Palm Springs Luxury Market Trends For Second-Home Buyers

Thinking about a Palm Springs getaway you can call your own? You are not alone. Second-home buyers are still drawn to the valley’s sunshine, architecture and resort lifestyle, but today’s luxury market rewards a measured, well-informed approach. In this guide, you will see what is happening with pricing and inventory, how local short-term rental rules shape returns, and the simple steps to move from browsing to buying with confidence. Let’s dive in.

Palm Springs luxury snapshot for 2026

The broader Coachella Valley shifted from the rapid, seller-leaning conditions of 2020–2022 to a more balanced pace through 2025 and into early 2026. Inventory recovered from historic lows, and prices generally held most of their pandemic-era gains, though growth cooled as days on market lengthened in many segments. In other words, you usually have more time to compare options and negotiate than you did a few years ago.

At the city level, different data sources tell complementary stories. Zillow’s city index placed Palm Springs around $617,000 as of January 31, 2026, while a separate January 2026 reading based on closed sales showed a median near $705,000. These numbers track the overall city, not the luxury tier, and neighborhood patterns vary widely. Prime pockets closer to downtown and pedigree areas typically trade well above city averages, while other areas track closer to valley medians.

What “luxury” means in Palm Springs

Palm Springs agents and market watchers commonly treat $1 million and above as the start of the luxury segment. Within that, each price band behaves a bit differently.

Price bands explained

• Entry luxury: roughly $1.0M to $2.0M. Think renovated or well-sited homes with pools in desirable pockets, often with mid-century influences.
• Upper luxury: roughly $2.0M to $5.0M. Expect architect-grade finishes, larger lots, and premium locations, including select gated or golf-adjacent enclaves.
• Ultra-luxury: $5.0M and up. Custom estates and trophy properties are lower volume and can follow their own rhythm.

Why it matters: liquidity tends to decrease as price rises. Turnkey, design-forward homes in great locations often move faster and hold values well. Properties that need work or lack standout features can sit longer, creating negotiation room.

Second-home demand and timing

Second-home interest remains steady from Los Angeles, Orange County, the Bay Area and Arizona buyers who want a lifestyle retreat with potential rental flexibility. Palm Springs’ architecture, privacy and convenient air access through PSP continue to anchor demand. In a more balanced 2026 market, you can usually tour a wider set of listings before making an offer, especially outside peak months. Exceptional or fully renovated luxury homes still draw quicker offers.

If you plan to rent your second home

Short-term rental rules are a defining factor in Palm Springs. If rental income is part of your plan, build your search around compliance from day one.

STR permits and neighborhood caps

Palm Springs runs a detailed vacation rental certificate program with operational rules, safety standards, and neighborhood-level caps that limit the number of certificates that can exist in each area. The city posts current requirements, forms and updates on its official vacation rental information page. A key rule is the neighborhood density cap. In many areas, once a set percentage of homes are permitted, the city will not approve new certificates. That makes existing, permitted properties more valuable to buyers who need legal rental use.

Contract limits and compliance details

Permit types and contract limits affect how often you can host each year. Newer permits may allow fewer annual rental contracts than grandfathered permits, and there is also a limited “junior” permit option with even fewer contracts. Because these limits change over time, confirm the exact rules and permit type during due diligence using the city’s official resources on the vacation rental information page and the application checklist for a vacation rental certificate. Operating without a valid permit invites heavy fines and potential revocation.

Local taxes and fees to budget

Short stays are subject to the city’s Transient Occupancy Tax and the Greater Palm Springs Tourism Business Improvement District assessment. Owners typically collect a combined local amount around 12.5 percent on eligible bookings. For official details on the assessment and how it applies, review the city’s page on the Tourism Business Improvement District. Some platforms collect and remit taxes, but the owner remains responsible for proper registration and compliance.

HOA and insurance considerations

If your target property is within an HOA, confirm whether short-term rentals are allowed and what restrictions apply. The city’s permit program also requires proof of liability insurance at specific thresholds. You can reference the city’s current insurance and documentation requirements in the vacation rental certificate materials, then have your insurance advisor tailor coverage if you plan to host.

Financing a luxury second home

Second-home loans follow stricter guidelines than primary-residence mortgages. Lenders often require higher down payments, stronger credit, documented cash reserves and slightly higher rates.

• Down payment: many programs expect at least 10 to 20 percent down.
• Cash reserves: plan for several months of total housing payments on hand.
• Rates: second-home rates can run about 0.5 percent or more above comparable primary-residence loans, depending on your credit and the product.

For an at-a-glance rate context and common underwriting standards, review a national tracker like Bankrate’s guide to second-home mortgage rates. Then have a local lender price your specific scenario.

