Palm Springs Real Estate Market 2025: Surprising Trends & 2026–2028 Outlook

Key Facts (2025 Highlights)

• Stabilizing Home Prices: Palm Springs home values leveled off in 2025 after the frenetic rises of 2020–2022. Median home prices hover around the mid-$700,000s, representing only a modest change from last year. Detached single-family homes saw a slight year-over-year price dip (~3%↓), while condos/townhomes edged up (~2%↑).
• Shift to a Buyer’s Market: Inventory has swelled to multi-year highs – around 750 homes on the market mid-2025 (up ~20% YoY) – giving buyers more choices and bargaining power. Homes are sitting longer (50–60 days median DOM, up from ~46 days) and selling ~4% below asking on average. Only ~11% of homes sold above list price in mid-2025, down from 15% a year prior.
• Who’s Buying: The desert draws a diverse mix of retirees, remote professionals, seasonal snowbirds, and investors in 2025 coastline840.com. Many buyers hail from high-cost coastal cities (LA, SF, etc.) seeking value and sunshine coastline840.com. Palm Springs maintains one of the highest LGBTQ+ homeownership rates in the nation, and its relaxed, resort lifestyle continues to attract creative types and mid-century modern enthusiasts.
• Hot Neighborhoods & New Developments: Luxury enclaves like Old Las Palmas, Vista Las Palmas, and Indian Canyons command seven-figure prices for iconic mid-century estates. More affordable options exist in North Palm Springs (Desert Park Estates, Racquet Club Estates) where windier locales trade at relative discounts. New master-planned communities such as Miralon are adding hundreds of modern homes (many ~$1M+) to meet demand, and projects like Aloe Palm Canyon are bringing 71 affordable senior units online engagepalmsprings.com eahhousing.org.
• Commercial Real Estate Resilient: Palm Springs’ tourism-fueled economy kept hotels and retail in demand. A highly anticipated luxury hotel (Hyatt’s Thompson Palm Springs) opened downtown in late 2024, signaling confidence in hospitality. Major events (Coachella, Modernism Week, BNP Tennis) fill up the valley’s ~19,000 hotel rooms and rely on vacation rentals to accommodate overflow palmspringslife.com. Meanwhile, the city approved a 2 million sq. ft. warehouse project in 2025, aiming to bring 750 logistics jobs by late-decade – a significant industrial expansion for the north end.
• Infrastructure & Growth Outlook: Key investments are underway: Palm Springs International Airport’s master plan (approved 2025) will add a new concourse (7 extra gates), expanded baggage claim, rental car center, and customs facility for international flights kesq.com. A 40-mile CV Link pathway connecting valley cities is nearing completion in 2025 to boost regional mobility. These projects, along with a potential Convention Center upgrade and ongoing downtown revitalization, are poised to enhance the city’s appeal. Forecasts through 2026–2028 anticipate modest price growth (low single digits annually) as mortgage rates stabilize. Opportunities abound for buyers and investors in this cooling-but-steady market, but risks – from high interest rates to regulatory changes and climate – remain on the radar.

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Palm Springs Residential Real Estate in 2025

Cooling Off from the Boom: After the red-hot pandemic-era market, Palm Springs real estate entered 2025 in a calmer state. The bidding wars and rampant cash offers of 2021–2022 have faded; instead, buyers and sellers find themselves on more equal footing. Home price appreciation has essentially plateaued – the median sale price is roughly in the mid-$700,000s range citywide, a level that has held relatively steady over the past couple years. By mid-2025, the average single-family home value was about $652,500, down a modest ~1.9% year-over-year. In other words, prices have softened slightly but remain near record highs, reflecting a balanced market rather than a crash.

Inventory & Sales Trends: One of the most notable shifts in 2025 is the rise in housing inventory. Active listings in Palm Springs were up roughly 20–30% from a year prior, reaching levels not seen in several years. In June 2025, Palm Springs had ~754 homes on the market, the highest of any Coachella Valley city thepalmspringspost.com. This equated to about 5.5 to 5.6 months of supply, a clear jump from ~4 months supply the year before – tipping conditions toward a buyer’s market. Homes are generally taking longer to sell as well: the median days on market stretched to 52–60 days by summer 2025, compared to ~46 days in 2024.

Meanwhile, sales volumes have slowed slightly. In the spring quarter of 2025, Palm Springs recorded 135 home sales, down from 149 in the same period of 2024. Some reports even noted a small uptick in sales in certain months (128 sales over a recent 3-month span vs 120 previously), indicating pockets of sustained demand. Overall, however, buyers are more choosy and not rushing deals, given the wider selection. Sellers, in turn, face more competition and must price realistically. About 41% of listings had to cut their asking price by mid-2025, a sign that aspirational pricing from last year is being reined in. Only a tiny 2% of listings were increasing prices during listing, as the market no longer tolerates overbids.

