A Photo Tour of Mexico’s Most Captivating Colonial City

“This is may be the coolest small city on Earth.”

That’s what I put into my team’s WhatsApp scouting group as I was exploring the city of Oaxaca in southern Mexico.

If you’ve been following along here in Your Overseas Dream Home over the past week, you’ll know that I’ve been on the road in the state of Oaxaca, scouting for real estate opportunities.

As I write, I’m in the stunning beach town of Puerto Escondido (learn more about that here). Soon, I’ll be moving on to Tulum, on Mexico’s Caribbean coast.

But before all that, I spent about four days in Oaxaca city. And I was blown away by its captivating blend of colonial architecture, vibrant culture, and rich culinary traditions…

Oaxaca de Juárez, to give it its full title, is the capital and largest city of the state of Oaxaca in southern Mexico. This city is known for its colonial architecture, vibrant atmosphere, and rich cultural traditions.

Set in a valley surrounded by mountains, Oaxaca city is a colonial gem. The cobblestoned streets of the city center are lined with colorful historic buildings that house boutique hotels, restaurants, cafés, art galleries, museums…

I was here on November 1st, which is the Day of the Dead, a huge holiday in Mexico. And Oaxaca does it big!

All throughout my visit, the city’s plazas were buzzing, as locals and visitors soaked up the incredible parades, the vibrant markets and stalls, the vivid cultural displays…

The Day of the Dead celebrations in Oaxaca are big, colorful, and a lot of fun!

This was an ideal time to visit the city. Though even without a big festival like the Day of the Dead going on, Oaxaca is still something very special.

This is a vibrant, livable city. The weather is spectacular…year-round temperatures range from about 72 F to 82 F and humidity is low due the city’s elevation (about 12,000 feet above sea level at its highest point).

The people are also friendly and it feels like a safe place to explore.

Brightly painted buildings like this one are found all around Oaxaca City.

Oaxaca is an upmarket, artsy destination…

You could spend days popping into the art galleries, artisanal stores selling local crafts like black pottery and alebrijes (colorful sculptures of fantastical creatures), and stopping for exquisite coffee or meals of the region’s famous mole dishes (mole is a traditional sauce made of various chilis and spices).

Oaxaca has a big artisan scene with stores all around the city selling locally made handicrafts.

The centerpiece of the city’s historic district is the imposing Church of Santo Domingo de Guzman, a magnificent Baroque church originally built in early 1600s. It’s famous for its intricate interior, which features gilt designs swirling around painted figures.

Magnificent both inside and out, the Templo de Santo Domingo is well worth a visit when in Oaxaca.

You can’t go far here without seeing a brightly colored mural painted on a wall.

Like a lot of street art around the world, many of the murals offer some kind of political commentary…they are also incredibly detailed and skillfully painted.

The message on this intricate street art says, “I know that God never dies.”

And it’s not just in the city itself where you’ll find interesting cultural sites.

A short drive from Oaxaca, the ancient Zapotec ruins of Monte Albán offer a glimpse into pre-Hispanic civilization, with incredible panoramic views of the Oaxaca Valley.

I posted this photo of the breathtaking Monte Albán to my Instagram account. You’ll find more photos of Oaxaca there…click here to follow me on Instagram.

Oaxaca is more interesting and culturally rich than any small city I’ve scouted in this region, yet it’s still highly inexpensive when it comes to everyday expenses like meals. Think $2 for a hearty breakfast…$35 for a stunning meal in a high-end restaurant.

So, what’s the catch?

Well, Oaxaca is an established and developed city…it’s far from “undiscovered.” And real estate prices are high, in every corner of the market.

The food in Oaxaca is sensational…here’s a dish of enchiladas with mole and dried peaches I tried at a restaurant in the city.

Colonial buildings in Centro (the heart of the city) can list for about $1 million.

Usually in a colonial city like this, I’d expect to find the “old and overlooked” play, where you’d be able to grab an old historic home that needs work for a song. Not the case here. Wealthy and artsy expats have known about this city for decades and they’ve been coming here, buying old homes and renovating them. 

Oaxaca also has a strong short-term rental market. The tourist season here lasts for 10 months of the year and during that time occupancy rates and prices are high. So real estate here is in demand.

I haven’t given up on finding an opportunity in Oaxaca. I’m going to dig deeper on the real estate market to see what I can uncover. But even if I don’t uncover an opportunity here, Oaxaca is a destination I wanted to tell you about.

It’s a place I would happily visit again—the mix of colonial history, the vibrant atmosphere, amazing food, and the generally welcoming atmosphere make it very appealing. And though it does get tourists year-round, it doesn’t feel overcrowded.

I was here at one of the busiest time of the year for the city, and yet everything ran smoothly.

I didn’t have to queue for 17 minutes for a cup of coffee like I did in Las Vegas a couple of weeks ago. (That Vegas coffee also cost $11!) And despite the huge crowds in Oaxaca for the Day of the Dead festivities, there was none of the travel and transportation chaos that I experienced on the Amalfi Coast in Italy last month. (Read more about here.)

So, if you’re tired of visiting cities with over-priced food…where you’re lining for hours to get into the tourist sites…where you have to elbow people out of the way just to walk down the street, then I’d suggest you put Oaxaca on your travel list.

Ronan McMahon, Founder, Overseas Dream Home & Real Estate Trend Alert

P.S. If you’ve been to Oaxaca, have any questions for me about this wonderful city, or want to share your thoughts about this part of Mexico, I’d love to hear from you. Drop me a line here.