January 2026 Hi-Desert Real Estate Market Update and 2025 Year End

Happy New Year, Real Estate Fans!

Another year behind us, and what a year it was. Included in this Update is both the month of December and year end numbers for 2025. Let’s start with December, move on to the year end report and conclude with my opinion on how 2026 is looking for us locally. This cover may be a little longer than usual due to the last two items.

December ended with a surge in sales. We closed escrow on 75 homes (compared to 78 in 2024). 75 closings made this our fifth best month of closing last year. In the 75 closings, we actually saw some of our higher priced properties close. This was a surprise. Most of the closed properties went into escrow in November so it appears our mild late November brought higher-end buyers to our communities. Only 66% of homes sold were under $400,000. Most of the year’s closed homes under this amount ranged from 70% to 80% of our sales. Average price and price per square foot rose in Yucca Valley.  Joshua Tree saw an increase in average price but a decline in price per square foot.  Twentynine Palms declined in both average price and price per square foot. Average days on the MLS was triple digit in Yucca Valley and Joshua Tree and just one day short of this in Twentynine Palms (99 days). 

Vacant land sales were well below the November count. We currently have over 1,000 vacant land listings. This equates to about a three-year inventory based on December sales.

Shifting to the Year End Update-

We closed escrow on 878 homes in 2025. This is the lowest number of closings since I have been creating this Updates (2013). This is also 39 closings behind 2024. Joshua Tree saw a 3% increase in closings. The other communities saw minor declines.

Average prices declined by a very small amount in Yucca Valley ($1,630). Joshua Tree declined $36,509. This could be the reason they were the only community to see sales increases. Twentynine Palms declined a small amount also ($3,069). On other side of that coin, Yucca Valley and Joshua Tree saw a small increase in price per square foot while Twentynine Palms saw a small decline in price per square foot. 

Basin-wide, 74% of sales were under $400,000. 13% of sales were over $500,000.

The Average Days on the MLS was triple digit in Yucca Valley and Joshua Tree, but 76 in Twentynine Palms.

As for vacant land. Total sales for the year were 400, the majority of which were in Twentynine Palms.

On to 2026-

During these down years, it can be difficult to forecast where we are heading. I forecast that inventory would drop to 600 the first week of January. It dropped to 615. Missed it. Currently we are seeing a lot of government activity that makes people unsure of the future. It doesn’t matter which side of the spectrum you stand; everything seems to be confused. If we truly have a few million illegal immigrants that have left, wouldn’t it stand to reason we have excess housing remaining from those that left? Wouldn’t it stand that we have jobs unfilled from those same workers? But we are not seeing any of that. I think this year, more than most, is extremely difficult to forecast.

I beat this drum all the time. We don’t have good jobs in our Hi Desert communities. Many of our locals commute to better jobs. I believe we have returned to being an affordable and cooler alternative to the low desert. I think this year could prove to be the year low desert workers return to Hi Desert for less expensive housing and cooler temperatures. Many of the short-term rental investors have begun to vacate our area so we will see more homes available to locals that have been remodeled and/or are modernized. I would expect we will return to inventory levels between 700 and 800 homes by March. I believe we will see an increase in closed escrows to 1050 to 1150 sales this year. I also believe we will see a minor increase in pricing: between 1% and 3%. 

The one factor that is very hard to forecast is interest rates. Of course, this is the primary factor that drives sales. Affordability. As I write this, we have dropped to around 6.25% for a 30-year mortgage and 5.375 for a 15-year mortgage. Many are claiming this is a three-year low. I believe the federal government will push for further reductions, but I am not sure the market will follow. Most of what I read is that interest rates will remain within a half point of 6% for the balance of the year. Look out if we drop closer to the 5% range. This could open the floodgate of potential buyers that have stood on the sidelines because they can’t afford the payments of a higher interest rate loan. 

One thing is for sure, this year will be interesting for a variety of reasons. I am excited and ready to help anyone who needs me.

Sincerely,

Bob Armstrong
(760) 221-2999
DRE #01275801
GREEN Real Estate Group