Buyer’s Market Conditions: These dynamics translate into greater negotiating power for buyers. On average, homes are now selling about 4% below the list price, versus just ~2–3% below last year when sellers had more leverage. “Buyers have more room to negotiate than before,” notes a local realtor, as inventory growth and longer selling timelines make sellers more flexible. Indeed, by summer 2025 many well-qualified buyers with financing in order are finding they can include contingencies, bid under asking, or get seller concessions – situations that were rare at the height of the frenzy. Importantly, mortgage rates remain a headwind: 30-year loan rates hovered around 6.5–7% for much of 2025, roughly double the rates seen in 2021. This has pinched affordability and is a major reason sales aren’t higher. Industry forecasts predict rates will average ~6.7% in 2025 and ease slightly to ~6.4% by year-end, keeping the market in check. Buyers sensitive to monthly payments are either negotiating prices down or sitting on the sidelines awaiting lower rates.

Price Segmentation: Not all segments of the market are behaving identically. The luxury tier (often defined as ~$1.5M and up in Palm Springs) has remained relatively resilient. According to a June 2025 luxury market report, high-end home prices are holding steady and inventory is balanced at around a 6–7 month supply. Even though luxury listings are taking longer to sell (many multimillion-dollar estates sit for several months), this segment isn’t seeing distress – affluent buyers are patient, and sellers aren’t slashing prices. In fact, Palm Springs is noted as one of the more stable luxury micro-markets in the valley, faring better than nearby Rancho Mirage or La Quinta in volatility. Established prime neighborhoods like Old Las Palmas, Vista Las Palmas, and Indian Canyons continue to attract luxury buyers, and experts suggest that once the broader market momentum turns positive (e.g. if interest rates dip), competition for these trophy properties will heat up quickly.

The mid-market is arguably the sweet spot in 2025. Homes priced roughly in the $700k to $1.3M range are seeing the strongest buyer demand. Many of these are the classic Palm Springs single-family homes that offer desirable features – updated mid-century modern designs, private pools, mountain views, and perhaps the potential for short-term rental income. Such properties often receive multiple inquiries and spend less time on market compared to both entry-level condos and uber-high-end estates. It appears a lot of buyers are seeking a “lifestyle upgrade” in Palm Springs – they want a home that can serve as a personal resort or profitable vacation rental – and mid-range pool homes fit that bill. On the other hand, the lower end (sub-$500k condos) does have interest from retirees and second-home seekers, but this segment is limited by inventory and sometimes HOA restrictions. And the ultra-high end ($3M+ estates) tends to move slower simply due to a smaller buyer pool, though values there are stable.

Rents and Second-Home Market: It’s worth noting that Palm Springs has a robust vacation rental market, which affects the residential scene. Many homes are bought either as part-time residences or pure investment properties to operate as short-term rentals (STRs). The city’s attractive rental yields and tourism draw mean a well-located 3–4 bedroom home with a pool can generate significant income from Airbnb/VRBO, especially during peak season. This has propped up demand for certain homes (particularly stylish mid-century houses with resort-like yards). However, Palm Springs city enforces strict vacation rental regulations: owners must obtain permits, pay a hefty transient occupancy tax (TOT), abide by “good neighbor” rules (no loud music, etc.), and some neighborhoods or HOAs outright prohibit STRs coastline840.com. These rules have capped the number of legal rentals and prevented the kind of oversupply that could hurt home values. In fact, short-term rentals remain integral to the local economy, generating nearly $1 billion in annual economic impact through visitor spending on lodging, dining, and shopping palmspringslife.com. So far, the city has managed to balance this industry via regulation rather than banning it, which gives some confidence to investors – though any future rule changes (e.g. tighter caps on rental permits) pose a risk.

Buyer Demographics and Demand Drivers

Retirees and Baby Boomers: Palm Springs has long been a retirement haven, and that continued in 2025. With warm winters, abundant golf courses, and healthcare facilities, the Coachella Valley attracts many baby boomers leaving colder climates. Retirees (often 55+) remain a significant share of homebuyers, frequently purchasing second homes or relocating from pricier California locales. The average age of Palm Springs residents is about 48, reflecting this mature skew. Age-qualified communities and condos with low maintenance appeal to this group, as do the city’s active social scene (arts, dining, LGBTQ-friendly community) and healthcare infrastructure.

Remote Professionals and Young Boomers: An emerging trend is the influx of remote workers and mid-career professionals choosing Palm Springs for its lifestyle. The rise of work-from-home has enabled some younger buyers (30s-50s) to move away from big-city grind and get more house for their money in the desert. These folks often keep jobs based in LA, San Diego, or even out-of-state tech firms, but enjoy Palm Springs’ resort-like atmosphere daily. Improved internet connectivity and co-working spaces have made it feasible. Many are lured by the idea of a mid-century modern home with a pool office, or the laid-back pace to foster creativity. This demographic has added to demand, particularly for stylish updated homes near downtown or trendy neighborhoods like Deepwell Estates or Tahquitz River Estates, which offer a blend of classic architecture and walkability to amenities.

