Palm Springs is shifting, but it hasn’t lost its pull. Buyers, investors, and second-home owners are still coming, each chasing a version of desert life that fits their needs. The difference is in how they’re approaching the market.
In 2025, the market cooled. The average home value fell 5.5%, landing around $623,753, and homes stayed on the market longer, about 71 days on average, according to Zillow. Out-of-state buyers kept looking, while inventory rose just enough to balance demand.
This is a reset. One shaped by comfort, smart design, and long-term value.
At Coachella Valley Property Management, we see it every day. Owners renovating rentals, investors weighing opportunities, and newcomers looking for space, sun, and a slower pace.
Here’s what’s driving Palm Springs real estate trends in 2026 and why the desert market still runs hot.
Key Takeaways
- After dipping 5.5% in 2025, home prices are expected to climb about 3.6% in 2026, with the average sitting near $623K. Listings could rise roughly 10%, giving buyers a bit more choice.
- More buyers from L.A., San Francisco, and Arizona want space, sun, and mid-century design. Many use their homes part-time or as short-term rentals instead of renting long-term.
- With short-term rentals now capped at 26 days a year and mortgage rates hovering near 6%, investors are getting practical, focusing on steady income, smart upgrades, and long-term value.
Market Snapshot: Palm Springs in 2026
The market is leveling out. Based on the California Association of Realtors' 2026 forecast, median prices are set to rise about 3.6% in 2026, after a 1% gain in 2025. Palm Springs is likely to follow, with values moving up slowly.
Inventory is starting to open up. Listings may grow 10%, giving buyers more choices and easing the tight market of recent years.
On the other hand, out-of-state buyers will still lead. They would be looking for lifestyle homes and rental opportunities. Local buyers would be pickier, favoring turnkey homes with energy-efficient updates. New builds and updated mid-century homes will sell fast. Older, unrenovated homes will move more slowly.
Overall, Palm Springs real estate trends would be steady. Prices are creeping up, inventory is improving, and smart buyers focus on location, quality, and long-term value.
Driver #1. Lifestyle Migration and Second-Home Buyers
Remote work stuck. So did the dream of owning in Palm Springs. Buyers from L.A., San Francisco, and other states are trading traffic for sunlight. They’re after space, design, quiet, and innovative lease terms. Modern builds and mid-century homes will be the top picks.
Expect more homes to be used part-time, more short-term rentals, and fewer long-term leases. Prices follow the pattern with a steady climb and fewer bargains.
Highlights: Remote work drives buyers to Palm Springs, favoring modern and mid-century homes for part-time living and short-term rentals.
Driver #2. Sustainability and Smart Homes
The city’s going green fast. Builders are adding solar, drought-friendly yards, and EV hookups. New codes push efficiency. And buyers like it with its fewer maintenance features and lower bills.
California’s 2030 Energy Plan: Smart, Sustainable Homes
California aims to get 60% of its electricity from renewable sources by 2030 and achieve 100% clean, zero-carbon electricity by 2045, according to the California Energy Commission. In Palm Springs, that shows up as solar panels, energy-saving setups, and yards that use less water. This means lower bills, less upkeep, and homes that just work.
Highlights: Eco-friendly homes now define many Palm Springs real estate trends, especially on the luxury end.
Driver #3. Short-Term Rentals and Tourism
Tourism drives Palm Springs, and short-term rentals (STRs) play a big role. The rules are changing, though.
Starting January 2026, homes can only be rented 26 days a year, down from 36. STRs are also limited to 20% of homes in each neighborhood. That means fewer permits for new rentals and stricter rules for current ones.
In addition to this, owners also need a Vacation Rental Registration Certificate and a Transient Occupancy Tax (TOT) permit, pass a safety check, prove ownership, have liability insurance, and have a 24/7 local contact.
Highlights: STRs can still make money, but success now depends on following the rules and staying flexible. Those who adapt to these market changes will have the advantage.
Driver #4. New Developments and Neighborhood Growth
Palm Springs real estate trends in 2026 mix new builds with classic mid-century charm.
North Palm Springs and Cathedral City’s Modern Homes
New construction is picking up in North Palm Springs and Cathedral City. Single residential houses and townhomes are energy-efficient and aimed at younger buyers. Communities like The Collection at Campanile also offer modern layouts from 2,400 to 2,900 sq. ft.
