We sat down with Carlos Gonzalez Siten, a real estate expert with Berkshire Hathaway HomeServices Baja Real Estate in La Paz, to discuss La Paz’s transformation into a luxury destination, the unique appeal of its residential and commercial real estate markets, and the importance of sustainability in its development. Carlos offers valuable insights into this growing city, from the charm of its bay and community-focused culture to rising property values and key investment opportunities. Interested in learning more about La Paz real estate? Read on and get an insider’s perspective!
La Paz Real Estate Market in 2024: A Year of Growth and Resilience
How would you describe the real estate market in La Paz in 2024 compared to 2023, and what’s driving the changes?
It’s been an exciting year. While 2024 has brought some challenges, particularly for the mid-range market, it’s been my best year in overall sales. The middle segment has slowed a bit, which I attribute to the global economy. However, La Paz is more resilient than other areas like Los Cabos because it’s still growing. We’re at about 75% of last year’s sales.
The fluctuation in the value of the dollar has had a significant impact. When the peso was stronger, we saw more interest from Mexican buyers. La Paz is attractive for Mexicans looking to live, work, and enjoy life here, and this has slowed the gentrification process, which has been a positive trend.
The Impact of Dollar Fluctuations on La Paz Real Estate
Now that the dollar has strengthened again, do you think we’ll see a decrease in Mexican buyers?
Not necessarily. La Paz is still preparing for growth. We have a population of about 300,000, and the city needs more people to support the economy. While luxury developments are increasing, there’s still a focus on making the city accessible to various buyers. The safety of La Paz is another major draw—it’s one of the safest cities in Mexico, and that peace of mind is priceless. People can live comfortably, raise their families, and enjoy the Malecon without safety concerns.
How Remote Work and Technology are Shaping La Paz Real Estate
Many people from Mexico City have moved to La Paz for the quality of life and the incredible marine adventures. What role do remote work and technology, like Starlink, play in attracting new residents?
Remote work has boosted the market. Since COVID, more people are relocating, and with Starlink’s improved internet connectivity, even remote areas of Baja are now viable options for those wanting to work from the beach. La Paz’s proximity to Los Cabos Airport is also a considerable advantage. With one of the most connected airports in Mexico just two hours away, it’s easy for expats to travel back and forth.
Middle Segment Dynamics in the La Paz Real Estate Market
You mentioned the middle part of the market. What price range are we talking about?
The mid-market segment has seen the most fluctuation and is generally in the $200,000 to $300,000 range. These are often condos where people spend part of the year, like retirees from Canada or the U.S. The recent changes in the dollar-peso exchange rate and interest rates have made people more cautious. However, with the dollar rebounding, I expect more expats to return to the market in 2025.
Interest Rates and Buyer Confidence in La Paz Real Estate
Regarding interest rates, many U.S. buyers take loans against their homes’ equity to buy in Baja. Will the recent rate cuts encourage more people to invest?
Absolutely. One of the key selling points for relocating to Mexico is the value for money. Your dollar goes further, especially in La Paz. The cost of living is lower, and the outdoor lifestyle—diving, fishing, enjoying the Malecon—is at your doorstep. For example, many properties near the Malecon offer incredible value in location and lifestyle.
The Malecon and La Paz’s Historic Center: Key Drivers of Real Estate Growth
The Malecon and the historic center are highlights. There’s been a lot of development in that area with new restaurants and shops. How has that affected the market?
The gentrification process in La Paz has created a vibrant mix of Mexican culture and expat communities. Streets like Revolucion thrive with delis, bakeries, coffee shops, and restaurants. I often compare it to Polanquito in Mexico City—it has that same charm but with a Baja twist. And what makes La Paz unique is that within an hour, you can experience both the calm beaches of the Sea of Cortez and the rugged coastline of the Pacific. It’s a great selling point for people looking to relocate.
Inventory Balance in La Paz Real Estate: Is It a Buyer’s Market?
In Los Cabos, we’re seeing a buyer’s market in 2024. How does La Paz compare in terms of supply and demand?
La Paz is in a more balanced state. While there’s been an increase in inventory—especially in pre-construction projects—prices haven’t dropped. We’re at a point where it’s neither a buyer’s nor a seller’s market. I’d say we’re at a 50/50 balance right now.
Pre-Construction Trends in La Paz Real Estate
How much of the current inventory is pre-construction?
About 25-30% of the market is pre-construction. For example, in 2023, three towers sold out before they were even built, with delivery scheduled for 2026. One of the projects I’m involved with is Sancta Residences, which includes 20 condos and is part of that pre-construction inventory.
Sancta Residences: A Fully Financed Pre-Construction Project in La Paz
Can you tell us more about Sancta Residences and the price range?
Sancta Residences is designed to offer a variety of units, with seven different models in a single 21-unit building. The prices range from $300,000 for a studio to $600,000 for a two-bedroom penthouse. The developer wanted to create a mixed-use building that complements the charm of La Paz with architecture that blends into the city’s historic aesthetic.
Santa Residences is fully financed, correct?