Second-Home Owners and Snowbirds: A large portion of Palm Springs property owners do not reside full-time. Seasonal residents (“snowbirds”) flock from the Pacific Northwest, Midwest, or Canada during winter months, doubling the valley’s population in peak season. They often own condos or homes used in winter and rented out (or left vacant) in summer. In 2025 this pattern held strong, with Canadians returning as travel normalized and domestic retirees continuing their annual migration. This seasonal demand means the housing market has an element of cyclicality – home sales and prices tend to firm up in the fall/winter when these buyers are in town shopping, and can be softer in the hot summer when many leave (indeed, savvy buyers may find better deals in the off-season) coastline840.com.

Additionally, a weekender crowd from Los Angeles fuels demand for Palm Springs condos and villas. Just a 2-hour drive from LA, Palm Springs has long been the getaway of choice for Angelenos (including many celebs) looking for sun and relaxation on weekends. Many of these buyers seek trendy condos or historic bungalows they can escape to on short notice. This has kept certain complexes and smaller homes in high demand despite higher interest rates – the lifestyle benefit is the driving factor, not just economics.

Investor Buyers: Investors – both small-scale and institutional – remain active in the Palm Springs area. On the residential side, vacation rental investors form a key part of the buyer pool coastline840.com. They evaluate homes based on rental income potential and favor properties with amenities like casitas (guest houses), scenic views, and proximity to downtown or event venues. Many are banking on sustained tourism; as noted, large events (Coachella music festivals, Modernism Week, tennis tournaments) draw hundreds of thousands of visitors for whom rental homes are ideal lodging. Data shows that with only ~19,000 hotel rooms valley-wide, those events need short-term rentals to meet excess demand palmspringslife.com, so well-operated vacation homes can achieve high occupancy and rates during peak times.

Other investors look at fix-and-flip opportunities, given Palm Springs’ treasure trove of mid-century houses. Snapping up an outdated 1960s ranch, restoring its architectural glory (polished concrete floors, breeze block walls, etc.), and reselling it to design-savvy buyers can be lucrative. Even institutional investors have dipped in, though less so than in major metro areas – here it’s more niche and property-specific. Notably, some investors are now eyeing build-to-rent developments or small multifamily properties to serve the local workforce, since long-term rental demand from year-round residents is steady and new apartment construction has been limited.

Lifestyle and Demographic Highlights: Beyond these groups, Palm Springs’ buyer profile has some unique facets. The city is a renowned LGBTQ+ friendly community – in fact, it boasts one of the highest percentages of LGBTQ homeowners in the country. This has been a draw for many LGBTQ individuals and couples seeking an inclusive, welcoming place to live or retire. The city’s cultural events like Pride, film festivals, and Modernism Week cultivate a diverse and vibrant social scene that continues to attract people from all walks of life. There is also an undercurrent of younger entrepreneurs and creatives settling in Palm Springs, drawn by relatively affordable commercial spaces and the city’s hip revival (new boutique hotels, trendy restaurants, art galleries, etc.). While not a huge segment, this adds to the “creative class” presence in downtown neighborhoods.

Popular Neighborhoods and Housing Options

Palm Springs is a city of eclectic neighborhoods, each with its own character and price point. Architectural heritage is a big differentiator – the city is famous for its mid-century modern homes and historic celebrity estates, which remain highly coveted.

