Palm Desert, CA — The California Desert housing market continues to outperform much of the state, demonstrating resilience and steady growth despite ongoing economic and housing challenges, according to the 2026 Economic Forecast presented by the California Desert Association of Realtors (CDAR).
The forecast was delivered on January 23 at Agua Caliente Casino Rancho Mirage by Jordan Levine, Chief Economist for the California Association of Realtors and was attended by more than 100 CDAR members. The presentation provided an in-depth look at national, statewide, and local economic conditions shaping the real estate market.
Serena Leiterman, 2026 CDAR President, emphasized the importance of data-driven insight during a shifting market.
“In a market like this, information alone is not enough.” Leiterman stated. “Buyers and sellers need context. They need someone who understands how interest rates, inventory, and local demand patterns intersect in real time. That is where a Realtor’s value becomes clear. Our members are helping clients make informed decisions that protect their long-term financial future.”
Coachella Valley Shows Stronger Performance Than Statewide Market
While California as a whole recorded modest transaction growth of approximately 1.5%, the desert region significantly outperformed statewide trends. Riverside County transactions increased by nearly 8%.
Levine noted that the desert’s unique buyer profile, which is driven largely by high-income earners, second-home buyers, and long-term investors has helped in protecting the region from broader market slowdowns.
“The desert has been punching well above its weight,” Levine said. “A lot of the demand here is coming from buyers with strong balance sheets. People who own stocks, real estate, or businesses elsewhere and are choosing to invest here because it’s a desirable place to live and own property.”
Market Improving, but Caution Still Warranted
The forecast highlighted that even small declines in mortgage rates since late summer have led to a steady rebound in transaction activity. However, Levine cautioned that when viewed through a long-term lens, the market remains below historical norms.
“Yes, we’re improving, and yes, there will be more transactions this year,” Levine explained. “But when you zoom out beyond the last 18 months, it’s clear that we’re not back to normal yet. This isn’t a market to take for granted.”
Inventory Constraints Continue to Drive Prices
Despite buyer hesitancy over the past two years, home prices across most desert communities continued to rise. Levine emphasized that this is largely due to a persistent shortage of housing supply, not a surge in new listings. The forecast also underscored why a major price correction is unlikely. More than 60% of California homeowners hold mortgage rates below 4%, and over 90% have at least 20% home equity, conditions vastly different from those preceding the 2008 housing crisis.
Encouraging Signs for Entry-Level Buyers
While higher-end properties continue to outperform, the forecast showed early signs of renewed activity in homes priced under $750,000, marking the first growth in that segment in several years.
“We’re finally seeing some owner-occupant buyers test the waters again,” Levine said. “After years of volatility, buyers are adjusting expectations and realizing that today’s rates, historically speaking, aren’t bad, and may not get much better.”
What This Means for Buyers and Sellers
For buyers, waiting for rates alone may no longer be a winning strategy. As rates ease, competition increases, and price gains tend to accelerate rather than reverse. Strategic, well-informed purchasing remains key. For sellers, the market has shifted from the ultra-fast pace of the 3% rate era. Homes are still selling faster than pre-pandemic norms, but success now requires realistic pricing, strong presentation, and thoughtful marketing.
Long Term Outlook: The Role of Realtors Has Never Been More Important
Both Levine and Leiterman stressed that success in the current market depends less on timing the market and more on education, strategy, and communication.
“This is a market where Realtors truly earn their value,” Leiterman added. “Our members are not just opening doors, they’re helping buyers and sellers navigate complexity, manage expectations, and make informed long-term decisions.”
Looking ahead, the forecast anticipates modest but continued growth in transactions and prices, with the median price expected to rise slightly again this year. While the market is not poised for a rapid rebound, long-term fundamentals remain strong: California’s economy, population demand, and housing shortage continue to support real estate values. The desert market in particular is expected to remain attractive to high-income buyers, second-home owners, and long-term investors seeking stability amid broader economic uncertainty.
As the forecast concludes: real estate in California remains a long-term bet worth making, and the role of trusted advisors has never been more important.