Yes, that’s an important distinction. Many pre-construction projects rely on sales to fund construction, but Sancta Residences is fully funded. This ensures the project will be completed on time, regardless of sales. It also allows us to focus on quality, and you can see the difference in construction compared to other projects nearby. The developer is committed to maintaining the architectural character of La Paz, which is reflected in the design and materials used.
The Luxury Appeal of La Paz Real Estate: A Unique Definition of Luxury
La Paz is turning into a luxury city. There’s a specific definition of luxury in Los Cabos, but it’s a different understanding of what luxury means up in La Paz. Can you explain why and how La Paz is becoming a luxury city?
It’s about lifestyle, location, and nature. La Paz offers a place where nature is respected and preserved, which adds much value. When cities overgrow, they often neglect the finer details of how people live, like cleanliness and urban harmony. You don’t see that disruption in La Paz. Here, there’s harmony. If you walk along the Malecón or sail out on the bay, you’ll notice that the city has a timeless feel—like St. Augustine, Florida, with white buildings and no high-rises. It feels like Naples, Italy, a town that hasn’t grown much.
La Paz is a horizontal city, not filled with skyscrapers. Most buildings are no more than five or six stories high, so you don’t get that towering skyline like in Miami or California. It’s all about the view, the quality of walking down the Malecón, and even the affordability. You can still get a beer for 45 pesos, half of what you’d pay in places like California.
In addition, La Paz embraces its cultural side. We have concerts along the Malecón; artists perform every 100 feet for free, and the city of La Paz pays them to perform, making culture accessible to everyone.
Commercial Real Estate Opportunities in La Paz
With all the growth and buzz around La Paz, commercial real estate also seems like an ample opportunity. What are your thoughts on that?
Absolutely, and that’s an area where I’m personally looking to invest. La Paz is somewhat isolated from the rest of Mexico, so everything we get here comes from the country’s center. That creates a commercial and industrial opportunity that wasn’t thought of before in this region. Cabo has thrived because the city grew and the demand for services increased—furniture makers, bakers, and small local producers have all found their niche. You’re not competing with big brands; you’re competing with local businesses.
Many expats relocate here to slow down, live more sustainably, and open their small businesses. They can work, live, and have fun in one place without paying high taxes or making extensive commutes. In La Paz, you can dive, fish, race cars, ride camels, surf, hike, and much more—it’s all right in your backyard. La Paz hosts international events, such as a Tour de France stage and Ironman competitions. It’s a vibrant place with a lot to offer for both residents and visitors.
Developer Lots in La Paz Real Estate: Untapped Potential
Shifting from commercial real estate, let’s talk about developer lots. I know that’s one of your specialties. What’s the market like in that area?
There’s a big piece of land in La Paz that has become very valuable because the original developer defaulted back in 2008. At that time, La Paz was booming, and we even had international flights directly into the city. But when that project failed, development around it continued to thrive. Now, that central lot, which is close to the Malecón, has become a prime location for a new developer to come in and build something significant.
I have five companies from Mexico City, Monterrey, New York, and California looking at that opportunity. Additionally, a high-end luxury development is about 45 minutes outside La Paz on the oceanfront. It’s more of a boutique, hacienda-style community, respecting nature while offering a luxury, private living experience.
Rising Property Values in La Paz Real Estate: An Investor’s Perspective
Prices in La Paz have been rising rapidly. Can you tell us more about that? What has the appreciation trend been like in recent years?
In the past year alone, prices have increased by about 20%. Eight years ago, you could buy a property for around $200 per square meter along the Malecon. Today, that price is between $800 and $1,000 per square meter for first-line oceanfront properties. Second-line properties are about one-third to two-thirds of that price. So, you’re looking at around 30,000 pesos per square meter on the Malecon, and second-line properties go for about 20,000 pesos.
City Investments in Infrastructure and Conservation
That’s a strong appreciation, and it shows how important it is for the city to invest in areas like the Malecon to keep property values rising. Otherwise, you risk only having expensive beachfront properties, while the rest of the town might not be as appealing.
That’s precisely why the city focuses on equalizing development across different areas to avoid that disparity. They’re building new parks, bike lanes, and stadiums to make the city attractive. Of course, La Paz is getting more expensive, and you can’t stop that. But even as prices rise, the city is trying to balance growth with conservation. Some well-known billionaires have even settled in La Paz and are helping promote conservation and the local art and music scene.
Strong Airbnb Market and Low Property Taxes: Key Benefits for La Paz Real Estate Investors
Can you tell us more about the services your team at Berkshire Hathaway HomeServices provides for clients in La Paz and how the strong Airbnb market and low property taxes make it an attractive investment for buyers?
I’d like to emphasize that as part of Berkshire Hathaway HomeServices, we have an exceptional team in La Paz. Our team includes developers, decorators, property managers, and relocation experts, all working together to support clients looking to relocate or buy a second home here. And one thing I haven’t mentioned yet is rentals. La Paz doesn’t have many hotels, so it’s become one of the largest Airbnb markets in the region. This presents an excellent opportunity for people wanting to rent out their properties when not using them. Property taxes here are also meager—just 0.2% of the property value, much lower than most other places, except maybe Dubai. So, it’s an excellent investment from many angles.
