Palm Springs — once known as a retirement community — is a quiet desert town that’s actually gaining new residents in their 20s, 30s and 40s, according to moveBuddha, census data and Coachella Valley real estate agents. Redfin agent Kimberlee Morgan says that her clients are typically retirees and secondary homeowners, but the area’s atmosphere and housing market is swiftly changing.
While the Palm Springs population has seen a modest 1% increase from April 1, 2020, to July 1, 2021, the cost of housing has soared over the past two years. Zillow says that home prices in Palm Springs have gone up 36.9% over the past year, and according to Redfin, 63.9% of homes were sold over asking price in April.
Part of that, Morgan says, is due to the recent influx of tech workers who are buying up properties.
“During the last two years, it’s been mostly IT and tech workers that were able to work remote,” Morgan says. “They were coming in from Los Angeles, Seattle, San Francisco. Those were like the main huge areas that we were getting.”
For the same amount of money, they could get a nice house with a pool instead of a small, cramped apartment. In San Francisco, the typical home is valued at around $1.6 million; in Palm Springs, it costs just $698,000 — almost a million dollars less.
While Morgan says that some of these tech workers are starting to move back to big cities, they’ve already done a number on the local housing market. When asked whether they’re the reason why prices in the area have skyrocketed more than 30%, she says, “absolutely.”
However, Morgan also maintains that the market is starting to finally cool off compared with the “feeding frenzy” she witnessed in 2020. Prices are dropping, homes are no longer receiving multiple offers, and sellers are having to try a little harder and negotiate.
The same can’t be said about short-term vacation rentals, though. “Those are still in high demand, and a lot of those are being picked up by cash buyers,” she continues.
For now, she says, the “snowbirds” will just have to continue to wait.
SFGATE news director Amy Graff and local editor Tessa McLean contributed to this report.