PALM SPRINGS, CALIFORNIA. The mid-morning drive-time trip from LA takes about two hours. The surprising thing: it's developed and industrial all the way. No quiet drive in the dessert. Even so, when Mount San Jacinto is just behind you, there is a kind of magic. At some moment, the air becomes sweet and clear. Once in Palm Springs there’s a sense of protection, as though things that happen in other places don’t happen here.
It’s an illusion, of course. But it feels good. You can bask in the odd sense of ease that comes with visits to well-manicured places with abundant valet parking. According to Trulia, homes in Palm Springs enjoyed average appreciation of 43 percent last year. It now has a $317,000 median sales price and an average per square foot selling price of $227. But there’s no immediate sense of a real estate bubble here.
If anything, you get a sense of scarcity. Listings are few; houses sell fast. This makes Palm Springs like much of the country: a sellers market, but more so. Before everything was a bubble, we called this supply and demand.
Maybe it’s just a confluence of age and fashion. What we have here is a boomer flood. All are looking for the home of their dreams, their literal place in the sun.
Welcome to the New Old Money. Where once it meant inherited money, today it’s the money some retirees have. The National Association of Realtors data tells us that some of the fastest appreciating areas are places we associate with old folks. Homes in the Naples-Marco Island area of Florida appreciated 16.8 percent over the year ending in June. Las Vegas and Paradise, Nevada rose 14.2 percent over the same period. And the Cape Coral-Fort Myers area of Florida rose 12.3 percent. Meanwhile, the median existing home price appreciation for the country was a mere 4.4 percent. Call it Senior Power. It moves markets, even if it may not keep “Longmire” on TV.
To learn more I visit the Paul Kaplan Group, a boutique Palm Springs real estate firm with a nice website. The firm focuses on the growing popularity of “mid-century modern” homes. It helps that Palm Springs boomed in the 1950s and has great examples of the genre.
I ask Matthew Reader, a real estate agent with the group, for his take on what’s happening in the Palm Springs market.
“Our recovery has been so much quicker (than other areas),” he said. “Palm Springs is basically a vacation community for wealthy people. Our prices dropped about 50 percent (in the bust) and then we had a big rush. We’ve been getting a lot of press internationally and the Euro was high. We’ve had a big three-year ride. But now we’re really close to the 2006-2007 high— and in some neighborhoods we’re past it,”
How does mid-century modern fit in?
“When I moved here 14 years ago no one understood the term. But I chalk up a lot of the interest in this architecture to Mad Men, the TV series. A lot of people saw the style for 7 seasons.
Celebrity cachet here is another thing,” he says, referencing the Movie Colony homes. Hollywood contract stars required to stay close to the studios in LA built them.
“And we also have better seasonal airline service, including from New York on Virgin and from Toronto on Air Canada.
“This— and the website— is incredibly important. Buyers now have picked out the houses they want to see when they arrive. They have two or three days and they want to buy a house.
“Another thing that’s changing is the buyers. Ten years ago most buyers were retirees,” he notes. Census Bureau figures tell the broad story. With 26.5 percent of population age 65 or more, Palm Springs has almost twice the proportion of older people as the country as a whole. Even so, it’s young compared to Naples (45.5 percent) or Sarasota (33.3 percent).
The difference, Mr. Reader offers, is buying from another group. “Now, it’s young couples, many from LA. Older people go to the other end of the valley. But the people who are 10 or 20 years younger want to be in Palm Springs.”
Whatever the ultimate reasons, maybe we should start saying “boom” more, and “bubble” less.