Oaxaca, Mexico, is an extremely diverse and attractive place to own a home and/or commercial property. It’s quickly becoming one of the world’s most popular destinations for American expats looking to buy real estate, including homes, land, and commercial properties. In 2025, English speaking people buying property in Oaxaca include retirees, those able to work online, successful artists, local business owners, wealthy investors, and those just looking to escape stressful first world conditions.

Whether you prefer the historic charm of the expensive city center or the quiet beauty of the highly affordable countryside, Oaxaca has a neighborhood that suits your lifestyle. Let’s dive into the top eight expat-friendly neighborhoods for housing and land in Oaxaca.

The heart of Oaxaca City, Centro Histórico, or the historic city center in English, is where history and culture come alive with a mix of museums, restaurants, and festivals. “El centro” is known for its vibrant markets, colonial architecture, bustling zócalo (central square), and vibrant Santo Domingo cathedral. This neighborhood is perfect for expats who desire to be immersed in the center of the action.

Homes in Centro Histórico often feature restored colonial facades, high ceilings, lush courtyards, and original adobe architecture. These properties tend to hold their value well, making them a smart investment, assuming you are wealthy enough to afford it. Prices are much higher compared to other areas, and it’s realistically going to cost around a million dollars ($1,000,000USD) to own a home in the historic center of Oaxaca. For this reason, the majority of properties in the compact and walkable historic center are businesses, including hotels, Airbnb rentals, long term rentals, stores, art galleries, health care facilities, and a multitude of restaurants of all kinds.

A notable exception is a new trend to have small, modern condos in the Oaxaca historic city center at a price well under half a million dollars.

Note that water shortages, excessive traffic, noise, and light pollution are common in the Oaxaca City center. Federal regulations from INAH, as well as UNESCO, rigidly enforce the preservation of structures that are hundreds of years old. It’s definitely not a modern city, however that’s exactly why el centro is charmingly historic, more than almost any other region of Mexico.
   

East of Centro Histórico lies the artistic enclave of Barrio de Jalatlaco. Known for its cobblestone streets and colorful murals, this neighborhood offers a quieter alternative to the bustling city center while still being close enough for convenience and walkability.

Real estate options include quaint traditional homes and modernized properties that retain the area's charm. Many expats are drawn to Jalatlaco for its laid-back vibe, making it ideal for retirees or digital nomads seeking a peaceful yet connected lifestyle.

Jalatlaco properties became very popular during the pandemic, leading to intense sales during approximately 2020 to 2023. Currently, the value of land (per square foot) is the highest in the entire state of Oaxaca, higher than even in the historic city center (el centro). Jalatlaco is small, and there simply haven’t been many houses for sale here in 2024 and 2025. Houses that do come on the market tend to sell in a few months without much public advertising, as compared to most regions having houses advertised on the market for years before selling.

San Felipe del Agua, located in the northern part of Oaxaca City, is a prestigious area that attracts expats seeking quiet, tranquility, and space. The homes above the Avenue México 68 are particularly desirable, offering luxury properties with stunning views and larger plots of land.

This area is known for its cooler climate, tree-lined streets, and proximity to nature. It's perfect for families or retirees looking for privacy and comfort while staying within a short drive of downtown Oaxaca.

Upper San Felipe has traditionally had the biggest and nicest houses in all of Oaxaca. There’s not much vacant land left to build, and most houses are at least a decade old up in this nicest part of town. While no part of Oaxaca is immune to drought effects, the San Felipe del Agua municipal water supply has traditionally held up better than the aging infrastructure in the touristic zones below including el centro and Jalatlaco.

For expats who love San Felipe del Agua but prefer a more practical option, the area below Avenue México 68 is ideal. It’s about a 30 minute walk to the historic city center. Houses tend to have relatively modern construction, including modern water systems, in Lower San Felipe.

Properties offer modern amenities, a sense of community, nearby shopping, easy access to highways, and public transportation. This part of San Felipe is great for expats who want to enjoy the neighborhood’s perks, such as local markets and proximity to schools.