• Old Las Palmas: Arguably the most prestigious neighborhood, Old Las Palmas is known for its sprawling estates and past celebrity residents. Lush landscaping and palm-lined streets give it an oasis feel. Homes here often exceed $2–3 million, especially if historically significant or restored modernist gems. Buyers pay for privacy, large lots, and Hollywood cachet. Recent sales include meticulously preserved mid-century estates that traded well into seven figures. If you want classic Palm Springs glamour (neighbors include recognizable names), this is the spot – just be prepared for eye-popping price tags.
• Vista Las Palmas & The Movie Colony: Adjacent to Old Las Palmas, Vista Las Palmas also features iconic mid-century designs (e.g. the famed Alexander-built “Swiss Miss” A-frame homes) and was home to stars like Dean Martin. Similarly, the Movie Colony neighborhood boasts Old Hollywood pedigree (former homes of Marilyn Monroe, Liberace, etc.). These areas see strong luxury demand; a stylish renovated Alexander house with pool can easily fetch $1.5M+. They are walking distance to downtown, adding to appeal. Expect a mix of architectural tourists driving by and high-profile owners who appreciate the mid-century Modernism appeal.
• Indian Canyons: Located in south Palm Springs around a golf course, Indian Canyons offers a mix of classic mid-century ranch homes and custom contemporaries, many on fairway lots. It’s known for a high concentration of 1960s Palmer & Krisel-designed homes (but on larger lots than the central neighborhoods). Prices generally run in the $1M–$1.5M range for updated examples. Indian Canyons remains a favorite for luxury buyers wanting a vintage vibe with golf and mountain views. It’s mentioned among neighborhoods that will see competition ramp up once high-end demand rebounds, thanks to its stability and scenic setting.
• Deepwell Estates & Tahquitz River Estates: These adjacent central neighborhoods mix classic desert architecture with convenience. Deepwell (named for its historic well) features many mid-century homes that are impeccably maintained; Tahquitz has a blend of Spanish Revival bungalows and modern remodels. Both are close to popular restaurants, cafes, and the south end of downtown. Homes here often range from $800k to $1.3M depending on size and updates. Buyers like that they can get a quintessential Palm Springs home (sometimes even a famous architect design) in a neighborhood that’s quiet yet walkable to amenities. These areas often see strong mid-market demand and are popular for vacation rental buyers due to their central location.
• Desert Park Estates & Racquet Club Estates: For more value-oriented buyers, the northern end of Palm Springs provides slightly lower price points. Desert Park and Racquet Club (north of downtown) are known for mid-century tract homes (many by the Alexander Company) that are more modest in scale – think 3BR/2BA ranches. Prices here can be in the $600s to low $800s (somewhat less than south or central PS), making them attractive to first-time desert buyers. The trade-off is often more wind (the north end is exposed to the San Gorgonio Pass breezes) and a bit further from the nightlife of downtown. Nonetheless, these neighborhoods have surged in popularity in recent years as people recognized the mid-century bones and started renovating. A well-done Racquet Club rehab with a pool can still breach $1M, but there are finds below that. These areas demonstrate the budget range of Palm Springs – you can find a single-family home under the median price if you’re okay being on the north side and possibly doing some updates.
• Newer Developments (Escena & Miralon): Not everything in Palm Springs is mid-century; there are contemporary options too. Escena is a gated golf community on the northeast edge of town, known for its sleek modern architecture and desert landscaping. Homes in Escena were mostly built in the 2010s, featuring clean lines and modern amenities (open concept, high ceilings). They typically list around $800k–$1.2M. Buyers like the newness and the golf course views, but should note Escena has HOAs and some homes sit under the airport flight path (noise can be a consideration). Miralon, on the north side, is one of the largest master-planned projects in the city. Built on a former golf course, Miralon is turning into an “agrihood” community with olive groves, walking trails, and modern home designs. Multiple builders (Lennar, Toll Brothers, etc.) are constructing homes there. Prices for new 3-4 bedroom homes start around $800–900k and go upwards of $1.3M for larger models, with Olea by PLC Communities and Vitality by Lennar among the latest phases. These new homes offer energy efficiency and contemporary style, appealing to buyers who prefer turnkey new construction over vintage charm. As of 2025, Miralon is actively selling and has already added hundreds of homes – it’s the place to buy for a brand-new home in Palm Springs, according to its developers.
• Condo Communities: Palm Springs also has a rich inventory of condominiums, many in low-slung mid-century modern complexes or 1970s Spanish style resorts. Areas like South Palm Springs (e.g. Canyon View, Seven Lakes CC, Mesquite CC) are dotted with condo developments popular with retirees and second-home owners. Prices can range from ~$300k for a smaller 1BR unit to $600k+ for a large updated 3BR condo with a view. Condos provide a lower-maintenance alternative to a house – HOAs cover landscaping and pools – but watch for HOA fees which can be several hundred dollars monthly, affecting affordability. Condo buyers also need to heed the city’s rental rules, as Palm Springs prohibits rentals shorter than 28 days in many condo complexes unless they have grandfathered hotel licenses. So, those aiming to Airbnb a condo must choose carefully or look to places like Palm Desert or Cathedral City which have different rules.

In sum, Palm Springs offers everything from multi-million-dollar estates to $500k fixer-uppers. Neighborhood choice often comes down to whether one prioritizes prestige and walkability (central and south areas), affordability (north areas), or modern conveniences (new developments). Each pocket of the city has a unique personality, but all share the backdrop of mountain vistas and that unmistakable Palm Springs vibe.

Commercial Real Estate & Development

While residential real estate cooled slightly in 2025, commercial real estate in Palm Springs has been active, buoyed by a strong tourism rebound and city-led development initiatives. The commercial sector here is dominated by hospitality, retail, and leisure – befitting a resort destination – with a smaller footprint of office and industrial spaces. Here’s a look at key trends:

Hospitality & Tourism Properties: Palm Springs’ hotel industry is thriving on the back of robust visitor numbers. In 2024 the Palm Springs International Airport served a record 3.2 million passengers palmspringsca.gov, and that momentum carried into 2025 with increased flights and traveler demand. Hotel occupancy has been healthy, especially on weekends and during events. Recognizing this, developers have added new hotel inventory:

• The Thompson Palm Springs, a luxury 168-room boutique hotel by Hyatt, opened downtown in late 2024. This high-end property (featuring rooftop bars and designer interiors) was highly anticipated and speaks to confidence in the upscale tourism market. Its successful debut suggests continued appetite for modern, experiential hotels in the city center.
• Other hotel projects are in various stages: plans for an Andaz Hotel and a Virgin Hotel in downtown were previously announced, though timelines have shifted. Additionally, boutique hotel renovations are ongoing – e.g. the historic Twin Palms Resort got a refresh. Each new opening not only boosts room supply but often activates surrounding retail and dining.

