(Gross Yields from 12.71%, $359 Average Daily Rate)
Quick Facts
Population – City – 47,897 (2020) according to US Census Bureau
- MacroTrends states that Palm Springs is currently growing at a rate of 1.88% annually since 2021. As a benchmark, FreddieMac states that US cities grow at an average 0.3%.
- Home to Coachella and Stagecoach Festivals
Cost of Living: Payscale ranks the cost of living in Palm Springs to be 22% higher than the national average. Palm Springs also has 50% higher housing expenses than the national average.
Active Rentals
There are 3896 active rentals in Palm Springs. Almost 78% of all listings are 1 and 2 bedrooms.
Larger homes catering to bigger parties and families are potentially undersupplied. There are only 539 active 4 & 5-bedroom homes.
Average Daily Rate (Nightly Price)
The Average Daily Rate for rentals in Palm Springs is $359 dollars.
Throughout the year, the rate fluctuates by $37 from that average with the highest Average Daily in November ($396) and the lowest in July ($349).
Occupancy Rate
Occupancy Rates in Palm Springs, California are the highest in the summer. The Occupancy Rate at an annual level is 57%.
The lowest occupancy rate was in February (81%) and the highest was in June (52%). Drop-in occupancy rates in January and December of 2021 can be partially explained by a surge in COVID cases.
High-Performance Properties
Chalet’s research shows that 3 bedroom homes have the highest percentage of homes in high yield territory (19.08%) therefore could be a good strategy for this market.
Studios do not have enough samples to be considered (only 2 active listings).
Chalet considers properties with a gross yield greater than 15% as high yield properties. Gross yield equals Gross Income/Purchase Price
Demand
The majority of the Palm Springs short-term rental guests are domestic guests from the United States, though February is when the presence of international guests is most noticeable.
International guests in February barely crossed the 7% threshold of total guests. The majority of international guests visit from Canada, the United Kingdom, Australia, Germany, and France.
The majority of Palm Springs guests come from U.S. cities located within driving distance. Almost 18% of all guests in Palm Springs are from Los Angeles. We expect drive-to locations/cities to continue to do well in the post-covid world.
Other Facts
Riverside County has an effective property tax rate of 0.95%. That’s slightly lower than the 1.07% national average. Source: SmartAsset.
According to Zillow, homes in Palm Springs appreciated 34.6% year-over-year (YoY) and the median home price for active listings was $657,171 (as of March 2022).
Homes in Palms Springs average about 29 days on the market according to Redfin.
The BLS reported that the unemployment rate in Riverside County fell to 5.7% in January of 2022, which is higher than the national average of 3.8%.
Short-Term Rental Regulation
See Chalet’s detailed analysis of short-term rental regulation in Palm Springs.