A quick budgeting example

Suppose you target a $1.5 million home in the entry-to-upper luxury range:

• Down payment: 15 to 20 percent ($225,000 to $300,000)
• Closing costs: 2 to 5 percent of purchase price ($30,000 to $75,000)
• Reserves: 3 to 6 months of your total monthly housing payment
• Operating: insurance, property management if applicable, pool and landscape, utilities, HOA dues, seasonal maintenance
• If renting: permit fees, local taxes on short stays, and any management or platform fees

Build your model with conservative occupancy and contract limits if you plan to host. This keeps projections realistic and reduces surprise costs.

What to compare across neighborhoods

A smart second-home search in Palm Springs focuses on the property’s use case and the rules that follow it.

• Days on market and supply. The market is more balanced than in 2021–2022, but exceptional listings still command attention. Expect longer timelines in some condo segments than comparable single-family.
• STR eligibility. Confirm whether a valid certificate exists, if the neighborhood cap allows new permits, and whether HOA rules limit short stays. The city’s vacation rental information page is your starting point.
• Property tax and assessments. Riverside County properties typically carry an effective tax rate near 1.0 to 1.4 percent of assessed value when you include base tax and local assessments. For county context and assessment discussions, see the Riverside County materials in the Annual Report, then have your agent and title team confirm specifics for each parcel.
• Ownership type and maintenance. If you want a lock-and-leave setup, compare HOA services, landscape rules and community security. If you want privacy and control, single-family homes on fee-simple lots provide flexibility but require a self-managed maintenance plan.

A simple 7-step plan to buy well

1. Define your use case.

• Pure lifestyle, occasional hosting, or rental-forward strategy. Your answer determines neighborhoods, permit needs and budget.

2. Get second-home pre-approval.

• Ask lenders to price a true second-home product with the down payment, reserve and rate assumptions above. Use a conservative rate and payment in your model.

3. Choose your price band and target areas.

• Entry luxury, upper luxury or ultra-luxury each attract different buyer pools and timelines. Align your search with the features you value most.

4. Screen for STR eligibility early.

• If hosting matters, verify an existing certificate or the neighborhood’s capacity for a new one using the city’s vacation rental information page. Confirm HOA rules in writing.

5. Build a full operating budget.

• Include taxes, insurance, utilities, HOA, maintenance and management. If renting, add permit fees and the local short-stay tax load using the Tourism Business Improvement District reference.

6. Tour with an eye for value drivers.

• Prioritize architecture, lot orientation, privacy, views, pool setup and turnkey condition. These factors support both lifestyle enjoyment and long-term value.

7. Negotiate with data.

• In a balanced market, clean contingencies, realistic timelines and verified financing can secure better terms without overreaching.

How Joint Luxury Group helps

When you are buying a luxury second home, you deserve a single, accountable advisor who understands neighborhood nuances, STR compliance and negotiation strategy. As a boutique, founder-led brokerage backed by Compass tools, we help you narrow the field to on-target listings, validate permit status and HOA rules, and price the right offer using current local data. We also coordinate inspections, insurance guidance and vendor introductions so your closing feels smooth, not stressful.

Ready to explore Palm Springs with a clear plan? Let’s talk about your goals and map the best path to a home that fits your lifestyle. Joint Luxury Group is here to help.

FAQs

What are current Palm Springs price trends and timing?

• The valley shifted to a more balanced market in 2025, with recovered inventory and longer days on market, while Palm Springs city-level measures showed values near $617,000 by index and about $705,000 by median sale in January 2026.

What price point counts as luxury in Palm Springs?

• Local practice treats $1 million and above as luxury, with bands at $1.0M–$2.0M, $2.0M–$5.0M and $5.0M+, each with different liquidity and buyer pools.

How strict are Palm Springs short-term rental rules?

• The city uses a vacation rental certificate program with neighborhood-level caps and contract limits, plus safety and operations standards; see the official vacation rental information page for current details.

What taxes apply to short-term stays in Palm Springs?

• Short stays are typically subject to Transient Occupancy Tax and a 1 percent Tourism Business Improvement District assessment, for a combined local collection around 12.5 percent; review the TBID page for context.

Are condos or single-family homes better for a second home?

• It depends on your goals; condos often have higher inventory and longer timelines than detached luxury homes, which can suit buyers seeking turnkey, lock-and-leave living but may carry HOA rules that limit rentals.

What should I expect when financing a second home?

• Many lenders require 10 to 20 percent down, documented reserves and slightly higher rates than primary-residence loans; check a national tracker like Bankrate’s second-home mortgage rates and then price your exact scenario with a local lender.