Airbnb Effect Changing SoCals Real Estate Market – Patch

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PALM SPRINGS, CA — It’s a great time to buy a home in Palm Springs…that is, if you plan on living on the property you purchase.

Housing prices are softening in sought-after neighborhoods after a crack-down on short-term rental properties, as permits have made it difficult for owners to keep their properties, a report from the Los Angeles Times recently shared.

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Palm Springs is one of Southern California’s favorite vacation cities, and over 5,900 of its homes across 66 neighborhoods are registered as Airbnb and short-term rental properties, according to recent reports from the LA Times and KTLA. Ten of those neighborhoods are over-permitted. Many homeowners in those areas who don’t have permits or face losing their permits are looking to sell.

For owners of short-term rental properties in Palm Springs, nightly rates can range from $200 to over $800 a night, according to the Airbnb website. Many rentals in the neighborhoods of Desert Park Estates, El Mirador, El Rancho Vista Estates, Gene Autry, Lawrence Crossley, Movie Colony East, Racquet Club Estates, Ranch Club Estates, Sunmor, and Vista Las Palmas are over the 20 percent limit, according to the Times report.

The Racquet Club Estates, considered a high-demand Palm Springs neighborhood, has over 40 percent of homes classified as short-term rentals, according to a KTLA report.

Patch took a closer look at the eight homes for sale in that area as of this report.

Each property averages 1,700 square feet, with three bedrooms and two baths, and all were built in the late 1950s, designed by famed architect William Krisel of the Alexander Construction Company. The majority of these homes were purchased in the pandemic market between 2020 and 2021, listings show.

Don’t be fooled if you buy a former short-term rental. Permits are not transferrable to new owners after the sale of the property, according to Palm Springs city ordinances.

Though the LA Times suggests that sales are down, homes are “languishing on the market for months,” as of Friday, the oldest Racquest Club East listing has been on the market 115 days. The newest property in that neighborhood just hit the market this week.

Current prices range from $1.5 million to $895,000, according to

Desert Sotheby’s International Realtor Craig Chorpenning discussed the changes to the market in the greater Palm Springs area with Patch.

“Overall sales activity is higher than it was a year ago, and what I see is that some speculative buyers got caught in a tough spot, where pricing normalized, and city regulation changed,” he said. “There are certain spots of the market that are softer than others. This creates some buying opportunities, but it’s not as widespread as the picture may be painted.”


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