Housing market

California desert Towns ⁤Experience Income Shifts ‍as Wealthy Residents ​Arrive

Several California desert communities have experienced important shifts in household income between 2017 and 2022, ‌driven ⁣in part by an influx of wealthier residents. While some areas saw‍ incomes rise dramatically, ‌others‍ experienced​ substantial declines.

data analyzed shows Lompoc experienced the largest ⁤percentage drop in income, ⁢falling from $49,919 in 2017 to⁢ $20,532 in ⁢2022⁤ – a 58% decrease. california City ⁢followed with a 50% decrease, ‌moving from $44,490 to⁣ $22,264. San Marino saw a 42% ‍decrease, with income‍ dropping​ from $309,317 to $178,433. Indio experienced a 22% decrease, from $48,135 to $37,676, and kingsburg saw an 18%‍ decrease, from $100,640 to $82,838.

Conversely,other communities saw substantial income gains.The article highlights the dramatic increase in Indian Wells,where average household income skyrocketed from ⁣$139,000 in 2017 to $256,000 in 2022.

Economist Jerry Nickelsburg of the UCLA Anderson School of Management explained that income ‌fluctuations can occur when⁤ existing‍ residents earn more or when high earners ⁢relocate to a community. He noted that nationwide, higher earners have experienced greater income growth than lower earners – “the rich have gotten richer.” He also pointed out that California’s treatment of capital gains as regular income can cause annual averages in ⁢smaller communities to vary based on investment outcomes. The analysis focused on communities with more than⁢ 3,000​ tax returns to mitigate this effect.

Nickelsburg also observed that migration patterns often involve⁤ lower-income residents moving from coastal areas ⁢to inland‌ regions, suggesting that income booms in suburban inland locales​ may⁤ reflect growth in sectors like retail and ‌hospitality.

In the Coachella Valley, real estate professional Garman noted, ⁣”the money’s coming from‌ all over,” especially​ from cash buyers ‍during the competitive ​housing market of ⁤2022 and 2023. These new residents⁤ are now high earners ‍who⁣ have relocated to previously less affluent⁤ towns, a‍ trend Garman believes ‍”is the new norm.” New attractions like⁢ the Firebirds professional ice​ hockey team and Disney’s Cotino housing ⁢development ‍are ​drawing families to the ⁣area.

While the influx of wealth isn’t‌ currently a ‍concern for Garman’s clients, he ⁣anticipates⁤ that “more affordable areas will become less affordable later,” acknowledging the ‌inherent challenges of maintaining ⁤affordability. ⁤He ‍questioned, “How do we ⁢make⁣ it fair for everybody?​ How do we make enough homes affordable‌ for⁣ everybody?”

Thousand ​Palms, an unincorporated community, is attracting homeowners‌ due to “taxes [being] more reasonable” and “fewer regulations​ when‌ you want to build,” according to resident Bond. She ⁢believes the town’s boom is‍ largely due to the broader growth in ⁢the Coachella Valley, rather than improvements in ‍local 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 stated.

There is ongoing discussion about a ‍potential annexation of Thousand Palms by a neighboring city like Cathedral City ​or Palm Desert,⁤ with Bond stating, “It’s ⁤only a matter of time ​before somebody buys us up. They want these owners,⁣ they want their tax ⁢revenue.” Despite the heat⁢ – “God needs to turn a fan on,or something,” Bond quipped ​- signs indicate continued ‍growth,with million-dollar homes⁢ being built even without pools. “Thousand Palms is not what it used to be.”