Deepwell and Twin Palms’ Mid-Century Comeback
Deepwell and Twin Palms are seeing a revival. Mid-century homes are getting restored, pools updated, and interiors modernized. Modernism Week keeps the neighborhood’s architectural roots alive.
Highlights: New builds plus mid-century updates keep Palm Springs’ market lively and attractive to a range of buyers.
Driver #5. Rates, Inflation, and Investment Shifts
Rates have finally cooled off after the 2023 spike, but borrowing isn’t cheap yet. According to Mortgage Professional America (MPA), Fannie Mae expects mortgage rates to land around 6% by the end of 2026, down slightly from 6.2% in 2025.
Inflation’s also easing up. Most forecasts put it back in the 2–3% range by 2026, which means prices aren’t climbing as fast. That’s helping steady the housing side of things.
However, investors still like Palm Springs. Rents are holding up, and the area’s limited housing supply keeps prices from sliding. Nationwide, new apartment builds are expected to slow to about 414,000 units in 2026, according to RCLCO.
With coastal markets staying pricey, more buyers are heading inland. Palm Springs hits that sweet spot with still California, but not L.A. expensive. The National Association of Realtors expects home prices to rise roughly 4% in 2026, and existing home sales could jump 14% after a slower 2025.
Highlights: The mindset is different for Palm Springs real estate trends in 2026. Investors are playing the long game with steady rents, solid tourism, and a market that still feels like a good bet.
So, what does this mean for owners and investors?
Palm Springs still has room to grow, but it pays to be smart and realistic about where you put your money.
Opportunities:
- Homes in good spots with modern or eco upgrades tend to hold value better. People like lower bills and less upkeep, and they’ll pay a bit more for it.
- Short-term rentals (STRs) still make sense, especially during festival season and winter. Just keep everything legal, as city fines can wipe out profits fast.
- Mixing it up helps. A mix of long-term tenants, seasonal STRs, or the occasional flip spreads risk when rates or rules shift.
Risks:
- Overpriced or outdated homes are sitting longer. Buyers are picky and notice when a place feels behind.
- STR rules are getting tighter. New limits or surprise fees could cut into bookings, so keep an eye on city updates.
- Costs are creeping up. Insurance, utilities, and repairs all add up. If you’re not planning for it, your margins can shrink quickly.
FAQs about 2026 Palm Springs Real Estate Trends
Can I transfer a current Vacation Rental permit when I sell the property?
No, Palm Springs ties short-term rental permits to the owner, not the home. If you sell, the buyer needs to apply for a new Vacation Rental Certificate through the city. Rules and fees change now and then, so check before you list. It saves you from delays or surprises later.
What vehicle or parking rules apply for short-term rentals?
Palm Springs keeps parking tight. Rentals must have enough on-site spots for guests, and street parking overnight is a no-go. The limit depends on the home. For example, a three-bedroom usually means three cars. Post reminders at the property so guests don’t miss the rules. It’s easier than dealing with fines.
What taxes or permits must a short-term rental operator in Palm Springs handle?
You’ll need a Vacation Rental Certificate and a Transient Occupancy Tax (TOT) permit. The TOT runs about 12.5% of what you make from bookings, and it’s due monthly. Skip a payment or report, and you risk fines or losing your permit. A lot of owners let property managers handle it so nothing falls through the cracks.
Get Ready and Stay Ahead for the 2026 Palm Springs Market Shift with Coachella Valley Property Management!
Palm Springs is changing fast with new laws, greener homes, and buyers who care more about efficiency and stability. For owners and investors, that means staying alert and knowing when to pivot. The right local team can help you do that without guessing your way through another market cycle.
At Coachella Valley Property Management, we make sure your property stays ahead. Our team knows the Palm Springs market inside out, from seasonal rental swings to new city rules. Here’s what we handle so you don’t have to:
- Full-service rental management — from tenant screening to rent collection
- Compliance and permitting — keeping your property in line with city and STR regulations
- Maintenance and upkeep — reliable local vendors and quick response times
- Market insights and pricing guidance — so you always know where you stand
The 2026 market rewards owners who plan early and act smart. Let’s make sure you’re one of them. Reach out to our Coachella Valley real estate experts today and see how we can help your property earn more, run smoother, and stay future-ready.
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