Is Now A Good Time To Buy A Luxury Home In Palm Springs, CA?

Luxury buyers in Palm Springs, California are seeing a mix that doesn’t happen often. There’s plenty of inventory and very few bidding wars. Sellers, though, are in no hurry to give properties away.

For Hargo Khalsa, a Realtor with Joshua Tree Modern who works with luxury buyers and investors across the Coachella Valley and the high desert, that mix gives buyers a window they may not have for long. “We’re in a buyer’s market, but sellers are being very selective about when they choose to list,” he said. Here is how he reads the market this fall and what he expects next.

A Buyer’s Market Without Distressed Sellers

Many Palm Springs owners bought or refinanced at very low interest rates after the pandemic. Their carrying costs are low, so they have little pressure to sell.

“Life is life, and things change. People need to relocate, or they’re retiring,” Khalsa said. “They have a reason to sell, but they’re being selective about when they sell and what their bottom line is. They’re not in distress.”

He contrasts this with past downturns. After the 2022 peak, some owners were overleveraged. During the Great Recession, many people with adjustable-rate mortgages lost their homes when payments jumped. “This is not that,” he said.

For buyers, the result is more choice and less competition. Prices have come down because of the oversupply, and multiple offers are rare. Khalsa describes it as a fairly even playing field. Well-priced properties sell, and overpriced ones sit. “If sellers are unreasonable, the property is not going to sell. If buyers are unreasonable, the property is not going to sell.”

Why Palm Springs Held Up Better Than The High Desert

Khalsa watched the high desert boom and the 2022 correction up close. Palm Springs prices also rose and then fell, but not nearly as much.

He points to a few reasons. The Coachella Valley has a real employment base and more full-time residents. People moving there for work or retirement need a place to live. In the high desert, most buyers are purchasing vacation homes or investment properties, which he calls a “can do, not a must do” decision.

Palm Springs also works better as a rental area. “It’s a little more of a year-round destination, even though in the summer it’s brutally hot,” he said. The city is known worldwide, and its mid-century modern identity keeps drawing weekend and vacation visitors from across California.

“People ask me where they should invest in the Coachella Valley. Palm Springs is the obvious one,” he said. “Everyone assumes that’s what it should be, and they assume rightly. It has brand recognition and the numbers are pretty obvious.”

How Interest Rates Shape Second Home Purchases

Second-home markets react quickly when financing costs change. In the high desert, Khalsa says the market can shift week by week. Landers, a small community north of Joshua Tree, was at one point among the fastest-appreciating zip codes in the country during the pandemic. After the peak, it became one of the fastest-declining.

Palm Springs is steadier, but rates still matter to buyers who don’t have to buy. Khalsa expects borrowing costs to rise, and that shapes his advice. “Now is the time, before interest rates go back up more, to get in while prices have come down,” he said.

He is already seeing buyers act on that. “There’s been a recent surge. Suddenly properties are going into escrow, and buyers are saying, okay, I’ve got to do this now.”

What He Expects Over The Next Six To 12 Months

Khalsa believes the market has moved through its peak and correction and is now in what he calls the trough. That is a period of small, gradual appreciation before the next run-up. He expects the next six months to look much like today.

Looking two to three years out, he sees the potential for major appreciation in the most desirable California markets, including Palm Springs and coastal areas. He also notes some real unknowns, including global debt levels and the effect AI could have on the broader economy.

His practical advice is to get clear on your goals now while there is room to negotiate. Buyers getting ready to start a search can learn how he works with clients on his Buyers page.

Hargo Khalsa is a California Realtor (DRE #02058377) with Joshua Tree Modern who works with luxury buyers, short-term rental investors, and bonus depreciation buyers in Palm Springs, the Coachella Valley, Joshua Tree, Pioneertown, and California’s Central Coast. He is also a developer through Ground Space, building luxury homes in the high desert.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.