Mortgages soar along with home prices
Homes in Palm Springs, such as these at Miralon, are selling as fast as they're being built.

Mortgages soar along with home prices

Got 20% down and perfect credit? You'll spend about $6,000 for a mortgage on the average-size home selling in Palm Springs. And that's before taxes, insurance, and possible HOA fees.

Kendall Balchan image

Kendall Balchan

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May 9, 2022

Another month, another housing report from the Greater Palm Springs Realtors (GPSR), and the news is familiar: Prices are up, and inventory is down. But with mortgage rates climbing, even more people are getting priced out of homeownership throughout the Coachella Valley.

Driving the news: Mortgage rates are now over 5%, and home prices in Palm Springs are up about 40% year-over-year.

  • In April 2022, data shows the average-sized home in Palm Springs sold for $1.4 million. In April 2021, the average-sized home here sold for just over $1 million.

Playing with a mortgage calculator gets really depressing, really fast.

  • If you’re putting 20% down and have perfect credit, your monthly payment on the average Palm Springs home sold last month — before taxes, insurance, and possible HOA fees — would be about $6,000 at current mortgage rates.

  • Last April, with the average-sized home in the city selling at the $1 million price point and interest rates near 3%, your mortgage payment would have been about $3,400 a month.

Paying a premium: If you can find a home, don’t put much faith in the sticker price. The GPSR data shows those successfully landing offers in Palm Springs paid 5.2% over asking for a detached home and 4.2% above asking for condos, townhomes, and other attached dwellings. 

  • More than half (55.5%) of all homes sold in the Coachella Valley sold above list price last month. That’s the highest percentage in history.
     
    • Last year at this time, about 32% of homes were selling above asking. In a typical year? That percentage should be at 10%.

What else? Consider the following:

  • Across the entire Coachella Valley, the median price of an average single-family home continued to rise — averaging $670,500 in April — a gain of 19.8% over April 2021.

    • Compared to two years ago, the average price is up an “astonishing” 52%.

  • Condominium and townhome prices in the Valley also continued to increase, with an average sale price of $479,450 — a rise of 37% from a year ago and 60% from two years ago.

Supply-side: On May 1, there were 859 units available to purchase in the Valley, which is 149 units more than last year.

Demand-side: Homes in Palm Springs are on the market for about two weeks before being purchased, compared to 27 days last year.

Looking ahead: It’s not all doom and gloom. Realtors say they are “somewhat encouraged” by the slight increase in inventory over the past two months.

  • Yes, but: “We are still far below normal ratios of three and four months and these low ratios point to continuing upward pressure on home prices.”

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