Introduction
Palm Springs, California, is renowned for its warm weather, stunning desert landscapes, and vibrant tourism industry. The city has become a popular destination for short-term rentals, attracting visitors from various parts of the world.
In this guide, we will delve into the dynamics of the short-term rental market in Palm Springs, examining key data points and discussing the factors that make it an attractive investment option.
Market Overview
To understand the dynamics of the short-term rental market in Palm Springs, let’s delve into some key statistics and figures.
Supply
The most popular homes are 3-bedroom homes, comprising 40.57% of inventory. This is followed by 4 and 2-bedroom homes at 17.74% and 16.95% of the total inventory, respectively.
Homes Appreciation
As of October 2024, according to Zillow, homes in Palm Springs experienced an depreciation of -0.72%. This data indicates a significant decrease in property values.
Median Home Value
As of October of 2024, Homes in Palm Springs have depreciated by -0.72%. The median home value in Palm Springs is $640,400 as reported by Zillow. This figure highlights the city’s robust real estate market and the potential for long-term property appreciation.
Active Short Term Rentals
As of October 2024, Palm Springs boasts a significant Airbnb rental market, with approximately 3,942 active rentals. This abundance of available properties provides ample opportunities for investors and homeowners looking to capitalize on the tourism demand.
Average Daily Rate
The median ADR for the market is $510. The Average Daily Rate is the highest for 5-bedroom homes ($599) followed by 4-bedrooms and 3 bedrooms at $513 and $385 respectively.
Annual Revenue
According to Chalet, short-term rentals in Palm Springs earn an average of $58,433 annually, highlighting the strong investment potential in the city’s market. You can evaluate your properties using our free Airbnb calculator.
How Profitable is Airbnb in Palm Springs ?
As of October 2024, the average gross yield, which represents the annual income generated by a property as a percentage of its value, is 9.12% in Palm Springs. This figure suggests that short-term rentals in the city offer a favorable return on investment. Palm Springs is ranked #27 by return on investment on Airbnb rentals in the United States.
Property Tax
According to SmartAsset, the average property tax in Palm Springs is 0.94%. This relatively moderate tax rate is an important consideration for those looking to invest in short-term rental properties.
Hosts
The market is dominated by property management firms. The largest is Vacasa Florida with 4.56% of the total inventory and an average review of 4.77⭐️s .
Regulations
Palm Springs short-term rental regulations are somewhat investor-friendly, with different zoning regulations and limitations in place. Understanding these regulations is crucial for potential investors to ensure compliance and a smooth operation.
Top 200 Airbnb Rental Markets
Use our Airbnb comparison tool to instantly compare the top 200 short-term (Airbnb) rental markets in the US
Additional Information about Palm Springs
Median Household Income
The median household income in Palm Springs, CA, is an essential indicator of the local economic landscape. As of the available data, the specific median household income figure for Palm Springs is not provided.
Guests
The majority of the guests in Palm Springs come from California and are within driving distance. 17.00% of all guests are from Los Angeles followed by San Francisco with 4.90%.
Climate
Palm Springs enjoys a warm and arid climate, typical of the desert region. Summers are hot, with temperatures regularly exceeding 100°F (37.8°C). Winters are mild, with average daytime temperatures ranging between 70°F (21°C) and 80°F (26.7°C). The region is known for its abundant sunshine throughout the year, making it an appealing destination for visitors seeking warm weather.
Population Size
The population size of Palm Springs, CA, varies over time. As of the available data, the specific population figure for Palm Springs is not provided. However, the city is a popular tourist destination and attracts a substantial number of visitors each year.
Sports Teams and Colleges
Palm Springs hosts various sporting events and is home to the Palm Springs Power baseball team, an independent collegiate summer baseball team. In terms of colleges, Palm Springs does not have any universities within its immediate boundaries. However, there are several educational institutions and universities in the surrounding area.
Crime Rate
The specific crime rate figure for Palm Springs, CA, is not provided. However, like any city, Palm Springs has its own crime statistics, and it’s advisable for visitors and residents to stay informed about local safety measures and take necessary precautions.
Visitor Demographics and Attractions
Palm Springs attracts visitors from diverse locations. The total number of visitors to Palm Springs, CA, is not provided in the available data. However, the city’s appealing climate, natural beauty, and vibrant cultural scene entice tourists from both within the United States and internationally.
Some of the biggest tourist attractions in Palm Springs include:
- Joshua Tree National Park: Located nearby, this national park showcases stunning desert landscapes and unique Joshua trees.
- Palm Springs Aerial Tramway: Offering breathtaking views, the tramway takes visitors up the rugged cliffs of Chino Canyon to Mount San Jacinto State Park.
- Indian Canyons: These canyons are home to beautiful hiking trails, palm groves, and cultural sites of the Cahuilla Indians.
- Palm Springs Art Museum: This renowned museum features a diverse collection of art, including contemporary, modern, and Native American works.
- Coachella Valley Preserve: A natural oasis, this preserve offers opportunities for hiking, wildlife spotting, and exploring the Thousand Palms Oasis.
Peak Season in Palm Springs
Palm Springs experiences peak tourism during the winter months, particularly from November to April. Many visitors from colder climates flock to Palm Springs to escape the winter chill and enjoy the warm weather. During this time, the demand for (Airbnb) short-term rentals is typically high, resulting in increased occupancy rates and potential profitability for rental property owners.
Conclusion
Palm Springs, with its desirable climate, stunning landscapes, and vibrant tourism industry, presents a promising opportunity for short-term rental investments. Despite the -0.70% home depreciation, the market’s overall growth, high occupancy rates, and attractive average gross yield make Palm Springs an appealing destination for investors.
While the exact figures for median household income, population size, crime rate, and total number of visitors are not provided, they are crucial factors for individuals considering investments or visits to Palm Springs. With its diverse attractions and peak season in the winter months, Palm Springs continues to captivate visitors and provide an alluring environment for the short-term rental market.
