since 2020. Here is what buyers are getting right now:

The $400K-$800K tier is the sweet spot for negotiation. Properties listed 120+ days are where sellers have the most motivation. Their carrying costs are mounting — HOA fees, property management, fideicomiso maintenance, predial taxes — and every month unsold eats into whatever equity they thought they had.

Specific Tactics That Are Working

Here is what I am telling buyers right now:

• Pull comps from the building, not the area. What unit 4B sold for three months ago is more relevant than what a different building's penthouse closed at across town.
• Ask for the seller's purchase price. If they bought pre-construction in 2022, they likely paid 15-20% more per square meter than current market rates. That knowledge gives you leverage.
• Offer 10-12% below ask on properties listed 120+ days. You will get countered, but you will land at 6-8% below — which is exactly where deals are closing.
• Request furniture and appliances included. Sellers who need to close will throw in furnishings rather than reduce the headline price. Same economics, less ego.
• Close fast. A 30-day close offer beats a 60-day offer at the same price. Sellers want certainty.

Communities to Target Right Now

Not all inventory is created equal. Here is where I am steering buyers depending on budget and goals:

Value Plays ($300K-$600K)

El Tezal has the deepest discounts in the Cabo San Lucas side. These are functional condos — not resort luxury — but the locations are convenient, the HOA fees are reasonable, and the rental math works at discounted purchase prices. Similar story in parts of Fonatur San Jose del Cabo, where newer buildings have more inventory than demand.

Mid-Range Sweet Spot ($600K-$1.2M)

Cabo del Sol has condos that were $850K-$1M listings now fielding offers in the $750K-$850K range. The community fundamentals are strong — Nicklaus courses, beach club, Park Hyatt coming — but individual sellers need liquidity. Marina Cabo San Lucas has similar dynamics in the waterfront condo segment.

Luxury Repositioning ($1.2M+)

Palmilla condos — as opposed to villas — are seeing some softening. A 3BR in Palmilla Cove that would have listed at $1.5M in early 2025 might close at $1.3M-$1.35M today. The community itself is not declining; there is just more inventory than usual, and sellers who stretched on price are adjusting. Read our full Palmilla guide for context.

What Caused This Surplus

Three forces converged:

1. Pre-construction delivery wave. Hundreds of units sold off-plan in 2021-2022 at peak pricing have now delivered. Many investors who planned to flip on delivery discovered that the market moved against them. Now they are listing, adding to supply.
2. US interest rate stickiness. The Federal Reserve has kept rates higher for longer than most buyers expected. Since roughly 80% of Los Cabos purchases are cash, this does not directly impact mortgage availability — but it does affect the opportunity cost of parking $600K in a condo versus a 5% Treasury.
3. Canadian buyer pullback. The Canadian dollar's weakness against the USD in 2025-2026 has priced out a meaningful segment of the Canadian snowbird market that historically absorbed Cabo condos in the $300K-$600K range. For more on Canadian buyer dynamics, see our Canadian buyer's guide.

What to Avoid in This Market

A buyer's market does not mean every deal is a good deal. Here is what I am telling clients to skip:

• Pre-construction from unknown developers. In a surplus market, the developers who survive are the ones with track records and capital reserves. A newcomer offering 30% below comparable finished product is not giving you a deal — they are giving you risk. Read our pre-construction vs. resale breakdown.
• Buildings with sub-40% occupancy. If 60% of the units are dark, the HOA is collecting from a thin base. Maintenance defers, common areas deteriorate, and your resale value decays. Ask for the HOA financials before making an offer.
• "Guaranteed rental income" packages. Some developers offer 5-8% guaranteed returns for 2-3 years to move inventory. After the guarantee expires, you are on your own in an oversupplied rental market. The guarantee is baked into the purchase price — you are paying for it upfront.
• Properties with title issues. A desperate seller may rush the closing process. Do not skip the title search. The Public Registry search and your notario's due diligence are even more important when prices are under pressure.

The Branded Residences Exception

I keep separating branded residences from the condo conversation because they genuinely operate in a different market. Montage, Zadun Ritz-Carlton Reserve, Nobu, and the upcoming Park Hyatt at Cabo del Sol are not competing with generic condo supply. Their buyer pool is global, brand-loyal, and relatively price-insensitive.

Branded residences in Los Cabos are appreciating 3-5% annually even while the broader condo market corrects. The brand acts as a floor on value — a Montage residence does not compete with a no-name tower for the same buyer. If you are in the $2M+ range and want downside protection, branded product is the play. Our branded residences guide breaks down each option.

Where This Goes From Here

I expect the condo surplus to persist through Q1 2027. More pre-construction deliveries are scheduled for late 2026 and early 2027, which will add inventory before the market absorbs the current backlog. Median condo prices have likely not bottomed yet — another 3-5% decline through winter is plausible before seasonal demand picks up in November.

That said, the fundamentals that drive Cabo's long-term market remain intact: expanding direct flights, infrastructure investment, limited coastal land supply, and growing North American demand for resort-residential product. This is a cyclical correction in the condo segment, not a structural decline in the market.

San Jose Side vs. Cabo Side: Where the Deals Differ

The surplus is not distributed evenly between the two towns, and understanding the geography helps you target your search.

On the Cabo San Lucas side, the inventory concentration is heaviest in El Tezal and the outer marina areas. These are the buildings that went up fastest during the 2021-2023 boom — smaller developers, smaller lots, maximum unit count. The product is functional but generic. Discounts are deepest here because the buildings lack brand differentiation. If one 2BR condo in a no-name El Tezal tower is priced at $425K, the identical unit two floors down is listed at $410K, and the unit in the next building over is at $399K. Nobody has pricing power because nobody has a brand.

On the San Jose del Cabo side, the surplus is concentrated in Fonatur and the newer buildings along the boulevard. San Jose inventory tends to be slightly higher-quality — better architecture, more attention to common areas — but the same oversupply dynamics apply. Newer buildings that delivered in 2024-2025 are competing with each other for a finite buyer pool. The difference: San Jose's arts district, restaurant scene, and colonial charm give it lifestyle appeal that supports prices slightly better than generic Cabo-side inventory.

The Corridor — Palmilla, Chileno Bay, Cabo del Sol, Twin Dolphin — has the tightest inventory. These are established resort communities with waiting lists for the best product. If you are looking for a deal in the Corridor, focus on the rare motivated seller or the unit that has been sitting 120+ days, not the market broadly. Our resale market report tracks what is actually moving.

Closing Strategy in a Buyer's Market

A buyer's market changes the closing dynamic in ways that benefit you beyond the headline price. Here is what I am advising clients on the tactical side:

• Negotiate closing cost splits. In a seller's market, buyers pay all closing costs (4-8% of purchase price). In this market, sellers are splitting costs or covering notario fees to get deals done. Ask for it.
• Request extended due diligence periods. Sellers who need to close will give you 15-20 days for inspections and due diligence instead of the standard 10. Use the extra time to get a thorough property inspection.
• Consider multiple offers. If you are targeting the $400K-$800K range, you can afford to make offers on 2-3 properties simultaneously. The market depth means you will not run out of options. Be ethical — do not string sellers along — but use the leverage of having alternatives.
• Lock in your fideicomiso bank early. Even in a surplus, the fideicomiso setup takes time. Start the bank process while you negotiate so you can close fast when terms are agreed.

The buyers who move in Q3 and Q4 2026 will look very smart in 2028. That is how cycles work — the best deals are available when the headlines feel uncomfortable.