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Many homebuyers and owners have trouble understanding the distinction between assessed value and market value. The difference matters when you purchase or sell a luxury home in Palm Springs. Assessed value affects your property tax bill, while market value drives your sale or purchase price.
Buyers need to be confident in their decisions. As a seller, you want to position your property correctly in today's competitive market. This post will help you understand what these values mean and why they differ.
Palm Springs Real Estate Market Watch
As of April 2025, the sale-to-list price for homes in Palm Springs was 3.7%. However, Palm Springs real estate prices fluctuate daily. Contact Geoffrey Moore for help buying and selling homes in the Greater Palm Springs area.
Differences Between Assessed and Market Value
Riverside County determines the assessed value for tax purposes. The starting point is the home's fair market value at the time of purchase or reassessment. However, other factors and rules influence how the assessed value changes over the years of ownership.
Market value is the amount a buyer will currently pay for your Palm Springs property. For example, a home might have an assessed value of $650,000 but a market value of $900,000. You can learn more about tax assessments in this Riverside property tax article.
How Assessed Value Is Calculated
In Palm Springs, the county determines the assessed value of a home based on California's Proposition 13 rules. When you buy a home, the county sets the value at the price you paid. Each year, this value can only increase by a maximum of 2%. The main exception is if the property undergoes significant renovations or improvements. These rules maintain stable property taxes for homeowners, even as home values rise.
What Shapes Market Value in Palm Springs?
Market value reflects factors like the balance of supply and demand, as well as buyer sentiment. Luxury buyers seek locations, architectural design, modern features, and neighborhood amenities. Comparable home sales also weigh heavily.
For Palm Springs, proximity to golf courses, downtown entertainment, or mountain views can push values higher. Unlike assessed value, market value can fluctuate rapidly in response to changing market conditions.
Why the Two Values Rarely Match
Assessed value and market value seldom align. Assessment cycles are slower and based on tax law. Market value is subject to the ever-changing conditions of the housing market.
Let's say you bought a home for $700,000 five years ago. That property might now sell for $1.2 million. However, its assessed value will only have increased slightly.
FAQ About Home Values in Palm Springs
Can a Palm Springs home sell for less than its assessed value?
Yes. Market conditions may occasionally result in a price below the assessed value.
Does a higher market value mean higher property taxes right away?
No. Your purchase price is typically the base from which the assessed value starts. No matter how much the market value increases, Prop 13 protects property owners from dramatic tax hikes.
How often is reassessment done in Palm Springs?
Reassessment occurs at the time of purchase, after construction, or when ownership of the property changes.
What if my assessed value is too high?
You can appeal to Riverside County and provide supporting evidence for a review.
Work With an Expert Who Knows the Market
Understanding the difference between assessed value and market value is key to making informed real estate decisions. If you're buying or selling a luxury home, you need clear guidance on pricing and taxes.
Geoffrey Moore has the local expertise to assist you in the Palm Springs market. Contact me today to discuss your goals and find the best path forward.
Posted by Jim Cronin on
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