Leonardo DiCaprio Leads a Boom in Palm Springs Real Estate

Leonardo DiCaprio Palm Springs Home - H 2014

Leonardo DiCaprio Palm Springs Home - H 2014

Home prices jumped 10 percent in 2013 as entertainment's elite (including the "Wolf of Wall Street" star) fuel a major real estate comeback in the desert.

There is no more telling gauge of Palm Springs' white-hot real estate rebound than the fact that Leonardo DiCaprio recently purchased Dinah Shore's former house. Located in the Old Las Palmas neighborhood -- a development built during the 1950s where Liberace, Katharine Hepburn, Kirk Douglas and Lucille Ball owned homes -- the Shore estate is a jewel in the midcentury architecture crown. Set on 1.34 acres, the 7,000-square-foot Donald Wexler-designed post and beam spent less than three weeks on the market before the actor swooped in to add it to his portfolio of A-list homes for $5.2 million. This was no outlier transaction, insist real estate experts in the area, where residential home values suffered losses of nearly 30 percent during the economic downturn. The DiCaprio sale continues an uptick of activity in the desert, with median home prices up nearly 20 percent since 2008. Anne Hathaway is rumored to be searching for a spread in the area, where architecturally significant houses with Hollywood pedigree include Bob Hope's John Lautner-designed estate, listed at $34 million (reduced from $50 million), and the Zanuck Estate, a 1935 Spanish-style compound in the Movie Colony neighborhood that recently sold for $3 million.

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"This used to be about the Rat Pack. Now a younger generation is discovering our architectural value," says Paul Kaplan real estate agent Gary Johns, who is on the board of Modernism Week, a design event that brings thousands of midcentury enthusiasts to Palm Springs each February.

Bill Damaschke, chief creative officer at DreamWorks Animation, purchased the former Gerald and Betty Ford estate in Rancho Mirage with his partner, manager John McIlwee. The 6,300-square-foot house, designed by Capitol Records building architect Welton Becket, was listed for $1.7 million and purchased by the pair in March 2012.

Damaschke isn't the only DWA executive buying in the desert: Head of strategy, planning and finance Bruce Daitch recently purchased in Palm Springs, and COO Ann Daly and chief marketing officer Dawn Taubin both bought houses in nearby La Quinta.

Many are drawn by the area's affordability compared with Southern California's beach enclaves. "You'd have to pay $25 million for a place like this in the Palisades," says ROAR manager Will Ward of his estate -- once owned by drummer Buddy Rich -- in Old Las Palmas, where homes now sell for more than $5 million. Ward and his wife, UTA's Louise Ward, bought the property with two guesthouses and a sunken tennis court as a shared family retreat with fellow manager Bernie Cahill.

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But iconic design is not the only thing driving the desert's boom. "Coachella has changed everything," says real estate agent Keith Markovitz of TTK Represents/Christie's International. "A lot of younger people in Hollywood are getting exposed to this part of the desert, its architecture and its appeal. Coachella has created a new market." The sold-out music and arts festival runs April 11 to 20.

"This has become a place for Generation X and Y," says architect Chris Pardo, who is designing and investing in several residential and commercial projects, including the upcoming Arrive hotel. Pardo is part owner of the hotel along with five others including Ezra Callahan, the sixth employee at Facebook. Arrive joins a wave of redevelopment that will feature the outdoor mall Downtown PS, with a Kimpton hotel due on the site in 2015. "When I came here two years ago, there were Wexler homes going for $290,000," says Pardo. "Now they're selling for $690,000."

Additional reporting by Kanika Lal.

This story first appeared in the March 14 issue of The Hollywood Reporter magazine.