These California desert communities are seeing a gold rush as wealthy residents move in
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- A Times analysis shows that two of the California communities with the greatest growth in income between 2017 and 2022 were in the Coachella Valley
- The average income in Thousand Palms rose more than 3.5 times over that span while the average income in nearby Indian Wells nearly doubled.
Jessica Bond, 31, owns a roofing company servicing the Coachella Valley with her husband. They live in a small unincorporated town called Thousand Palms.
They bought their home in 2018. Things have changed a lot in the seven years since, thanks to a housing market that is almost as hot as a September day in the valley.
“It’s ridiculous, it’s crazy,” she said. “The same house that was on the market five years ago has doubled in price.”
All around, she says, are signs of an influx of wealth: “You see what kind of cars are in people’s driveways, you start to see motor homes and boats,” she said.
She can see a $100,000 pontoon boat in a neighbor’s driveway, whereas two doors down there’s a Honda in the frontyard on cinder blocks, Bond said.
As skyrocketing home prices push more and more Californians from cities to suburbs, exurbs and even other states, some so-called secondary cities are seeing an influx of new wealth.
Though not traditionally viewed as fancy enclaves, these smaller cities are booming as urbanites flee major metropolitan centers in search of increased living space or telecommuting options. One Southern California area that is clearly booming as a result: the desert burgs of Riverside County.
Two of the top three communities in the state that saw the greatest growth in average income from 2017 to 2022 were in the Coachella Valley, a Los Angeles Times analysis of tax returns from the California Franchise Tax Board has found.
Thousand Palms saw average incomes rise more than 3.5 times over that span, from $12,700 in 2017 to nearly $45,000 three years later. In nearby Indian Wells, incomes nearly doubled, from $139,000 to $256,000.
How can we achieve more and better housing? Denser neighborhoods. Smaller homes, some modular or printed in 3-D. Properties co-owned. ADUs sold separately.
The two communities are remarkably different — income levels in Thousand Palms were far lower than in Indian Wells — but each are getting richer from a regionwide perspective, said Kyle Garman, an agent for Keller Williams who has sold real estate in the Coachella Valley for eight years.
Part of the story is attributable to remote work, he said, but the valley has also seen a shift from a tourist destination to a place to settle down.
“It’s not just Palm Springs, it’s not just people coming for the festivals, it’s the whole valley,” Garman said.
Before the COVID-19 pandemic, prices were much lower and an estimated 35% to 40% of residents stayed for the hottest months, he said. As more attractions and infrastructure have become available to residents, though, “people are sticking around more.”
In the past, “you’d get an exodus of people going back to their homes,” Garman said, but now it’s closer to 60% of people staying full-time and dealing with the heat.
The Coachella Valley boom is just beginning, as Garman sees it: “It’s not stopping, it’s gaining momentum in a big way.”
The Times’ statewide data analysis found that not all of the largest income gains were in traditionally modest towns. Upscale Del Mar in San Diego County and the Corona del Mar section of Newport Beach made the list. But so did the high-desert town of Victorville.
Each of these communities nearly doubled in average income, while the average California community saw adjusted gross income rise by 36% in the five-year span.
The top five communities with more than 3,000 tax returns:
- Thousand Palms — $12,734 in 2017 to $44,893 in 2022, a 250% increase.
- Del Mar — $240,708 in 2017 to $503,989 in 2022, a 210% increase.
- Indian Wells — $138,653 in 2017 to $255,899 in 2022, an 85% increase.
- Victorville — $27,745 in 2017 to $50,314 in 2022, an 81% increase.
- Wilton — $108,207 in 2017 to $188,738 in 2022, a 74% increase.
The bottom five:
- Lompoc — $49,919 in 2017 to $20,532 in 2022, a 58% decrease.
- California City — $44,490 in 2017 to $22,264 in 2022, a 50% decrease.
- San Marino — $309,317 in 2017 to $178,433 in 2022, a 42% decrease.
- Indio — $48,135 in 2017 to $37,676 in 2022, a 22% decrease.
- Kingsburg — $100,640 in 2017 to $82,838 an 18% decrease.
On the other end of the spectrum, Lompoc saw income drop the most in the same period, falling by more than half, to around $20,000 from $50,000. California City and San Marino rounded out the bottom three.
Incomes can rise if those living in a community earn more, or if high earners move in, said Jerry Nickelsburg, an economist with the UCLA Anderson School of Management.
Because California treats capital gains as regular income, annual averages in smaller communities can vary widely year to year based on investment outcomes. For this analysis, the Times only considered communities with more than 3,000 tax returns.
Nationwide, top earners have seen more income growth than lower earners, he said — the rich have gotten richer.
Migration from coastal communities to inland areas tends to involve lower-income residents, Nickelsburg said, so income booms in suburban inland locales could instead indicate the growth of retail or hospitality jobs.
Chronic groundwater depletion has caused the land to sink in parts of California’s Central Valley. New research shows home values are also declining in areas where it’s a known problem.
The average California household has a net worth between three and six times their adjusted gross income, meaning that the average Indian Wells resident probably became a millionaire between 2017 and 2022 as average household income skyrocketed to $256,000 from $139,000.
In the Coachella Valley, “the money’s coming from all over,” Garman observed. When the housing market was most competitive, around 2022 and 2023, a number of cash buyers flooded in.
Now, they’re high earners who have relocated to formerly less tony towns. “This is the new norm,” he said.
Garman pointed to a number of new Coachella Valley attractions that were drawing families — the Firebirds professional ice hockey team and Disney’s Cotino housing development.
Although the influx of wealthier residents isn’t a concern to clients yet, “more affordable areas will become less affordable later,” he said. “That’s just the nature of the beast.”
Garman thought back to the days when the housing market was most competitive, when sellers wouldn’t ever have to negotiate. “How do we make it fair for everybody? How do we make enough homes affordable for everybody?” he wondered.
“I’m not a politician, I don’t know.”
Thousand Palms is unincorporated, drawing homeowners because, as Bond put it: “taxes are more reasonable, you have fewer regulations when you want to build.”
She believes the boom in her town is mostly due to the broader boom in the Coachella Valley rather than underlying changes in infrastructure or amenities. “Nothing has changed in Thousand Palms. Nobody has dealt with the homelessness ... we don’t have an extra amount of police presence,” she said.
The talk of the town is a possible annexation by a nearby city such as Cathedral City or Palm Desert. “It’s only a matter of time before somebody buys us up,” Bond said.” “They want these owners, they want their tax revenue.”
Although it’s hot — “God needs to turn a fan on, or something,” Bond quipped — all signs point to continued growth. Million-dollar homes are being built without pools.
“Thousand Palms is not what it used to be.”
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