If 2025 felt like a market that never fully “broke” in either direction, you are not imagining it. Nationally, sales improved a bit, inventory rose, and price growth cooled. But affordability stayed tight, and that kept many buyers and sellers on the sidelines.

Why the market felt stuck in 2025

1) Rates stayed high enough to cap buyer power

Even when prices stop racing upward, monthly payments can stay expensive when 30-year mortgage rates hover above 6%. That combination kept many move-up buyers and first-timers in “watch mode,” especially anyone who needs financing.

2) Homeowners with low rates did not want to move

A huge chunk of homeowners are still sitting on mortgages under 4%. Selling and buying again often means trading a low payment for a much higher one, so many people simply stayed put. That reduced normal “move-up” inventory, even when buyer demand was there.

3) More listings, but also more hesitation

When homes take longer to sell, some sellers adjust price. Others try a different route: pause the listing, rent the home out, or wait for a stronger season. That push and pull is part of why inventory can rise without the market feeling truly “active.”

How does that show up locally in Palm Springs and Palm Desert

Inventory gave buyers more choice, but not always better affordability

Across the Coachella Valley, inventory increased meaningfully during 2025, and “months of supply” moved closer to a balanced market range in parts of the Valley. In plain English: buyers had more options, but the payment math still mattered.

Palm Springs and Palm Desert: pricing feels steadier at the top, more sensitive in the middle

In luxury segments, cash buyers and second-home buyers can keep deals moving even when rates are high. In mid-range price points, financing costs drive decisions, and small pricing or concession changes can make or break a deal.

Snapshot signals buyers are watching right now

• Palm Springs: Zillow’s Home Value Index shows values down year over year, with homes taking weeks (not days) to go pending.
• Palm Desert: Multiple datasets show softer year-over-year pricing and longer market times versus last year, which usually increases negotiating room for buyers.

The “lock-in effect” is easing, slowly

More homeowners now have mortgages above 6%, which means they are not giving up a once-in-a-lifetime rate if they move. That can unlock more listings and more buying activity at the same time, because most sellers become buyers too. This is one of the more important reasons many economists expect 2026 to feel less frozen than 2024 to 2025.

What to expect in 2026 (realistic version)

• More normal negotiations: price reductions, seller credits, and rate buydowns are likely to remain common tools.
• Flatter pricing: not a crash, not a surge, more of a “prove it” market where condition, pricing, and presentation matter.
• Seasonality will matter again: for Palm Springs and Palm Desert, timing around peak visitor months can amplify showing activity and urgency for certain home styles.

Smart moves if you are buying in Palm Springs or Palm Desert

• Shop the payment, not just the price: ask about temporary buydowns, seller credits, and lender programs that reduce the first 1 to 3 years of payments.
• Use time-on-market as leverage: longer DOM often opens the door to credits, repairs, or price adjustments.
• Know your non-negotiables: pools, views, HOA rules, and short-term rental rules can change the value equation fast.

Smart moves if you are selling in Palm Springs or Palm Desert

• Price for today’s buyer: the market punishes “2022 pricing” quickly. A strong list price can beat a slow drip of reductions.
• Make financing easier: offering a seller credit can expand the buyer pool more than a small price cut, because it can reduce the monthly payment.
• Win the first 10 seconds: pro photos, clean landscaping, and a heat-smart showing plan matter in the desert.

If you want a hyper-local strategy for your neighborhood (Palm Desert Cove, South Palm Desert, Sunrise Park, Tahquitz River Estates, Movie Colony, etc.), use the contact form on buyhomesinpalmdesert.com and ask for a pricing and timing plan based on current competition and buyer demand.