Are Homes in Palm Springs Overpriced in 2025?
Wondering if Palm Springs home prices are too high in 2025? You're not alone. Whether you’re thinking of buying, selling, or just keeping an eye on the market, there’s a lot happening right now—and not all of it is obvious from the surface-level headlines.
In this post, I’ll break down what’s really going on with Palm Springs real estate and answer the big question:
Are homes in Palm Springs overpriced in 2025?
What’s Driving the Current Market?
At first glance, it may look like Palm Springs is in a bit of a slowdown:
More homes on the market
Frequent price reductions
Properties sitting longer
Listings selling below their original list price
But this isn’t just about interest rates or seasonal cycles - there’s a deeper story here. What we’re seeing is called "inventory rebalancing" by most real estate industry economics but I think of it as asset rebalancing. That is, homeowners moving equity out of one asset class - real estate, into others such as stocks, bonds, crypto, gold, business investments or even cash. It’s happening across three major categories of homeowners. Make no mistake, that the extra inventory we usually don’t see is what is adding to the heightened inventory.
Pandemic-Era Speculators Are Cashing Out
Many buyers rushed into the Palm Springs market in 2020–2021, scooping up homes as prices climbed. Some were looking for second homes, others for investment properties. But quite a few were betting on quick appreciation and flipping in a few years for a profit. Well, those few years are now up.
With price growth having leveled off since 2022, a lot of those owners are choosing to sell. They're hoping to lock in their equity before prices soften further. This is a key reason why we saw rising inventory in 2024 and it is only accelerated into 2025.
Changes to Short-Term Rental Rules
In 2022, Palm Springs tightened its rules for short-term rentals (Airbnb, VRBO, etc.):
Permits do not transfer upon sale
Many neighborhoods are capped out on permits
You're limited to 36 contracts per year
If you were banking on rental income, this changed the math. Many investors have discovered that STR ownership isn't as profitable as they expected—especially if they're buying in neighborhoods with permit restrictions.
As a result, we're seeing more homes hit the market from frustrated Airbnb owners.
💡 Want to know if a property is eligible for a rental permit?
Check the City of Palm Springs Short-Term Rental Portal
Reallocating Wealth: Vacation Homes for Sale
Palm Springs has always been a haven for second or or even third homes. But, as I mentioned above, other asset classes might be offering better returns or at least look more attractive. As a result, some owners are shifting their investments away from real estate and toward more liquid assets.
It’s not unusual to see high-equity homes listed by owners who simply want to cash out while the market is still relatively strong.
But What About Mortgage Rates?
Yes, interest rates have been high lately, but in Palm Springs, that’s often not the biggest factor. Many homes here are sold all-cash, and those who do finance typically have strong banking relationships that give them access to better rates.
Translation: the market isn’t as rate-sensitive as other areas.
Not All Homes Are Created Equal
One of the big takeaways? Desirability matters more than ever.
✅ What buyers are still going after:
Authentic Mid-century modern homes (especially original Alexanders)
High-end new construction
Well-designed architecture and outdoor spaces
❌ What’s struggling:
Poorly remodeled homes
Dated interiors from decades past
Homes priced too aggressively without supporting features
In other words: quality and pricing alignment are key.
🏡 Want to browse handpicked mid-century homes currently for sale?
Visit the MCM Collection at PalmSpringsHouseHunt.com
So… Are Palm Springs Homes Overpriced?
Some are. Some aren't. It really depends on location, condition, and price strategy.
Compared to areas like Los Angeles, Orange County, or San Diego, Palm Springs can still offer strong value, especially for buyers who plan to hold long-term.
But pricing is crucial. Homes that are strategically priced and professionally marketed are still moving. Overpriced homes? Not so much.
My Advice for Buyers
If you’ve always dreamed of owning in Palm Springs, now could be your chance.
📉 It’s currently a buyer’s market
🕵️♂️ There’s plenty of inventory to choose from
💸 Motivated sellers may be open to negotiation
Make sure you work with a local expert who understands where the value is and where it isn't.
📲 Ready to chat about buying? Contact me here and let’s strategize.
My Advice for Sellers
If you don’t need to sell right now, it might make sense to wait.
Yes, I’m a real estate broker telling you not to list your home. But in some cases, that's the best advice I can give.
If you do need to sell:
Price your home competitively from day one
Make sure it's staged and shows well
Work with a pro who knows how to market it properly—especially online
💼 Curious about your home’s value in the current market? Request a free market analysis
Final Thoughts
Palm Springs is still a special place to own real estate—whether for lifestyle, long-term investment, or retirement. But the market in 2025 is more nuanced than in years past.
If you're thinking about buying or selling and want an honest, data-driven perspective, I’d love to help.
Thanks for reading!
And don’t forget to check out the full video for visuals, examples, and additional tips:
🎥 Watch the YouTube episode here with bonus market analysis.