The short-term vacation rental segment is effectively part of the hospitality market, as noted earlier. Palm Springs actively manages this sector via permits and enforcement, which has allowed STRs to coexist with hotels. Both are needed: during peak events like Coachella or Modernism Week, virtually all lodging in the valley (hotel or home) sells out. This synergy means commercial investors remain interested in acquiring small inns or apartment complexes that can be legally operated as vacation rentals. In fact, boutique “hotel-house” concepts (where a cluster of villas operate like a hotel with concierge, etc.) have sprung up, blending residential and hospitality real estate. The city generally supports such uses if they fit neighborhood rules, since tourism is the economic lifeblood.

Retail & Dining: Retail in Palm Springs is largely centered on the downtown Palm Canyon Drive corridor and adjacent streets. As of 2025, foot traffic downtown is strong, thanks to a steady stream of tourists and the growing full-time population. The city’s revitalized downtown (revamped over the last decade with new outdoor shopping plazas, restaurants, and a public park) has seen most storefronts filled. Key developments:

• The prime downtown retail hub on Palm Canyon (near the Rowan Hotel and new museum plaza) has drawn national brands like West Elm and unique local boutiques. Vacancy rates downtown are relatively low. Rents have increased post-redevelopment, but many businesses report stable sales due to tourist spending.
• Restaurants are a big part of Palm Springs real estate. The city’s culinary scene has exploded, with trendy eateries and bars opening each season. Commercial spaces that offer outdoor patio seating or rooftop views are in high demand. For example, the rooftop bar scene at places like Tommy Bahama’s and the Kimpton Rowan draws crowds, and new concepts are vying for any available space. For investors, well-located restaurant properties are attractive, though they come with the usual risks of the F&B industry.
• Seasonality does affect retail – summer brings a dip in patronage as tourism lulls and many locals travel. Some shops shorten hours or temporarily close in the hottest months. Landlords and business owners factor this in, with many striking lease structures that account for seasonal cash flow. Despite the heat, events like Splash House (summer pool music festival) now draw younger visitors even in summer, helping soften the usual dip.

Office Space: Palm Springs is not an office-centric market. The few office buildings in downtown mainly host local professional services (attorneys, doctors, real estate brokers). There has been minimal new office construction; demand for traditional office leases is limited given the city’s small corporate presence. Even some existing office spaces have been converted to other uses (e.g., co-working hubs, wellness clinics, or residential lofts). Remote work trends mean professionals here often work from home or shared spaces rather than dedicated offices. Coworking venues like WeWork haven’t proliferated, but a couple of local co-work spots exist to serve remote workers and entrepreneurs. The outlook for office is relatively flat – no major changes expected, and any new mixed-use developments likely emphasize retail/resort components over pure office.

Industrial & Warehouse: Historically, Palm Springs had very little industrial real estate – the Coachella Valley’s warehouse/distribution activity was concentrated nearer to the I-10 freeway in cities like Indio or at the outskirts. However, 2025 brought a significant development: the Palm Springs Planning Commission approved a massive warehouse project for the north end of the city. This project, by First Industrial Realty, will create two large warehouse buildings totaling ~2 million square feet on a 96-acre site near N. Indian Canyon Dr. and I-10. It’s slated to begin construction after final approvals and could complete around 2029.

This approval is a game-changer for Palm Springs’ commercial landscape. Once built, it will bring an estimated 750 jobs in logistics and operations, diversifying an economy that’s been largely service-oriented. City officials cited the need for tax revenue and year-round employment – the project could generate ~$2 million annually in city tax revenue, helping fund public services. In pushing it through, the city acknowledged environmental concerns (traffic, air quality) but decided the economic benefits were paramount. For developers, this indicates Palm Springs is open to industrial projects in certain areas (particularly its northern fringe). It may pave the way for additional warehousing or light industrial uses along the I-10 corridor, leveraging the transportation link.

Development & Infrastructure Projects: Palm Springs in 2025 is not resting on its laurels; several major developments and infrastructure upgrades are either recently completed or on the horizon:

