Palm Springs has long been a draw for national and international investors, tourists, and homebuyers searching for the sunnier side of life. The desert oasis–situated a mere two hours from Los Angeles’s urban sprawl–doesn’t just teem with California’s signature and singular natural beauty: It is also flourishing with splendid restaurants, resorts both boutique and grand, superb shopping, and an abundance of delightful outdoor activities.
Whether you are considering purchasing a property in this warm-weather haven or are weighing the pros and cons of listing your Palm Springs property, understanding where the market is heading in the coming year is imperative.
Read on for Diane Williams’ Palm Springs real estate forecast 2023–and enter your real estate deal with supreme confidence.
Home prices are expected to fall–but only slightly
Like many places throughout the Golden State, California has enjoyed a fabulous year when it comes to real estate. City dwellers seeking a taste of tranquility in the wake of the pandemic, the spike in remote work, and the growing interest in possessing a vacation home (or two) have contributed to one of the most on-fire real estate markets we have seen in years.
The numbers reflect this. Data reports that, as of September 2022, Palm Springs’ median home price jumped to $619,500–a terrific 23.3% leap from the previous year. While the amount of time Palm Springs’ properties spent on the market decreased from 129 days to 89 days in September 2022, 25% of homes sold above their listing price. Indeed, the hotness of Palm Springs’ housing market was rivaled only by its naturally balmy weather.
Experts across the board, however, believe that, after two years of rising home prices across the nation, prices will begin to decline–although only slightly. Why? On one hand, “stabilization,” as it is sometimes called, is part of the natural cycle of the market. On the other hand, some home buyers are pressing pause on their pursuit of new investments as we await shifts in the economy. Should we fall into a real recession, the Federal Reserve will hike up interest rates, which have already seen an escalation from 3.11% to 5.11%.
Inflation is also predicted to continue rising, which will increase the cost of living–in Palm Springs and across the nation. This has the potential to result in a surplus of inventory but reduced demand. To counter it, prices will normalize to encourage buyers to strike, while the growth of home prices will slow. The tables will turn as a result, and we may transition into a “slight” buyer’s market, giving home buyers greater negotiating fuel. This is predicted to occur around the middle of the year, which will become a prime time for buyers to hop back into the market.
Interest in vacation property will continue to rise
If there is one thing the pandemic and the two years of lockdowns and quarantining have taught us: Life is short, and it is best savored outdoors. Palm Springs is the answer to this. Historically favored by Angelenos, celebrities, and snowbirds alike, it presents people with a stunning outdoor playground. Tennis, golfing, swimming, hiking, running–all are available in spades in Palm Springs. In fact, Palm Springs proper and its surrounding enclaves, including La Quinta, Palm Desert, Rancho Mirage, Indian Wells, and Indio, boast over 140 golf courses. The vibrant city of Palm Springs is also the place to stay during two of the country’s biggest and most happening live concerts: The Coachella Valley Music and Arts Festival and Stagecoach Festival–an annual country music fete that lures huge crowds to nearby Indio.
As such, Palm Springs’ reputation as a leading vacation destination has become amplified. Investors in the coming year will be scouting out properties in the region that can serve as their home away from home and be used as a vacation rental–particularly when these music festivals are in action. In sum, it will further its distinction as a goldmine for investors.
Palm Springs will continue to present a range of investment opportunities
A large part of Palm Springs’ appeal is its wide assortment of properties. Sleek condominiums with high-end touches, sprawling mansions, and Art Deco homes–all are part of what makes Palm Springs real estate unique. The range of properties will attract a range of buyers.
The luxury market will continue to thrive
High-profile properties were going like hotcakes in 2021 as affluent remote workers pursued a quieter place to set up shop and investors capitalized on Palm Springs’ legacy as a top tourist destination. The research firm, Market Watch LLC, suggests that prices of these staggering properties–in Palm Springs proper and its outlying regions–will continue to shoot up through the coming year and lead to more bidding wars.
Working with an experienced real estate agent will be more vital than ever
All-cash offers, purchases above asking price, procuring properties sight unseen–all of these factors may suggest that home sellers are equipped to sell their properties on their own.
However astute you may be about real estate, working with a real estate agent as we move into a more turbulent and less certain market will be crucial. Consummate real estate agents stay on top of every shift in the market, both subtle and significant, to properly advise their clients on the smartest, savviest time to buy or sell. They are also well aware that forecasts are simply that: Predictions, not facts. In 2020, for instance, Zillow predicted that home prices across the board would drop by the spring of 2021. The antithesis occurred instead: Property prices skyrocketed as demand catapulted and inventory narrowed.
DW & Associates are the realtors you need to navigate the coming year. The team, founded in 2004, has a meticulous grasp of Palm Springs real estate trends and changes and offers buyers and sellers the best in negotiating and marketing. Book a consultation with them today to get a leg up on 2023–and realize your real estate dreams.
