The storm has forced 3,000 people from their homes in La Paz, the state capital and a popular tourist destination. But the Red Cross says there are no reports of injury or death.
Mexican sailors aboard motorboats struggled against strong winds to pull sailboats off the rocks in the La Paz harbor. Rear Admiral Joaquin Garcia Silva said those aboard small civilian boats had been evacuated to shore, leaving behind a few craft loose on the storm-tossed waters.
The hurricane tore up a highway, leveled beach huts and knocked down trees with winds that topped 90 mph. Power was cut to La Paz.
"It could have been worse. It could have caught us while we were out there," said Buddy Holt, 36, of Dallas, as he watched the choppy water off of La Paz's boardwalk.
The U.S. National Hurricane Center said Ignacio's maximum sustained winds had slipped to about 75 mph from 80 earlier in the day and predicted it would keep weakening over the next 24 hours.
The hurricane was barely moving Monday evening. It was off La Paz bay near this state capital and fishing harbor. Forecasters said the storm was likely to crawl slowly up the southern Gulf of California toward Loreto while gradually edging over the peninsula itself.
Kenny Mackie, 48, of Long Butte, British Colombia, watched as his 30-foot sailboat "Inertia" was ripped from its mooring in the La Paz harbor in the pre-dawn darkness.
"We could see it going, but when the salt is spraying, the ropes are chafing and the wind is blowing 70 miles per hour, there's nothing you can do," Mackie said. "The sea is just going to do what it's going to do."
To his relief, the boat was later brought safely to a beach.
It was unclear if the storm would move far enough north to bring rain to the southwestern United States. Storm warnings were posted for the coasts of both Baja California and mainland Mexico in a major commercial and recreational fishing zone
Officials said that about 3,000 people stayed in shelters Sunday night. Many, like Abram Pineda, 22, had lived in low-lying cardboard shacks.
"We left our house last night because it felt like the house was going to blow away," he said.
Small fishing boats were pulled out of the water and moored to palm trees around La Paz. Larger boats were either tied up to docks or headed out to sea to ride out the storm.
Juana Quijana Cota, a grandmother and resident of one of La Paz's low-lying shanty towns, spent the night at an improvised shelter in the state university.
"Near dawn, the wind was blowing so hard the rain was coming through the cracks and we though the windows were going to blow out," said Quijana, who was accompanied by her husband, daughter and granddaughter.
Hotels in Loreto and La Paz each receive about 40,000 foreign tourists a year, mostly U.S. citizens, according to statistics from Mexico's tourism department.
The hurricane bypassed Cabo San Lucas, known for its deep-sea fishing, golf courses and a famous arch-shaped rock formation. The resort town is 50 miles south of La Paz.