Residents and home searchers alike love Palm Springs for its luxury neighborhoods and lifestyle, great location near other prominent California cities, and world-class amenities. Those buying and selling in the area can expect a slowing market going into 2023, as inventory will rise and buyers will have the opportunity to be selective with their choices. However, median selling prices will remain high, ensuring sellers receive good offers for their properties. To better understand the 2023 forecast, here’s what you need to know.
Housing market statistics
For a quick understanding of what the housing market looks like today and how that might change in 2023, here are some important statistics to be aware of before diving deeper into the market:
- The Palm Springs median home price was $847,000 as of October 2022
- The sales price per square foot was $454 as of October 2022, up from $361 a year prior
- The median days on market was 59 as of October 2022, down from 288 a year prior
- The number of homes listed for sale have increased by nearly triple since 2021
Palm Springs real estate market
The current market in Palm Springs is beginning to cool, evident in the increase in homes on the market. Current sellers may be feeling the negative effects in how quickly they’re able to sell their properties after listing, while buyers may feel positive effects of decreased competition and increased opportunity. Additionally, an increase in inventory also benefits buyers, who have more options to choose from than a year ago.
It’s important to note that the inventory increase hasn’t created a balanced market. This partially explains the high median sales price, and the increasing sales price per square foot. Sellers who price their properties carefully should still secure good offers on their listings. Additionally, although there was concern for a Palm Springs real estate bubble popping, this likely isn’t the case with the city. Although interest rates increase, normal buyer and seller activity maintains a healthy market. With this in mind, here’s what to expect of Palm Springs next year.
It’s important to note that the inventory increase hasn’t created a balanced market. This partially explains the high median sales price, and the increasing sales price per square foot. Sellers who price their properties carefully should still secure good offers on their listings. Additionally, although there was concern for a Palm Springs real estate bubble popping, this likely isn’t the case with the city. Although interest rates increase, normal buyer and seller activity maintains a healthy market. With this in mind, here’s what to expect of Palm Springs next year.
Palm Springs 2023 forecast
Like trends in greater California and the rest of the country, Palm Springs will experience a cooling going into 2023. Prices will remain high, but the rate of increasing prices will begin slowing down. This is already evident in offers made for Palm Springs detached homes, as buyers paid an average of 4.8% above the asking price, down from 5.2% in May 2022. Alongside decreasing offer prices, fall and winter trends impacting the rest of the year and the beginning of next year will also cause slowing in the market.
Inventory will continue increasing as the market slows, creating more opportunities for buyers. However, it will take a while for inventory to replenish to a normal state. This, coupled with other pressures from buyers, such as increasing mortgage rates and inflation, may make it more difficult to buy in 2023. Sellers entering the new year will still likely benefit from seller’s market conditions but should be mindful of how those conditions shift further into 2023.
Inventory will continue increasing as the market slows, creating more opportunities for buyers. However, it will take a while for inventory to replenish to a normal state. This, coupled with other pressures from buyers, such as increasing mortgage rates and inflation, may make it more difficult to buy in 2023. Sellers entering the new year will still likely benefit from seller’s market conditions but should be mindful of how those conditions shift further into 2023.
Buyers in 2023
Buyers in 2023 can expect a mix of positives and negatives entering 2023. As stated previously, increasing inventory will help diffuse some competition, providing the opportunity to be more selective with the choices and offers you make. Additionally, the slow increase in home prices in the area removes some of the pressure of buying. As factors begin tipping in your favor, you’re better positioned to buy in 2023 than in the past year.
However, be mindful of increasing mortgage interest rates, as they can significantly impact your buying ability. Current rates in California average 7.10% for a 30-year fixed mortgage and 6.27% for a 15-year fixed mortgage. Be sure to explore all your options before locking in a rate.
Additionally, living in Palm Springs is more costly as it’s a luxury destination. The cost of living is 22% higher than the national average, and housing is 44% higher than in the rest of the country. Keep these factors in mind when starting your search in 2023.
However, be mindful of increasing mortgage interest rates, as they can significantly impact your buying ability. Current rates in California average 7.10% for a 30-year fixed mortgage and 6.27% for a 15-year fixed mortgage. Be sure to explore all your options before locking in a rate.
Additionally, living in Palm Springs is more costly as it’s a luxury destination. The cost of living is 22% higher than the national average, and housing is 44% higher than in the rest of the country. Keep these factors in mind when starting your search in 2023.
Sellers in 2023
Much like buyers, sellers can expect a mixed bag going into the new year. Low supply will help keep the market in sellers’ favor, while those who list will benefit from a high median sales price that will remain so. The desirability of Palm Springs itself will always attract buyers to the area due to the luxury properties available and the high-end amenities. Although experts believe that Palm Springs’ market peaked in the second quarter of 2022, sellers listing next year are still in a good position to list.
There are a few things to look out for in 2023 as a seller. For one, a buyer’s power may be impacted by factors like increasing interest rates and a high cost of living. Although buyer demand will persist, the selling process will likely take longer than in the past. Given these factors, sellers should be careful about overpricing their properties in the area, as it could lead to a lingering listing or an unsuccessful sale. For the best results, sellers should work with an agent to get their homes in a favorable condition to sell.
There are a few things to look out for in 2023 as a seller. For one, a buyer’s power may be impacted by factors like increasing interest rates and a high cost of living. Although buyer demand will persist, the selling process will likely take longer than in the past. Given these factors, sellers should be careful about overpricing their properties in the area, as it could lead to a lingering listing or an unsuccessful sale. For the best results, sellers should work with an agent to get their homes in a favorable condition to sell.
Ready to buy or sell in Palm Springs?
Both buyers and sellers entering the Palm Springs housing market have some advantages going into 2023. While increased inventory and slowly rising prices help buyers with their search, persisting sellers’ market conditions benefit sellers looking to list. If you're a seller interested in listing a property, or a buyer searching for homes in Palm Springs, contact one of the experienced agents at the Bernal-Smith Group to guide you through the process.
