Like the rest of the country, the Palm Desert real estate market continues to normalize after 2021’s hot sellers’ market. As inventory replenishes and home prices reach levels representative of typical market patterns, buyers can count on more housing options and less competition. Review the information below to ensure you’re fully prepared to buy or sell in Palm Desert.
Palm Desert housing market forecast 2023
Palm Desert’s housing market is currently experiencing cooling trends expected to continue throughout the year. Seasonal market fluctuations account for some of the market’s slowing, while high mortgage rates and inflation have further normalized local market trends.
Home values increasing
As of February 2023, Palm Desert homes have a median value of about $600,000. At OMNI, about half of our listings are between $600,000 and $2 million. Homes values in Palm Desert are rising, with median list prices ahead of last year’s. Luxury homes exhibit annual appreciation, and their long-term value represents good investment opportunities.
Uncertain interest rates
California cities like Palm Desert can expect rates to plateau and decline slightly in 2023. As of early 2023, the average mortgage rate for a 30-year fixed loan was 6.5%. This rate is lower for 15-year fixed loans, which average 5.875%. Even though interest rates aren’t rising, high rates remain a serious obstacle for many homebuyers. Your real estate agent will keep tabs on changing interest rates and recommend the ideal window for buying or selling Palm Desert houses.
Investing indicators will favor landlords
Landlords renting properties should enjoy favorable conditions throughout 2023. In Palm Desert, the average apartment rent has increased 19.6% from last year, averaging over $2,000 monthly. Landlords can count on reliable demand as renters make up roughly a third of the housing units within Palm Desert. Housing affordability is lower in Palm Desert compared to national and state levels, which pushes new residents to become renters instead of homeowners. With an increasing population and appreciating property values, we expect sound investments for long- and short-term renters.
Positive net population migration
Palm Desert’s population has an annual growth rate of 0.53% and is currently at 51,979. This is higher than the national growth rate of 0.38%. Since the 2020 census, the population in Palm Desert has increased by 1.59%. A steady influx of new residents should translate into increased demand for housing in 2023 and beyond.
Riverside County 2023 housing market trends
Riverside County mirrors the cooling trends of the Palm Desert real estate market. Home sales have decreased 46.5% compared to last year, indicating less buyer demand. The median price for single-family detached homes has also declined slightly, down 0.8% compared to the previous year.
More housing options are available to buyers as unsold inventory replenishes, up 138.9% compared to last year. Currently, there are 4.3 months of inventory. More inventory and fewer home sales have also impacted the median time on the market, which has increased by 188.9%. However, compared with the national median of 48 days on the market, Riverside homes sell about three weeks faster, with a median of 26 days on the market as of January 2023.
How the market has rebounded from COVID-19
The local market has recovered from the obstacles created by COVID-19. After the pandemic, the rental market has done exceptionally well — rental prices have increased, and apartment vacancies have decreased. Home values also continue to rise within the market’s normalizing trends. The economy has recovered from the pandemic with job growth levels that outrank the state and nation.
Palm Desert housing market entering 2023
Here is a market snapshot per the California Association of Realtors.
- The median home price for a Palm Desert single-family home is $635,000 as of January 2023. This is 4.9% less than the same time last year.
- Palm Desert registers 223 active listings, a whopping 178.8% increase from last year.
- Homes are selling for an average of 97% of their listing prices.
- At 55 days on the market, Palm Desert homes spend more time on the market than the average for Riverside County.
What features drive demand in Palm Desert
Palm Desert’s location at the center of Coachella Valley makes it the perfect spot to access amenities within and outside the city. Buyers are drawn to outdoor recreation like Cahuilla Hills Park, world-class golfing at luxury clubs with mountain views, and neighborhoods featuring spacious properties and inclusive upscale amenities. Palm Desert’s shopping centers are elegant and varied, including 200+ businesses at The Gardens and The Shops on El Paseo. Meanwhile, Palm Desert’s legendary culinary culture offers an exciting bar scene and dishes for all occasions.
Alongside an amenity-rich location, investors can count on demand for desirable properties that maintain their value. Many of the properties within the city are occupied by seasonal residents, which creates a need for renters who target summer or winter vacationers. Short-term investors target Palm Desert for its high appreciation rates, especially in neighborhoods like Lantana.
Best neighborhoods in Palm Desert
Here’s a closer look into some of the most desirable areas in Palm Desert.
Bighorn Golf Club
This luxury neighborhood is nestled at the base of the Santa Rosa Mountains. Individuals residing in Bighorn Golf Club enjoy its privacy, generous amenities, and all-encompassing mountain views that serve as a majestic backdrop to the community.
This private community features properties ranging from 0.7 to five acres. Homes here are ideal for residents interested in country living; residents pay no HOA fees, and the properties are equestrian-friendly.
Buyers searching for a home to raise a family or who want to live close to Palm Desert’s entertainment and recreation will love Lantana. This community has nearby schools suitable for all ages and features 64 newer single-family homes.
How to invest
The Palm Desert real estate market is normalizing but remains a valuable city to invest in. Although median prices across the country are declining, local appreciation rates are among the highest across the state and nation. With a strong economy, luxury amenities, and desirable neighborhoods, Palm Desert continues to attract motivated buyers.
To capitalize on Palm Desert real estate, partner with a local expert at OMNI Real Estate Group. Equally at home with buyers and sellers, the agents at OMNI specialize in luxury real estate transactions, including country clubs near Palm Desert. Contact OMNI today and learn how their team can help.
*Header photo courtesy of Unsplash