The high-end residential market in the Coachella Valley, California has remained unusually stable over the past several years, even as rising interest rates have squeezed buyers in lower and middle price tiers. According to Troy Kudlac, Broker-President of KUD Properties, Inc., the divergence reflects a structural difference in how high-net-worth buyers make purchasing decisions. They pay cash, care about lifestyle fit, and are largely indifferent to mortgage rates.
“The high-end market here has probably been the most consistent,” Kudlac says. That consistency has held for roughly three and a half to four years, since the post-COVID price surge ended. During this period, many other segments have shown volatility.
Cash Buyers Dominate Luxury
The clearest sign of this divergence is the prevalence of cash transactions at the upper end. As mortgage rates climbed, financing became a major barrier for mid-market buyers. For luxury buyers, that constraint largely does not apply.
“A lot of our higher end tends to be cash purchases right now since interest rates have gone up so much,” Kudlac says. Properties priced above a million dollars in the Coachella Valley compete in a market driven by personal preference and value comparisons with other second-home destinations, not by the Federal Reserve’s rate decisions.
Kudlac points out that the valley draws buyers from cold-weather states such as Washington, Oregon, Wisconsin, and New York. These buyers are motivated by climate and lifestyle, not financing windows. At the same time, buyers in lower and middle tiers are seeing more concessions from sellers. Kudlac says sellers in those segments are helping with closing costs or buying down rates. These concessions rarely appear in transactions above a million dollars.
Developers Grow More Cautious
While luxury buyer demand has remained stable, developers are approaching new projects with far more caution than they showed during the pandemic-era boom.
“Developers are being very picky about what they want and what makes sense,” Kudlac says. “A few years ago, developers were willing to take on more risk, knowing they could work it out through the process.”
Developers who might previously have moved forward on a complicated site now require a much cleaner picture before committing capital. Such sites might involve multiple HOAs, infrastructure questions, or unclear entitlements. Kudlac says his own approach to evaluating deals has tightened considerably compared to earlier cycles.
The result is a market where luxury demand remains present, but new supply is constrained by developer caution. Buyers seeking new construction at the high end now have fewer options.
Infrastructure constraints compound the problem. Kudlac identifies power availability in the East Valley as a specific bottleneck. The Imperial Irrigation District is overloaded, leaving developers with buildable land but no electrical capacity to serve it. “They have land that’s great land to build on, but no power,” Kudlac says. “So it’s not worth much without power.”
Buyers Want Finished Homes
Buyer expectations have also narrowed. Kudlac says the market rewards finished homes: properties where equipment, landscaping, and roofing are all in good condition. Buyers are not willing to take on significant repair work.
“Most buyers are looking for finished property,” he says. Homes that require visible investment before move-in are sitting longer, while turnkey listings attract offers more quickly.
The exception is full renovation projects, where a buyer knows they will redo everything to their own specifications. The middle ground, homes needing moderate work, is the hardest to sell.
Development Follows the Power
Kudlac says the infrastructure gap is now a defining factor in where new development happens, not just whether a given deal moves forward. Builders across the valley are increasingly choosing sites based on existing power and utility access rather than location alone, since resolving those problems after the fact has become too costly or slow.
That calculation is pushing some development activity outside the core valley altogether. Kudlac points to nearby areas such as Yucca Valley and Joshua Tree, as well as markets outside California, as examples of where builders are turning when valley sites lack adequate infrastructure. The pattern reflects the same constraint driving the caution described earlier: land without power or utility access carries limited value, regardless of location or price point.
About the Expert: Troy Kudlac is Broker and President of KUD Properties, a brokerage and development firm active across the Coachella Valley in Southern California.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
