Palm Springs home prices drop 3.8% while valley-wide inventory surges

Palm Springs experienced the greatest price decline of any valley city in April, with the median price for an average-sized detached home dropping to $1.32 million, down about 3.8% compared to last year, according to the latest Desert Housing Report.

The report reveals contrasting trends across the region, as the valley-wide median home price increased for the sixth straight month to $725,000, even as individual markets like Palm Springs saw decreases.

Housing inventory has increased significantly throughout the valley, with 3,799 units available as of May 1 — representing 1,349 more units than the same time last year. Palm Springs leads the valley in available inventory, with 872 homes for sale as of May 1, compared to 630 last year.

The report notes that seasonal patterns suggest inventory could hit its peak this month, as the desert operates as a seasonal market where median prices typically reach seasonal highs in April or May and drop to lows during fall and winter months.

Despite the price decline, homes in Palm Springs remain the second fastest selling in the valley, with an average of 45 days on the market.

Valley-wide, home prices have maintained the gains made during the pandemic, according to the report. However, lower sales combined with increased inventory mean supply is beginning to exceed demand.

“This should not cause a problem for home prices unless it begins to extend average selling times,” the report notes.

The report indicates that while inventory has recovered to pre-pandemic levels, market conditions point to a need for intervention. “The housing market needs lower mortgage rates,” the report said.

Federal Reserve officials have indicated the possibility of only one rate adjustment this year, and if one were to come, it would be sometime in the fall, despite temporary adjustments to tariffs and slowed inflation.

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