I spent last week in Palm Springs (the south end) and Rancho Mirage looking at homes for two clients: one client in the $450k to $600k range, and the other in the $1M to $2M range.
My remarks focus primarily on south Palm Springs (the area south of Downtown Palm Springs).
First of all, it doesn’t take long to look at what’s sold in the past 1.5 years and notice that prices have gone up in the entire Coachella Valley. In the lower range, I would estimate they’ve gone up about 5-10%, give or take, depending on the area, street, and general condition of the home.
In addition, there is a lot of new commercial development, especially in downtown Palm Springs, which recently underwent a $450M redevelopment project that includes restaurants, shops, and hotels. There’s a brand-new luxury hotel on South Palm Canyon Drive, the (awkwardly named) Kimpton the Rowan Palm Springs, boasting the only rooftop pool in Palm Springs atop its seven floors. There are upscale restaurants already, and a new casino in the works.
These kinds of investments are not made for the short term – and that’s saying something about the projected future popularity of Palm Springs.
The big question is, if I buy now, will it be the peak? Prices could go down due to new tax policies and interest rate hikes.
The truth is, no one can know for sure. Markets can change – politics, interest rates, and global issues can all have an impact, and things can slip for a while. But here’s what you should ask yourself: can you afford to buy your desired home or investment, and hold onto it for at least 7 years? If so, then even if the market dips, it most likely will recover, and so will your investment. The last recession hit in 2008, but in primary housing markets, by 2012, things were selling and multiple offers were plentiful.
I tend to be fiscally conservative, so take that into account. Things have been running up for 6 years. It could be risky buying something and hoping to quickly flip it for profit. Learn from the past mistakes of so many. Do not take on too much debt, do not be overextended and without enough liquid assets. If you can afford to hang on, the market will come back.
And don’t forget the big rule: location, location, location. Buy in the best area you can afford. Do not buy on a busy street. If you are in a good location, should there be a soft market, you will sell your home faster and at a higher price that others.
Good fortune, and text or call me if you need assistance.
Stay tuned for my next installment of “Buying in Palm Springs!”
Connie De Groot