The Palmilla Market Has Not Slowed. It Has Become Selective.
Seventeen homes traded inside Villas del Mar, Espíritu del Mar and Palmilla Cove between November 2025 and mid-July 2026, for a combined US$154.5 million. Closed pricing reached its highest level in the 2010–2026 record. At the same time, roughly a third fewer homes sold than in the prior season. Those two facts are not in conflict. Together they describe a market that is transacting less often, at stronger values, and where the distance between a well-positioned home and an optimistically priced one has widened.
What the 2025-26 Palmilla season actually recorded
Seventeen sales. US$154.5 million in total community volume. An average of just over US$9 million per home. Ten of the twenty-one distinct floor plans and home types across the three communities recorded at least one sale, from entry-level plans through beachfront and custom estates.
Against the prior season, the movement runs in both directions at once. Volume is down roughly 23 percent, on 32 percent fewer transactions. Average price per home is up about 13 percent. Closed price per square foot is up about 18 percent, to the highest figure in the record.
Appreciation and volume are two different measurements.
This is the distinction most commentary on the Los Cabos luxury real estate market gets wrong, and it is worth being precise about.
Transaction volume measures how much changed hands. Price per square foot measures what buyers agreed to pay for what did change hands. A market can produce less of the first while setting records in the second. That is exactly what happened here. Fewer transactions did not pull values down — the homes that traded did so at the strongest closed pricing on record.
The record has never been a straight line. Pricing drifted, flattened, and in one recent year stepped modestly backward before advancing again. Today's level is roughly double where the record began in 2010. That is appreciation earned over more than a decade and a half, and it is a more reliable indicator of Palmilla home values than any single season's transaction count.
Average closed price per square foot, Villas del Mar and Espíritu del Mar, 2010–2026. Source: Michael Baldwin Properties market study.
So: are prices still increasing? On this season's evidence, yes. Is the Palmilla real estate market slowing? Not in the sense the word usually implies. It is transacting more deliberately.
Why some luxury homes are selling and others are sitting
The most useful figure in the study is not the average. It is the spread.
Closed pricing across the home types that traded this year varied by more than two times — inside the same three communities, behind the same gates, in the same season. Beachfront, Hacienda, Phase 1 and custom builds defined the top of that range. Eleven of the twenty-one home types recorded no sale at all.
There is no single market price in Palmilla. The community average sits inside a range that varies by more than two times.
A community-wide average is useful for understanding direction; it is not a benchmark for pricing an individual home. Plan type, location, view, condition and land all sit beneath that average, and buyers now underwrite each of them separately.
Today's buyer arrives having done that work. More than a decade and a half of plan-level pricing history is part of the evaluation, and value is judged against genuinely comparable homes rather than a headline figure. Correctly positioned homes attract serious interest early and tend to transact nearer asking. Homes that begin above the market tend to sit, and frequently settle below what accurate pricing would have achieved at the outset.
Is Palmilla inventory increasing?
Eight homes are currently available across the three communities — five new construction and three resale.
That is not an oversupplied market. But composition matters more than count. Most of the current resale inventory sits in Villas del Mar; most of the new-construction pipeline sits in Espíritu del Mar, with deliveries beginning in the first quarter of 2027 and several homes quoted at eighteen to twenty-four months from start.
The practical consequence is that a buyer weighing a resale home today is weighing it against a 2027 delivery. Further listings are expected as the season opens, which will widen that comparison set again.
What this means inside each community
Villas del Mar holds the majority of current resale inventory and the highest-priced new-construction offering. Espíritu del Mar carries most of the new-construction pipeline, which keeps pricing there closely tied to developer delivery schedules and to what a buyer will pay to avoid an eighteen-month wait. Palmilla Cove, the newest of the three, remains thinly traded, with only a small number of homes available at any time — meaning individual transactions there carry disproportionate weight in setting the record.
One structural note for advisors and brokers researching Palmilla: representation remains highly concentrated. A single office accounted for the large majority of reported listing-side volume, while a handful of brokerages introduced buyers. Depth of representation inside these communities, rather than breadth of agent count, is what moves inventory here.
Should I sell now or wait?
The honest answer depends on the plan type, not on the calendar.
What the data supports is this. Closed pricing sits at the high of the record, and well-positioned homes are still achieving it. Buyers are fewer, better informed and slower to commit. Inventory is expected to widen as the season opens, and each new listing and delivery adds to the set a resale home is measured against.
A seller who prices against this season's actual closed record for their specific plan is entering a market that has demonstrated it will pay record values. A seller who prices against a headline average, or against last season's expectations, should anticipate a longer hold and a lower eventual outcome. That is the practical meaning of a selective market.
Heading into next season
Nothing in this data suggests weakness. It suggests discipline, on both sides of the transaction. Values are at a record, demand remains broad across half the home types in these communities, and choice is set to widen rather than contract.
Market conditions evolve, and positioning deserves a periodic review against the plan-level record rather than the community average. We are glad to review any property's position within its community, in confidence and without obligation.
Source: Michael Baldwin Properties market study, 1 November 2025 – 15 July 2026, compared with the 2024–25 study. Scope covers Villas del Mar, Espíritu del Mar and Palmilla Cove; neighbouring Palmilla-area communities are excluded. Inventory and delivery dates are as reported on 15 July 2026 and subject to change.
About Michael Baldwin
Michael Baldwin is a luxury real estate advisor specializing in Villas del Mar, Espíritu del Mar and Palmilla Cove, the gated communities inside Palmilla, Los Cabos. He has closed more than $2 billion in transactions in his career, and publishes an annual market study of the three communities.