There are fewer high end mansions in Lower San Felipe as compared to Upper San Felipe. A recent trend since about 2023, however, is a higher average price of a house with private land in the lower part, due to its proximity to the tourist zone in el centro. The Guadalupe Victoria area, a separate municipality to the west of Lower San Felipe, still has some land without construction as well as moderately priced properties with existing houses.

Tlalixtac de Cabrera offers the best of both worlds: a peaceful countryside setting just a short drive from Oaxaca City. This area is perfect for expats who want to build their dream home on a larger plot of land or enjoy a slower pace of life. 

The most growth, by Mexican nationals and expats alike, has been concentrated in Tlalixtac since about 2022. About half the land is still open, as opposed to the above historic areas and San Felipe which are simply “saturated,” as Mexicans would say. The Tlalixtac community is friendly. The natural beauty of the area is unmatched, in part due to the highly fertile soil.

Tlalixtac is still affordable in 2025, however land prices have approximately doubled since 2020. Water is typically found 10-20 feet below ground level, and most foreigners choose to have water independence by constructing a hand built well on their property. Alternatively, on the south side of the International Highway, nearby San Sebastián Tutla also has ample groundwater. San Sebastián Tutla hasn’t yet experienced the growth surge of Tlalixtac.

Nestled at the foothills of the Sierra Norte mountains, San Andrés Huayapam is a picturesque village that appeals to nature lovers and outdoor enthusiasts. With its lush landscapes, hiking trails, and a strong sense of community, this area is becoming a favorite for expats.

Properties in Huayapam include spacious homes and plots of land perfect for custom builds. It’s an excellent choice for those seeking serenity while remaining just 20 minutes driving from Oaxaca City.

One commonly cited disadvantage of Huayampam is that, unlike the above mentioned areas, there isn’t much private property here. Much land is designated as communal land, not private property, meaning that there is a considerably more complex process for foreigners to legally purchase in this zone.

These neighboring towns, located about 30 minutes driving northwest of Oaxaca City, are known for their strong artistic communities and natural beauty. San Agustín Etla is home to a renowned arts center, while San Sebastián Etla offers a peaceful village atmosphere.



Real estate options here include charming village homes and larger plots of land, ideal for creative expats or those seeking a retreat from city life. The cooler climate and breathtaking views add to the appeal.

It’s small town life, with an abundant supply of water running in rivers and roadside irrigation channels. It’s an excellent choice if you like outdoor activities such as gardening, hiking, or bicycle touring. As a disadvantage, rush hour traffic between these towns and the city center has been heavy since about 2022 as these areas are connected by only a single major highway.

Located south of Oaxaca City, these towns offer an affordable alternative for expats seeking authentic Oaxacan culture. Xoxocotlán is known for its absolutely amazing Day of the Dead (Día de Muertos) celebrations. Zaachila was the political capital in the prehispanic Zapotec era. Cuilapan de Guerrero boasts spectacular ruins of an ex-convent.



These areas are perfect for expats on a budget who want to experience real Mexican life while still having access to modern amenities. With a mix of homes and land for sale, these towns offer great opportunities for first-time buyers.

Most properties are independent of the municipal water supply, providing the opportunity to have a well and sustainable sewage system. Lots for sale are relatively small, however there are ample opportunities to purchase larger, multi-lot lands for larger builds or subdivision for resale. This southern area is closest to the international airport and normally has the least traffic of all areas mentioned in this 2025 Oaxaca real estate buyers guide.

Oaxaca’s diverse neighborhoods and towns offer something for every expat, from colonial charm to modern houses to rural tranquility. Before buying in Oaxaca, it’s important to understand how the Oaxaca real estate market has changed significantly over the last 5 years. Smart buyers are planning accordingly for future changes over the next decade or so.

One thing extremely clear is that Oaxaca is diverse and changing rapidly. It’s important to have local knowledge of the communities, neighborhoods, and developments to make an informed choice when buying. This 2025 real estate buyers guide will give you a general idea of where to start looking, however it’s best to work with experienced, bilingual local agents if you’ve been living or working in Oaxaca for less than about a decade.