The cost of living is really cheap down there, my buddy only works about 6 months a year and lives down there comfortably the rest. I asked him about crime and he has never experienced it or known any victims in all his time down there. He is not in Cabo though, and I'm sure things must get a little worse in a down economy.
I would bet that it is a buyers market there right now. If you have the resources to get through a down year this could be a great time to buy. My friend down there and I managed restaurants in Park City Utah for years, before I moved to Oregon and started a business.
The service industry in Vegas must be devastated. I have never seen an empty strip, it must be pretty strange.