Palm Springs’ real estate market is showing clear signs of cooling, with average home prices dropping 9% compared to last year, according to the September 2024 Desert Housing Report. The price decline is accompanied by increased inventory, longer selling times, and larger price discounts, indicating a shift towards a buyer’s market in the popular desert city.
The report reveals that a typical 2,175-square-foot detached home in Palm Springs now costs $1,160,000, with a price per square foot of $533.39. This marks a decrease from the previous year’s figure of $1,276,000.
Despite the price drop, Palm Springs maintained its position as the city with the second-highest unit sales in the Coachella Valley, averaging 92 units per month over a three-month period. However, this represents a decline from 109 units during the same period last year.
The city’s housing inventory has seen a significant increase, rising to 552 homes for sale, up from 432 units last year. This surge in available properties has contributed to a “months of sales” ratio of 6.0 months, higher than the regional average of 4.0 months.
“The combination of falling prices, increased inventory, longer selling times, and larger price discounts indicates a shift toward a buyer’s market,” the report states, highlighting the changing dynamics of Palm Springs’ real estate landscape.
Properties in Palm Springs are now selling at an average discount of 3.1% below list price, a figure higher than the regional average of 2.1% for detached homes. The median days on market for Palm Springs properties has increased to 52 days, surpassing the valley average of 49 days.
The cooling trend in Palm Springs is reflected in its dollar sales, which have declined by 23%, one of the largest drops in the region. This significant decrease underscores the extent of the market slowdown in the city.
The changes in Palm Springs’ real estate market appear to be part of a broader regional trend. The Coachella Valley as a whole is experiencing sales 33.5% below normal levels, although Palm Springs seems to be feeling the effects more acutely than some other valley cities.
While Palm Springs grapples with its market challenges, the overall Coachella Valley housing market shows mixed signals. The median price of a detached home in the valley declined to $640,000, marking the fifth consecutive month of decrease. However, this figure still remains $3,750 higher than last year.
Inventory across the Coachella Valley has increased to 2,421 units, 619 units higher than last year. This rise in available properties suggests a potential shift in the supply-demand balance across the region.
The percentage of homes selling above list price in the valley has decreased to 13.8%, down 3.1% from last year. This decline indicates a cooling of the competitive bidding environment that characterized the market in recent years.
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