• Agua Caliente Cultural Plaza: Opened in late 2023 in downtown, this 5.8-acre complex (built by the Agua Caliente Band of Cahuilla Indians) features a world-class museum, spa, and gathering plaza celebrating native culture palmspringslife.com. It earned a spot on Time’s “World’s Greatest Places 2024” list and has quickly become a cultural and tourist landmark. By 2025, its presence is boosting downtown foot traffic, spurring nearby businesses (restaurants, galleries) and enhancing the overall appeal of downtown real estate.
• Airport Expansion: The Palm Springs International Airport (PSP) is charting a bold expansion. In January 2025 the City Council unanimously approved a new Airport Master Plan concept, which includes adding a new North Concourse with 7 additional gates, a multi-level rental car center, a Federal Inspection Station for international arrivals, and expanded baggage facilities kesq.com. This multi-phase project, estimated at $2+ billion investment, will roll out over the coming decade. Construction on the first phase is expected to start by 2028 and complete in the early 2030s kesq.com. While the benefits are longer-term, the commitment to expand signals confidence in sustained tourism growth. For the real estate market, a larger airport with international flights could mean more visitors (good for hospitality and rentals) and improved connectivity (a boon for second-home owners and remote workers flying in and out). Neighborhoods near the airport may also see ancillary development or higher values as the area modernizes (though noise considerations remain).
• CV Link Pathway: A transformative regional infrastructure project, CV Link, is nearing fruition. This 40-mile multi-use pathway will connect Palm Springs to Coachella along the valley floor, providing a safe route for cyclists, pedestrians, and low-speed electric vehicles. By fall 2025, the segment linking Palm Springs was slated to open, representing a new recreational amenity for residents. In Palm Springs, CV Link runs near the Whitewater wash and through parts of the city, effectively creating park-like trails. This can have subtle positive impacts on adjacent property values and makes the area more attractive to outdoor enthusiasts. It is a selling point for new developments touting access to the trail for biking or golf cart commutes.
• Downtown & Entertainment Developments: The city continues to invest in its downtown core. Discussions are underway about a possible Convention Center renovation or expansion, as officials note the facility needs upgrades to stay competitive and attract more events. Though not finalized, future improvements could draw larger conventions, further boosting tourism in off-peak seasons. Also, new entertainment venues are being proposed – e.g., there’s buzz about a boutique movie theater reopening (the historic Plaza Theatre renovation is one such project in progress). Palm Springs thrives on culture, so these projects enhance the city’s year-round vibrancy, indirectly supporting surrounding hotel and retail real estate.
• Residential Developments: On the residential construction front, beyond Miralon and Escena, there are notable efforts in affordable and workforce housing. Aloe Palm Canyon, a 71-unit affordable senior apartment complex on N. Palm Canyon Drive, broke ground and began leasing in 2025 engagepalmsprings.com. This project provides much-needed housing for low-income seniors (with units reserved for those 55+ at various income levels) engagepalmsprings.com. While modest in scale, it reflects the city’s push to address housing affordability. Additionally, several small-scale infill projects (new townhomes or apartment buildings) are in planning to cater to local workers who often get priced out of the housing market. For developers, the city is signaling openness to creative solutions that add inventory, especially if they align with community needs.
• Regional Mega-Projects: Just outside Palm Springs, big projects can influence the local market. For example, in Rancho Mirage (20 minutes away), Disney’s Cotino – a 600+ acre “storyliving” community with a massive lagoon – is under construction and generating buzz coastline840.com. Though not in Palm Springs proper, Cotino’s Disney brand and resort-style living concept is drawing luxury buyers’ attention to the Coachella Valley. Such high-profile developments raise the region’s profile and may create spillover demand for Palm Springs homes as people explore the area. Similarly, the Acrisure Arena (opened in late 2022 near Palm Desert) has made the valley a year-round sports and concert destination, which supports hospitality and could encourage more year-round residency (some people move here to be near the new hockey team or concert scene). All these elements tie into a broader growth narrative for the Coachella Valley through 2028.

2026–2028 Market Outlook & Forecast

Looking ahead, the Palm Springs real estate market is poised for steady, measured growth rather than wild swings. Barring any major economic shock, most analysts foresee a moderately positive outlook for the next few years:

Home Price Forecast: After the essentially flat/slightly down year of 2024–25, home prices in Palm Springs are expected to resume gentle appreciation by 2026. Industry forecasts suggest low single-digit annual gains (~2–5% per year) from 2026 through 2028, which would slightly outpace inflation and align with historical norms. This uptick is predicated on mortgage interest rates gradually easing. If 30-year rates drift down into the mid-5% range by 2026 (as some expect if inflation subsides), buyer demand could noticeably increase, putting upward pressure on prices. Indeed, local data from mid-2025 showed a potentially important trend: home sales were starting to outnumber new listings, indicating that pent-up demand might be returning. Should that continue, Palm Springs could tilt back toward a seller’s market in late 2025 or 2026, causing prices to firm up again.

That said, any price growth will likely be measured. Today’s buyers are much more price-sensitive with higher mortgage costs, and the feeding frenzy psychology is gone. We anticipate a more sustainable growth trajectory. By 2028, median prices might be, for example, ~10–15% higher than 2025 levels if trends hold. It’s also likely we’ll see differentiation by segment: the mid-market and luxury segments may appreciate faster (due to limited supply of desirable homes and high-income buyers returning), whereas entry-level condos might stay more level if interest rates remain a barrier for first-timers.

Sales Volume & Inventory: Home sales volume is projected to pick up through 2026–27 as more buyers adjust to the new normal of 6% mortgages (or benefit from slight rate drops). Demographic trends support housing demand – many younger retirees (the youngest baby boomers and Gen-X) will be entering the market for second homes or retirement homes over the next 5-10 years, and Palm Springs is squarely on their radar. Additionally, international buyers (e.g. Canadians) could make a bigger comeback by 2026 if currency exchange rates improve, adding to demand for vacation properties. On the supply side, inventory might actually increase in the near term (2025–26) as the market has shifted in favor of buyers – some owners who were holding off may finally list their homes now that the pandemic price surge has leveled. Also, new construction in places like Miralon will continue to add homes to the market annually. But by 2027–28, if sales outpace listings, inventory could tighten again, bringing the market back toward equilibrium or even slight seller’s advantage.

