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Late afternoon light cast a warm glow to a golf course in Palm Springs, California
Photo: Ron And Patty Thomas/Getty ImagesLate afternoon light cast a warm glow to a golf course in Palm Springs, California
Late afternoon light cast a warm glow to a golf course in Palm Springs, California
Late afternoon light cast a warm glow to a golf course in Palm Springs, California
Apartment dwellers want more space. Schools are extending distance learning. Workplaces are lengthening WFH timelines. All this means it’s no surprise that another popular getaway destination for the Bay Area is so hot, it can’t keep up with the demand for real estate.
The Coachella Valley, which includes Palm Springs, is having a record-breaking year that shows no sign of stopping. The median detached home prices for Palm Desert and Palm Springs have had year-over-year gains of 11.5% and 11.2% respectively, according to the Palm Springs Regional Association of Realtors. Since summer is usually considered the slow season for the hot, arid desert communities, real estate agents are predicting these gains to continue through the fall.
“I don’t see it slowing down, we’re not even in our season yet,” said Redfin agent Kimberlee Morgan. “The snowbirds will be coming back. We don’t anticipate it slowing down until at least 2021, especially with mortgage rates being low. It’s the perfect storm.”
Meanwhile, Valley inventory, at 2,050 units, is at the lowest level in history. That’s almost 700 units fewer than any previous August 1st, which has led to a fiercely competitive market full of multiple bids and little to no contingencies.
“We’re getting multiple offers on almost every transaction,” said Maria Krajco, an agent with KUD Properties. “Everything is going at asking or above. There’s a lot of cash offers. There’s just a lot of money coming in. You just can’t get as much for your money in the big cities.”
In years past, multiple overbids were uncommon, as were shortening or eliminating contingencies all together. This strength is confirmed by a median value of only 56 “days in the market,” which is the lowest number of days in over five years.
Another change Morgan didn’t anticipate was how many properties she’s sold sight-unseen. Especially because of intense competition, there’s simply no time to fly down to see a property you like. She said it’s put a renewed pressure on the agent to be trusted to find a home that fits a buyer’s needs.
“The market is crazy,” Morgan said. “We are seeing multiple offers 10 or 12 offers coming in over asking on homes coming listed 48 hours ago. Inventory is at an all time low. It’s a feeding frenzy when something becomes active.”
Both agents agreed most buyers are coming from California, with the next largest contingent coming in from Washington.
Krajco said another factor driving the market is the strong short-term rental market. Even if buyers don’t see themselves living there long term or fulltime, they still see properties as a good investment since it’s been cited in a recent study as the best place in the country to invest in an Airbnb property. As a host to both the Coachella and Stage Coach music festivals, as well as being a popular destination for bachelorette parties and winter tourists, analytics firm Airdna said it’s easy to cover your costs in just a few weekends.
“Ten years ago this was a little retirement community with avid golfers,” Krajco said. “Now there’s just so much happening out here it’s attracting younger people. They’re building surf parks. They’re bringing in a professional hockey team. Plus you can get to both the beach and the mountains within two hours.”
“Everyone just wants that Palm Springs vibe,” Morgan said. “They’re tired of being cooped up. Even if they’re working at least now they can look out at the pool and the palm trees and it’s just a different feeling.”
Tessa McLean is a digital editor with SFGATE. Email her at tessa.mclean@sfgate.com or follow her on Twitter @mcleantessa.
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August 10, 2020 at 07:24PM
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'It’s a feeding frenzy': Palm Springs real estate inventory at historic low - SF Gate
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