Luxury Home Sales Flatline in the US but Skyrocket in East Cape
Friday, August 30, 2019
The high-end real estate market in the U.S. is drastically different than Mexico’s market right now. The sale of million-dollar mansions has stalled in the U.S., but luxury home sales in Mexico are climbing – quickly. In newly developed areas like Baja’s East Cape, for example, real estate is at a premium with wealthy buyers vying for ocean-front property along the Sea of Cortez.
High-end home sales in U.S. vs. Mexico
Once sought-after mansions are no longer in high demand in the U.S., with luxury homes sales in affluent urban settings like Boston, New York City and Miami seeing some of the biggest loses.
Flatlined sales represent a big shift in the high-end market in the nation. In 2018, sales of $1 million homes hit a record-high with 118,000 homes sold in the first ten months of the year. One year later, just 11,500 homes in the million-dollar price range have sold, according to Realtor.com
What’s behind the drop in property sales? There’s an economic cocktail of problems to blame, including the biggest revision of federal tax code in a generation, market volatility, and rising mortgage rates.
For the first time in years, luxury home inventory is building up causing investors to reconsider American real estate purchases.
Meanwhile, south of the border, high-end home sales are climbing. Real estate sales in Los Cabos, for example, are up 22%, according to a luxury residential market report. A climb that’s happening, in part, from high-end home sales.
Who’s buying high-end homes in Mexico? The growth is being fueled by American buyers, according to experts, who report nine out of ten buyers are U.S residents.
What’s fueling the luxury home boom? Development, for starters. Specific parts of Mexico are rapidly developing. The East Cape of Baja, as mentioned above, has become a hotbed of real estate activity. Million-dollar homes set on calm, sandy beaches with luxurious amenities are luring affluent buyers to the southern tip of Baja.
The flailing market in the U.S. could be fueling the real estate craze in Mexico as well. While investors stray away from luxury homes sales in the U.S. due to uncertain economic reasons, they’re exploring more options abroad – like those in Baja’s East Cape.
Trends shaping the luxury real estate market in East Cape Baja
What is it about East Cape Baja that stands out to affluent buyers? The entire market has seen some dramatic changes over the last few years. East Cape real estate isn’t just defined by high prices and picture-perfect views. East Cape real estate has developed its own standards of living that attract many buyers.
Here’s a look at East Cape real estate trends that attract high-end buyers:
- Rising expectations
New luxury properties like Four Seasons Resort and Residences and Amanvari are raising the level of expectations. These properties offer unprecedented luxuries like fine finishes, premium amenities and lifestyle choices that aren’t found anywhere else on the peninsula.
- Unmatched amenities
Those looking to buy East Cape real estate will find unmatched amenities. Properties like those within Cosa Palmas, for example, offer an exclusive beach and yacht club, an on-sight adventure-planning center, a marina capable of housing mega-yachts, and access to a sea-side 18-hole golf course designed by golfing legend Robert Trent Jones, Jr.
Amenities like these have become a must-have for many affluent buyers looking to maintain a full, convenient lifestyle.
- Outside recreation
In real estate, location has always been important, but a location’s recreational opportunities are now included in a buyer’s consideration as well.
East Cape offers a lot of outdoor recreation choices:
- Fishing: The area was once known as a sleepy little fishing village and while the area has seen massive development, fishing remains a popular activity.
- Kiteboarding: The small East Cape town of Los Barriles is a well-known spot for kiteboarding.
- Scuba diving and snorkeling: One of the oldest coral reefs is just off the coast of East Cape, where an entire underwater world awaits visitors.
- Golfing: There are more than a dozen golf courses surrounding East Cape real estate that meet the needs of every golfer.
- Sunbathing: Beaches on Baja’s East Cape offer mountain views and emerald water.
- ATV tours: Adventure seekers can still trek through “Old Baja” trails that make for the ultimate ATV ride.
These activities give East Cape real estate owners a never-ending list of things to do.
- Tech convenience
East Cape real estate is built with the tech-savvy buyer in mind. The growth of smart home features has inspired developers to include smartphone-controlled features in luxury homes. The list of connected devices ranges from appliances and thermostats to more exotic features that control the temperature and ambiance of a wine cellar or alter the lighting and water features within exotic landscaping.
- Security as a priority
East Cape real estate buyers place security high on their list of priorities. Many of the residents in the area are affluent business owners or celebrities who need privacy and security. Developers have responded with both high-tech and low-tech solutions.
As you may suspect, high-tech solutions include high-end security systems. From digital cameras that cover the entire property to alarm systems that offer an additional layer of protection, East Cape real estate owners rely on these features to ensure a certain quality of life.
While technology can offer a lot of security, low-tech options can be just as effective. Many of the East Cape real estate choices include intricate landscaping that offers a natural buffer. High hedges serve as a green fence while water features and bridges distance homes from public access.
- Green features
Affluent buyers are on the hunt for environmentally-friendly features as well. Luxury homes built with energy and water-saving devices like geothermal heating and cooling systems, tankless water heaters, and reclaimed materials are among the top requests.
East Cape real estate owners believe these features not only save money, but will also improve the home’s resale value in the event of a sale.
Places like Baja’s East Cape have become a luxury buyer’s paradise. While high-end markets in the U.S. waver, the southern slice of Baja offers unparalleled real estate that’s creating a new set of luxury home-buying trends. If you’re interested in East Cape real estate, discover the benefits of joining the community today.