Notably, Palm Springs has natural constraints on supply: the city is bounded by mountains and tribal lands, and it’s mostly built-out aside from some north-end tracts. There is not endless land for sprawling new subdivisions (unlike some Sunbelt cities). So, a chronic shortage of buildable land means long-term supply growth is limited, which underpins home values. Most new development will be infill or higher density, which won’t flood the market. If demand accelerates, we could see multiple-offer situations return for the most coveted properties by 2027.

Rising Construction & Development: The late 2020s should see some major projects reach fruition. By 2027, the new Palm Springs Surf Club (a surf wave park) may finally open on the site of the old water park, adding a unique attraction. The College of the Desert is aiming to open its West Valley campus in Palm Springs by 2027, which could spur academic and student housing needs. And as mentioned, the airport expansion will likely be under construction, the huge warehouse complex will be mid-build, and possibly a convention center upgrade could break ground if funded. Each of these will create construction jobs and, once completed, enhance the city’s infrastructure – making Palm Springs even more accessible and economically diverse. For commercial real estate, one might foresee:

• More hotel development or renovations around 2026–28 to meet the growing visitor volume. (E.g., downtown might see another boutique hotel or two proposed, and existing resorts in the valley might expand).
• Industrial growth continuing in north Palm Springs – if the initial 2M sq.ft. fills up with tenants successfully, it could encourage additional logistics or light manufacturing facilities in that corridor. By 2028, Palm Springs could have a small but thriving industrial park, which was unimaginable a few years ago.
• Retail & entertainment spaces evolving – perhaps a new high-end shopping pavilion or additional nightlife venues as the population of full-time residents inches up. The city may also repurpose some spaces (if, for instance, the office sector stays soft, some older office buildings might be converted to residential or mixed-use by 2028).

Opportunities and Risks: For prospective homebuyers, investors, and developers, the outlook carries both promise and caution:

• Homebuyers (Opportunities): The next year or two (2025–26) may actually be an excellent window for buyers. The market is more negotiable now than it has been in years. Buyers with stable finances can take their time, shop a wider selection, and possibly score a home at a slight discount versus last year’s peak pricing. If mortgage rates dip in the future, refinancing could further improve their position. New developments also present opportunities – buying a pre-construction home in a community like Miralon could yield equity gains by completion. Additionally, homes with strong rental potential acquired now could lock in current prices and then benefit from revived tourism growth in coming years. For those planning retirement, getting into the market before prices resume an upward march might save money. The risk for buyers is if interest rates stay high or climb, which would keep pressure on affordability (though that could also hold prices down). There’s also always the wildcard of an economic recession; a severe downturn in 2026, for example, could temporarily soften prices further. But given the long-term desirability of Palm Springs, most dips would likely be short-lived.
• Real Estate Investors (Opportunities): Palm Springs will likely remain a solid bet for investment properties. The vacation rental economy shows no sign of disappearing – tourists crave the space and authenticity of rental homes, and events aren’t getting any smaller (if anything, more events are being added). With the city’s STR regulations now well-established and enforcement in place palmspringslife.com palmspringslife.com, savvy investors who play by the rules can generate strong income. A mid-range pool home can gross significant rental income during high season. Over the next few years, as travel continues to grow, these returns should persist. Moreover, the relative lull in the market now means investors might negotiate better acquisition prices or terms (owner financing, etc.). Fix-and-flip opportunities should also improve – with more listings and longer DOM, investors can find dated properties to renovate. Palm Springs’ unique architecture means well-executed remodels (restoring that “Desert Modernism” flair) often fetch a premium upon resale. Looking to commercial, investors may eye small hotels or apartment complexes as boutique hospitality continues to trend. Risks: Investors must heed regulatory risk – any sudden change in city policy on short-term rentals (like a tighter cap on permits or new neighborhood bans) could affect revenue models. Also, rising home insurance costs in California and concerns about climate (extreme heat, water availability) could add expenses or deter some renters in the far future. Finally, competition is notable: many investors are in this market, so cap rates on turnkey rentals are not very high at purchase; the play is often long-term appreciation and lifestyle use.
• Developers & Builders (Opportunities): The outlook from 2026–2028 appears encouraging for developers, especially those who can align projects with the city’s needs. Palm Springs officials have shown willingness to greenlight projects that diversify the economy or address housing shortfalls – the approval of the large warehouse despite objections and funding support for affordable housing illustrate this. Developers who propose mixed-use projects downtown, additional hospitality venues, or workforce housing might find a receptive city government. The population of the valley is growing, and Palm Springs proper could use more modern condos/townhomes for middle-income residents who currently rent. Also, sustainable building is in demand: homes with solar power, drought-tolerant landscaping, and energy-efficient design sell well (and may benefit from California’s green building incentives). There’s room for innovation, too – concepts like co-living spaces or wellness-focused communities could find a niche in this health-and-leisure oriented market. Risks for developers include high construction costs and financing costs in the near term (interest rates for construction loans are high now). Labor shortages in the region can also challenge project timelines (though projects like the warehouse promise to keep construction workers employed locally). Additionally, community resistance is a factor – any development seen as threatening the environment or the city’s character can face pushback (the warehouse faced vocal opposition from residents on environmental grounds). Navigating Palm Springs’ architectural review process can be strict, as the city values aesthetics and historical preservation.

