Palm Springs: The #1 Hottest Second-Home Market According To Wall Street Journal!

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5 years ago

The very hottest second-home destination is Palm Springs, Calif., once a retiree and golf community that now hosts hip events like Coachella, the music festival, plus activities focused on film, architecture and fashion.

“We had a listing at $2.2 million and it sold at the open house,” said Paul Kaplan of Bennion Deville. The house, in escrow now, hit the sweet spot for many buyers in Palm Springs: It was new construction, modern-looking, and within a mile of downtown.

– Cities where 10% or more of purchases are for second homes
– The top 5% price band is higher than the national top 5% price band.
– Typical listing receives a higher number of views on Realtor.com and sells faster than in other markets.
– Data was analyzed between July 2018 and June 2019

As in most vacation areas, buyers put a premium on new or renovated homes that will be easy to rent out short term, said Tony Halton, managing partner of desert division of Halton Pardee.

Serious buyers in vacation areas should vet agents carefully. These markets often have tons of inventory—Key West, for example, landed on both our buyer’s markets list and hottest second-home markets list. Knowledgeable insiders are key to separating motivated sellers from owners just testing the market.

Merriah Harkins, 48, a sales and marketing executive from Seattle, dreamed about owning a place in Palm Springs, but not just any house. She and her husband Mark visited at least 100 properties before spying a new listing for a $1.4 million, 3,150-square-foot, modernist three- bedroom home.

They flew to Palm Springs immediately and offered full price, hoping to compensate for the fact that their offer included a financing contingency in a market awash in cash. They closed in May and are now personalizing the house.

“Finding something we could both agree on was harder, because a vacation home is a want instead of a need,” said Ms. Harkins. “We knew this was the one, so we acted fast.”
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TIPS FOR BUYING IN A SECOND-HOME MARKET
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– Prove you’re serious. Get preapproved or have proof of funds to show local agents you’re not just a dreamer.
– Sign with a buyer’s agent. They’ll search for you while you’re back home.
– Be open to fixers. Vacation-home buyers put a premium on turnkey properties; if you’re willing to do work, you might find a bargain.
– Beware local anomalies. In Palm Springs, many homes are on leased land, which means homeowners pay rent on the lot. In Key West, all local contractors can be tied up with post-hurricane or storm work.
– Buy off season. Typically, seasonal renters make up the biggest buyer pool; shop when there is less competition.