The Palm Springs Luxury Real Estate Market Report

The high end real estate market often operates to the beat of its own drum, ignoring the sensibilities of the medium and low-end markets. This, perhaps obviously, is a consequence of the disposable income of that market segment.

While the real estate market as a whole has taken a beating, especially California cities, Palm Springs has been able to remain relatively stable. In fact, home sale prices have been steadily moving up from 2004. While this sounds great, it has a downside. With a high volume of houses for sale, buyers can be selective about the properties they invest in. If realtors won’t budge on price, it increases the sales time and therefore lowers sales forecasts. Coachella Valley experienced a 21.5% decrease in home sales over the course of this last year. Overall, home sales have decreased 46% since 2005.

In 2004, it took only 57 days for a single family home to sell. Now, in 2008, the average selling time is up to 114 days on the market. This kind of trending follows for the entirety of the Coachella Valley and California at large. The average time on market for a California house is up to 56 days. Relative to the Palm Springs 2004 average, this seems like strange data. But you have to take into account that Palm Springs is a luxury market where the average sales cycle is longer than the rest of the industry. This combined with the fact that existing home sales are down 24.5% from a year ago, and you get a better idea of the problem.

Lets get back to interesting twists and turns of the luxury market. Very recently, one of Richard Neutra’s masterpieces sold for $15 million. Now remember a moment ago we discussed the fact that the market is depressed, but doesn’t seem to be affecting the high end? Around the $5 million dollar mark we start to lose a grip on reality. Christie’s was disappointed by the ‘low’ $15 million dollar bid, expecting to net upwards of $25 million. But, so it goes.

Interested in buying or selling a home in the Coachella Valley area? Contact Patrick Stewart Properties.