Let the Sun Shine
Palm Springs real estate in four words: tan skin, palm trees, hot weather, and a whole lot of properties. Naturally, as real estate investors, you look for the places you know will bring good tourism, high cash flow, and a location that is to die for. The Palm Springs real estate market may be the U.S. housing market you’ve been looking for.
Join us to go over what it’s like investing in Palm Springs real estate. We even included some of our favorite Mashvisor numbers to let you get a hint of how this U.S. real estate market is looking this year! Read on to get a dose of the Palm Springs sunshine.
So Ya’ Want to Invest in the Desert
Let’s chat more about what you can expect when you decide to invest in the Palm Springs housing market. This is just a baby Palm Springs real estate forecast 2018, not a grown up. Let’s get talking!
Related: Palm Springs Real Estate Market 2018 – Forecast and Overview
Bargains Are Rare
Bargains are unicorns of the Palm Springs real estate. Although the tumbleweeds are rolling in the desert, home prices are escalating quickly. Home values have skyrocketed across the area over the years. In addition to the higher home values, the number of homes for buyers to choose from is much less. This results in prices driving up.
However, the fewer rental property options and big jumps in price aren’t deterring buyers. The Palm Springs Regional Association of Realtors found that the typical house in the greater Coachella Valley area now sells in about 65 days. This is down from nearly 100 days less than two years ago. Improvement, we like an improvement.
Not Just a Retirement Location
Palm Springs real estate has the warm weather and quiet environment which is ideal for older residents. They escape the cold weather and decide to retire in a location where it’s pretty “inactive.” Although older residents still make up a majority of the population in many desert cities, Palm Springs is changing the real estate market trends.
Events like Coachella, Modernism Week and the Palm Springs International Film Festival have allowed Palm Springs to grow into a millennial hub. These are only some of the events that bring a flock of young travelers and social influencers to this Palm Springs desert.
Quick Demographics of the Palm Springs Real Estate Market
We want to give you a little glimpse of Palm Springs real estate demographics.
Population = 47,689
Median Household Income= $47,689
Let’s point out that it’s really coincidental that both the population and household income are the same. Way to go Palm Springs real estate.
Mashvisor knows these numbers don’t tell you too much about investment properties themselves, but it is good to get an idea of the demographics of this U.S. real estate market. That is why we’re giving you our numbers next: that’s where the good stuff is.
Here are some Mashvisor Numbers of the Palm Springs Real Estate Market
- Median Property Price: $459,000
- Median Traditional Rental Income: $1,583
- Median Airbnb Rental Income: $4,503
- Average Traditional Cap Rate: 0.57%
- Average Airbnb Cap Rate: 5.84%
- Average Airbnb Occupancy Rate: 55%
Explaining the Numbers: Dictionary Mode
So let’s go over what we mean by all those terms. Yes, those are your money-making numbers, but what exactly do they translate into? Find out here:
Median Property Price of palm springs real estate market
The median house price is the midway point of all the investment properties sold at market price over a set period, whether it’s monthly, yearly, or quarterly.
This is like saying if there were 100 investment properties sold during a certain month, the median investment property price would be the house price in the middle. So that rental property has 50 property prices above it and 50 property prices below it.
However, don’t mix this up with the mean price, which we all know is the average (adding the sold prices together and then dividing this by the number of sales).
The median price is used instead of the mean mainly because it is a more accurate indicator of the market. With the median property price, it reflects the whole sample being used.
Median Traditional Rental Income of palm springs real estate market
This is the median amount of rental income you’re going to be making off of an investment property. Same idea as the median house price, where there are 50 investment properties with rental incomes above the property, and 50 below it.
With this, we are taking into consideration traditional real estate investment strategies. That is something like apartment buildings, and the ordinary tenant and landlord relationship.
A great aspect of becoming a landlord, no matter the investment strategy, is you get to use Mashvisor’s real estate analytics. We gave you a little glimpse of what our investment property analysis looks like, but that’s just the surface.
The property valuation tool is only one of the many real estate investment tools we can provide to you. Other investing tools, like the rental property calculator, come in handy when you’re paving the way to making money in real estate.
The best part? You’re able to look at the real estate metrics like cash on cash return, occupancy rate, and rental income for the city, or neighborhood level. Yes, we can zoom in THAT close. So give Mashvisor the chance to help you out as a real estate investor, you’ll be pleased with how great of a team we’ll make!
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Median Airbnb Rental Income of palm springs real estate market
This is the rental income you are receiving if you decide on renting out a room on Airbnb. We all know Airbnb is one of the hot new vacation rental websites that lets you put your Airbnb investment property out there!
It’s extremely popular amongst those millennial Airbnb guests that like to visit the Palm Springs area. This value tells you the median Airbnb rental income you can expect to receive if you decide on this short-term rental strategy.
Related: Real Estate Investing: Traditional vs. Airbnb Investments
Average Traditional Cap Rate & Average Airbnb Cap Rate of Palm Springs Real Estate Market
Cap rate is defined as the real estate rate of return on a real estate investment property based on the income that the property is anticipated to generate. This metric is ideal for getting a sneak peek at the estimated potential return on investment you will receive. This is where that Airbnb profit calculator and rental property calculator come in handy.
Average Airbnb Occupancy Rate of Palm Springs Real Estate Market
In simple terms, the occupancy rate is the ratio of rented rental property space to the total amount of available space. This rate is especially important to you when investing in real estate, as it provides an indication of the cash flow you can expect. You want to shoot for fairly high or above average occupancy rates. Nothing is worse than owning a rental property that remains empty.
Related: What Kind of Airbnb Occupancy Rate Can You Expect?
Hit or Miss
So here’s the big question: Is investing in Palm Springs real estate a hit or miss? We say this in every one of our “advising” blogs but it really all goes back to you as a real estate investor. Each of you has specific goals, wants, and needs when you choose to invest in real estate. Palm Springs real estate may or may not meet those needs, whether they are personal goals or financial aims.
However, if you feel Palm Springs real estate is meeting your target, then yes, it is a hit! The numbers look relatively good, the area is improving and reputable for its nice weather. We see Palm Springs real estate as a hotspot of real estate investors. Whether you choose to make your investment property an Airbnb rental or go the traditional route, Mashvisor is with you either way!