The Palm Springs real estate market is much different than the rest of California. Though most of the Golden State is firing on all cylinders, this one is playing a contrarian role. In fact, it's not your typical market, and it won't follow the same path. This might be because it's thought of as a popular vacation destination.
Most people don't want Palm Springs to be their permanent home. Instead, it's a place to visit when a good venue is there, and the weather is nice. However, you're likely to see countless million-dollar homes in Palm Desert Hot Springs, and a sales decline might be better for investors. Let's learn more.
Palm Springs Housing Market Trends
The three-month average for sales rose to 665 units from 545 last month. However, this is mostly seasonal, so the average should increase for a few more months.
In April, roughly 15.2 percent of all homes sold above the list price, which is lower than one year ago. Likewise, the numbers are different in other locations. For example, La Quinta saw 3.5 percent, and Coachella Valley had 0.0 percent.
Likewise, every city but Palm Desert Hot Springs saw a decline year over year in the average size of homes. This will affect the list price and home values.
There's a median price for a detached home in Coachella Valley of about $685,000. This is up about 1.5 percent from previous years.
Days on Market
The average selling time for Palm Springs is increasing. By the end of April, the days on market median number for Coachella Valley was about 48 days. This is the same as March, but longer than last year. Overall, the ratio is under the pre-pandemic average.
The Price Range for Home Sales
Each price bracket shows a decline in sales, but the largest ones happen for homes priced from $400,000 to $700,000. Likewise, million-dollar homes have seen a sales improvement, so they're down by about 33 percent. However, homes priced between $900,000 to $1 million are only down 25 percent. This is slightly better than previous months.
Factors Affecting the Palm Springs Housing Market
The median home value for Palm Springs is about $396,300. Right now, it's appreciated by about 7.9 percent in the past year, but it's still less than the California average. Likewise, real estate won't keep up with California here. Still, there should be a 2.4 percent increase in home value.
1. Median Price
The median price for rent in Palm Springs is $2,400, which is lower than the California average. This value-to-rent ratio indicates that Palm Springs or even Indian Wells would be a top place to purchase rental property. Houses cost less here and fetch almost as much rent as in other parts of the state.
Palm Springs hasn't seen an equity return to the market. Therefore, the city still has a foreclosure crisis on its hands. The foreclosure rate has increased, and there are about 168 houses in foreclosure right now.
This can be a good thing for investors. Those who have capital or funding will be able to buy houses for a decent price. Even if some rehabilitation is needed, it's likely to be simple. Therefore, you can buy and flip or even rent for a long-term passive income.
Will the Housing Market Crash in Palm Springs?
It doesn't appear that Palm Springs will see a housing market crash. Though home sales are up slightly, it's considered a balanced market.
Palm Springs Housing Market Statistics
- The median home prices for Palm Springs was $799,000, which is up about 6.5 percent.
- The median home price (square foot) was $471.
- The median home sold price was about $541,000.
- Houses in Palm Springs sold for about 1.61 percent below the asking price bracket.
- Median days on the market were 84.
- The GreatSchools rating for Palm Springs is "good or higher." There are 22 public schools and eight charter or private schools.
- The sales-to-list price ratio is 98.39 percent.
Housing Market Predictions
Overall, analysts feel that home prices will continue falling, though it shouldn't be a huge decrease. Houses might be less affordable with high monthly mortgage payments.
Lower Home Prices
Experts feel that home prices will not decrease overall because of the limited supply. Still, sellers might have to drop the price to get things sold. This can be beneficial for landlords and property investors.
Palm Springs Housing Market Predictions
Many experts feel that Palm Springs is in a seller's market. Therefore, prices will be higher, and homes will sell faster. If you don't mind foreclosures, you can probably find good deals in the city, though you may have to shift your sights to right outside the area.
Overall, the real estate market in Palm Springs goes to the beat of its own drum. That could be a good thing for investors. Though San Francisco and San Diego are leading the movement for high rent and few homes for sale, Palm Springs works differently. The prices might not appreciate similarly, but rents are still comparable.
Which Cities in California Have the Lowest Median Selling Time?
Currently, Coachella and Palm Springs hold the title for the lowest selling time for detached homes. Respectively, the numbers are 21 and 40 days. Likewise, Palm Springs holds the title for the attached market with 26 days.
Should I Invest in Property in Palm Springs Right Now?
It's hard to say if now is the best time to invest in rental properties. Though the price for a home is relatively high, you can find deals through foreclosures. Likewise, rent prices tend to be comparable to larger cities, helping you recoup your money sooner.