What is Happening in Palm Springs, CA? Real Estate Trends in 2022
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As a real estate broker in Palm Springs, California, part of my job is to oversee transactions and analyze the data. Over 500 agents are a part of my brokerage, so I have access to many data points. This gives me great insight into the current market at any point in time. Generally, I can understand where the local market has been, where it currently stands, and where it may be headed in the near future. With this insight, I can spot trends and make predictions accordingly. I use this information to help set expectations for both my clients and agents and inform material for training courses and workshops. Here, I’ll break down some of the market trends I’m seeing in Palm Springs right now and share some of my predictions for real estate’s future.
What’s Causing Shifts in the Palm Springs, CA Market?
To tell what’s going on in my local market, I compare the number of new listings to the number of listings under contract. I analyze how these numbers change on a daily, weekly, and monthly basis. Recently, the market has shifted, and the shift happened fast. Most notably, buyers’ activity has slowed.
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Buyer and Seller Activity
The significant rise in interest rates has clearly contributed to this trend, but there’s more to it as well. A level of fear has crept in, largely based on the uncertainty of the future. With headwinds coming from all angles, many potential buyers have put their decisions on hold. At the same time, many sellers are still wanting to “cash in” and not miss their opportunity to sell at record-high prices.
We’ve Passed the Peak
However, the market may have already topped out. It takes a bit of time to pin down the market’s “top” or “bottom.” At this point, I believe it is safe to say we reached the “top” of the market in the second quarter of 2022. When we look back at what has occurred over the past 18-24 months, the market will be remembered as one of the best (if not the best) real estate markets on record.
Interest Rates Impact Housing Affordability
Sellers will have to adapt. Increasing interest rates have impacted the affordability of the Palm Springs area real estate market. Buyers who previously were pre-approved at $700,000 (our median home selling price in June 2022) can now only afford $550,000 homes with the increased rates. But sellers aren’t changing prices with the decrease in demand.
As a result, the average “days on the market” for a house has been increasing for the past several months. There are more listings available on the market and there are significantly lower numbers of interested buyers. Homes that are not priced well are sitting on the market for extended periods of time.
Once they catch wind of the market shifts, sellers will reset their expectations for prices and the time of the market. Homes that are in move-in ready condition and are priced well, are selling quickly.
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Real Estate Agents are Here to Support You!
In a shifting market, it is very important to work with an agent who understands the changing real estate trends. Your agent should also be familiar with the type of property you are trying to buy or sell, so they can best advocate for your needs while setting realistic expectations. Working with the right agent can also save you thousands of dollars. The right agent will ensure you are protected and that your best interests are kept at the forefront of the transaction.
