11 Apr Coachella Valley Spotlight
Beyond Festivals and Resorts
Over the next two weekends, Coachella Valley will welcome masses of young revelers along with celebrities, influencers, and music lovers, all descending on the area to enjoy the annual Coachella Valley Music and Arts Festival. The area is widely known for being a warm and dusty playground for thousands to party to the sounds of dozens of top artists, but we know our neighboring desert cities also offer a backdrop for relaxed and cultured living. In honor of this year’s festival, we’re taking a look at the area’s distinctive culture, its growing popularity, and the impact on the local real estate market.
Coachella Valley visitors seek out the locale for its mild winter climate, natural beauty, an abundance of activities, and high-profile annual events. Most months of the year, Palm Springs, and its surrounding areas attract throngs of visitors seeking solace and sun. With ample resorts, activities, shopping, and restaurants, Palm Springs serves as an idyllic setting for girls’ getaways, golf trips, romantic weekends away, and quality family time.
Coachella and its country counterpart Stagecoach each draw hundreds of thousands of people to the area every spring. Smaller more exclusive events such as Modernism Week and the Palm Springs International Film Festival bring in crowds of influencers that shine a spotlight on the area’s colorful style and laidback lifestyle. To celebrate Modernism Week, we featured some of the iconic mid-century modern architecture examples found throughout Palm Springs on our Instagram page, hover over the images below to learn more.
Part-Time Desert Living
When we look past the glamorous resorts, sprawling golf courses, and extravagant annual events, we find that residents call the California Desert home (at least for part of the year). Without a strong job market and being too far removed for a daily commute to city centers, the location isn’t ideal for most families. The 60-mile drive to Riverside with traffic can be well over an hour, while drive times into Los Angeles upwards of three hours are not uncommon.
The desert does offer some reprieve from California’s high housing prices. According to Zillow, the median home price in the Coachella Valley is $250,000. While that number is $423,990 in Riverside, and in Los Angeles, it is $750,000. However, the lack of jobs and summer heat make the destination a part-time home for most. The majority of residents and property owners are retirees, snowbirds, and those who own second homes. The median age in Palm Springs is almost 54. For comparison, the median age in Los Angeles is close to 37.
These demographics may change in the future as residents seek affordable housing outside of typical areas. As working remotely becomes increasingly popular, we may also see a younger workforce considering buying where their dollar stretches further.
Many older residents choose to purchase within lavish active-adult communities where they can enjoy a well-appointed home alongside top recreational amenities and social activities. Palm Springs is especially popular among Canadians, with many flocking to the warm climate for almost half of the year (if a snowbird spends more than 182 days in the U.S. they are considered a resident and are subject to U.S. taxes). Low home prices and a strong Canadian dollar allowed many of our northern neighbors to purchase during the Great Recession. As the exchange rate evens out, overall Canadian spending in the U.S. is down slightly, but they are still enjoying their California winter homes.
Desert Real Estate On The Rise
Although growth has been slower in the desert than in other parts of Southern California, the real estate market has improved as the area has gained popularity.
In 2017, the market showed positive trends with more units closed at higher sales prices. Inventory also decreased, as did average days on the market. Inventory dropped at least 10 percent last year in Palm Desert, Palm Springs, La Quinta, Rancho Mirage, Joshua Tree, Indian Wells, and Cathedral City.
With an increase in tourist activity, we would expect a surge in rental property investments, but this segment is lagging due to the uncertainty of short-term rental legislation.
With an eclectic mix of residents, there is no denying that there is room for growth and we’re seeing development to accommodate the demand. Large-scale master-planned communities are planned in Palm Springs and Indio along with several smaller residential developments that will bring new residences to the area.