A home in Palm Springs, California, which sold for $1.35 million in May is now back on the market for half the price, according to a Zillow listing.
The property, which is under foreclosure, is now listed for sale on the real estate platform for $665,500—a price tag that is closer to the median list price of $633,816 for a typical home in the Southern California city, per Zillow data.
It is not the only property in Palm Springs to experience a dramatic price cut recently, with growing inventory and dwindling sales pushing the city’s market to a significant slowdown.
Prices Are Falling in the ‘Playground of the Stars’
The three-bedroom home at 2002 North Whitewater Club Drive in North Palm Springs offers a swimming pool, a spa and breathtaking views of the desert. The house was built in 1979 and sold in March 2022 for $750,000. A year later, it sold again for the staggering sum of $1.4 million, reflecting the same rapid price appreciation experienced by the city’s housing market at large during the homebuying frenzy of the pandemic years.
But this was not to last. The Palm Springs market is now experiencing a correction. According to the Greater Palm Springs Realtors’ latest Desert Housing Report, the city had the highest inventory level of all cities in California’s Coachella Valley in June, at 754, as homes were taking longer to sell and were piling up on the market. That was up from 625 homes for sale in the city a year earlier.
Palm Springs also had the most extreme average price discount for detached homes of all Coachella Valley cities, at 4.1 percent below the original asking price. Properties were also staying on the market longer, for an average of 52 days before going under contract, up from 46 days a year earlier.
Sellers in the city are increasingly being forced to slash their asking prices to attract buyers put off by higher costs and growing economic uncertainty, especially as inventory rises amid dwindling demand. Out of 795 residential properties listed for sale on Zillow in Palm Spring as of Tuesday morning, 157 had price cuts.
According to Zillow, the median list price of a home in Palm Springs is now 4.4 percent lower than it was a year ago, at $633,816. The median sale price, however, is much higher, at $719.167.
Why Palm Springs Sellers Are Slashing Prices
Sellers in Palm Springs are cutting prices for the same reason sellers all across the country are doing the same: to attract reluctant buyers at a time when they are facing more competition on the market.
Inventory has risen nationwide in recent months thanks to the addition of newly constructed homes and homeowners deciding it is no longer worth waiting for mortgage rates to come down to sell their properties.
But as mortgage rates are still hovering around the 7 percent mark and prices remain near their pandemic peaks, buyers are staying to the sidelines. As a result, this additional inventory is sitting longer on the market or remaining unsold, giving buyers more options and more negotiating power.
Under this scenario, sellers who want to prevail over their competition have to adjust their price expectations and offer buyers discounts—or they can decide to wait for a better time and remove their properties from the market.
This is, of course, not the case if your property has been foreclosed and the bank is trying to off-load it as quickly as possible. Foreclosures are another aspect of the ongoing affordability crisis in the U.S. housing market: Owners crushed by rising costs and higher monthly mortgage payments often cannot keep up, and they end up losing their homes.
According to real estate data provider Attom, as many as 187,659 properties in the country had foreclosure filings in the first six months of 2025, including default notices, scheduled auctions or bank repossessions. That was up 6 percent from a year earlier. A total of 140,006 properties began the foreclosure process in the first six months of the year, up 7 percent from the first half of last year and up 41 percent from the first half of 2020.
California reported the third-largest increase in foreclosure activity in the country after Texas and Florida, with 14,751 foreclosure starts.
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