Broader Economic and Climate Considerations: No outlook would be complete without acknowledging the larger context. If the U.S. economy encounters turbulence (a recession in 2025–26), the second-home market in places like Palm Springs would feel it – sales might slow further as discretionary purchases are deferred. However, even during the 2020 COVID recession, the housing market here rebounded quickly due to unique demand factors. California’s statewide housing shortage also undergirds values; Palm Springs is comparatively affordable by California standards, which gives it a floor as people seek alternatives to Los Angeles or Orange County pricing.

Climate change is a longer-term wildcard. The Coachella Valley faces rising temperatures and drought concerns. Summers could become even hotter by 2028, which might slightly dampen year-round residency appeal (for instance, some younger buyers might favor coastal areas to avoid extreme heat). Water availability is another concern – the region draws water from aquifers and the Colorado River, both under pressure. The city and local water agencies are actively promoting conservation (e.g., replacing lawns with desert landscaping, as many have already done). By the late 2020s, new developments will likely need to be very water-efficient and possibly include more self-sustaining measures. While these factors don’t yet impact real estate prices directly, they’re something prudent buyers consider, especially for long-term investment. So far, Palm Springs has mitigated these issues well (e.g., ample solar energy adoption, stringent pool and irrigation rules during droughts), and it remains a highly desirable place to live – but vigilance is needed to keep it that way.

Conclusion

In summary, Palm Springs in 2025 has transitioned to a healthier, more balanced real estate market after the meteoric rises of the early 2020s. Buyers can finally catch their breath and find opportunities, while sellers who price smartly can still achieve strong results. The city’s unique allure – a mix of resort lifestyle, cultural richness, and mid-century charm – continues to draw a broad spectrum of home seekers from retirees to remote workers coastline840.com coastline840.com.

On the commercial side, tourism and hospitality are leading the charge, with new hotels and attractions cementing the city’s status as a year-round destination. At the same time, strategic developments (from warehouses to academic campuses) are laying the groundwork for economic diversification, which bodes well for the region’s stability.

Looking ahead to 2026–2028, Palm Springs’ real estate outlook is cautiously optimistic. We expect gradual price appreciation and robust demand driven by lifestyle buyers. Infrastructure improvements like the airport expansion and CV Link will enhance connectivity and quality of life, likely boosting real estate in the process kesq.com. Investors will find that the fundamentals – limited supply, enduring vacation appeal, and an investment-friendly environment – make this desert market a worthwhile bet, provided they stay mindful of regulatory and climate trends. For developers, opportunities to shape the next chapter of Palm Springs await, especially for projects that respect the city’s character while addressing its needs.

In a nutshell, Palm Springs real estate remains a bright spot in Southern California – an oasis of both relaxation and investment potential. As one local expert put it, despite the fluctuations, the desert’s “long-term value” endures thanks to its strong vacation rental economy, iconic architecture, and leisure-meets-luxury lifestyle. The coming years will likely reinforce that narrative. Whether you’re a homebuyer dreaming of a poolside retreat, an investor eyeing rental income, or a developer envisioning the next resort community, Palm Springs offers plenty of sunshine – and opportunity – on the horizon.

Sources:

1. Glen Nadeau, Modern Living Palm Springs – June 2025 Market Update (inventory, prices, luxury market stability).
2. Palm Springs Post – Housing market shifts as sales drop, inventory climbs (Desert Housing Report, Q2 2025 data).
3. Will Cook Group – Summer 2025 Market Update (buyer’s market conditions, inventory up ~30%, negotiation trends).
4. Paul Kaplan Group – Moving to Palm Springs in 2025 (market balanced after 2021–23 frenzy, median prices mid-$700Ks, neighborhood insights).
5. Coastline 840 – 2025 Desert Luxury Buyer’s Guide (buyer demographics: retirees, remote workers, seasonal residents, investors) coastline840.com, (seasonality and STR regulations advice) coastline840.com.
6. Palm Springs Life (Vision) – Short-Term Rentals Impact on Tourism (STRs generate ~$1B economic impact, ~19,000 hotel rooms in Coachella Valley) palmspringslife.com palmspringslife.com.
7. Palm Springs Life – 16 Developments Shaping Coachella Valley (Agua Caliente Cultural Plaza opened 2023, named world’s greatest places 2024) palmspringslife.com.
8. Palm Springs Planning Commission – Warehouse Project Approval (2M sq.ft. First Industrial warehouses, 750 jobs, completion ~2029).
9. KESQ News – Airport Master Plan Approved (PSP expansion: +7 gates, rental car center, Federal inspection station for international flights, phase one by early 2030s) kesq.com.