I’m usually blogging about life in Cabo and all the questions people have when they’re thinking of moving to Cabo San Lucas, or anywhere in Mexico. But once in a while I can’t help myself and have to write about real estate trends. This would be one of those times.
When I first moved here and got involved with selling real estate I was aghast that there simply weren’t any statistics. I went to the University of Chicago where EVERYTHING can be reduced to an equation, so I was truly having trouble with this. So, I began taking notes at our monthly MLS meetings where agents stand up and announce new listings, accepted offers, and closings. As I saw it, if the closings outnumbered the new listings the market was demand-driven, what you would call a seller’s market. And, when new listings are greater than closed deals the market is supply-driven, what is called a buyer’s market. Over the years this proved to be a very reliable predictor: when graphed you could clearly see the trends in the market. About three years ago the MLS association merged with the local branch of the national association and we got a new operating system that feeds me that information daily when I sign into the system. What I’m seeing has me truly excited: I’m thinking I’m seeing the recovery of our real estate market.
Since the economic down-turn in the US I’ve seen a steady build-up of inventory. Every morning we’d see tons of new listings pouring onto the system with very, very few closings or pended property (meaning that an offer was accepted). Truthfully, it was depressing, as were the increasingly frequent price reductions. But in the past few months I’ve noticed that changing. Slowly moving, but changing. There are fewer new listings and more pended and closed. And I began paying attention to more than just the numbers, as they don’t tell the whole story.
For reasons unfathomable to me the powers that be decided our local chapter should include chapters in other parts of the state on our Multiple Listing Service. As a result, our MLS system covers the entire state of Baja California Sur. Which I am sure is good for political reasons but messes up working with the system. Notwithstanding the inevitable effect of my client who wants to live in Cabo falling in love with a house that’s 10 hours’ drive north because they don’t understand the geographical coding, it blurs the statistics. After all, is the market in Loreto truly the same as the market in Cabo? I don’t believe so. Even La Paz, which is only three hours from Cabo has a completely different market than ours. What I am forecasting is that their markets are still depressed but locally the recovery has started.
Take this morning for example. When I signed in there were 6 new listings. Yet, all of them were in La Paz or the far East Cape. Not a single new listing in the Los Cabos area. Although there were no closings reported there were three properties whose status was changed to pending, all of them in Los Cabos. So the local inventory was reduced by three units in the past 24 hours. Perhaps a drop in the bucket, but it’s still a drop. I’ve seen a number of such days in the past month or so, after months and months of inventory building.
I’ve just spent two hours I don’t have to spare trying to do what Tech Support says is impossible… I guess they’re right. But! Ingenuity being an asset when you live in Cabo I managed to take a photo of my computer daily dashboard display showing total inventory for the past year. You’ll see that it is dropping. Now what you can’t see are the absolute numbers. Sellers— don’t get excited. There are still several YEARS of inventory out there and the competition is fierce. Your property has to be priced right and in beautiful condition; buyers still have way too much to choose from. And from what I can see they’re scooping up the real bargains first. But progress is progress: Cabo is coming back!
Quick note: if you’re reading this on our company blog scroll one back. I delayed posting this yesterday because I didn’t want to cover up those photos. If not, it’s enough to note that today’s hot sheet was the same: one new listing in La Paz, and one sale in Los Cabos. Trending… definitely trending.
Carol Billups is Broker/Owner of Cabo Realty Pros. She has enjoyed working with both buyers and sellers for over eleven 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.
© 2012 Carol S. Billups