Crackdown on Short-Term Rentals Creates Opportunities for Home Buyers in Palm Springs

The crackdown on short-term rentals in Palm Springs, California, has created unexpected opportunities for buyers in the vacation home market. With the city capping the number of short-term rentals allowed in each neighborhood, many homeowners are now looking to sell their properties, leading to a softening of housing prices in sought-after areas.

According to reports from the Los Angeles Times and KTLA, over 5,900 homes in Palm Springs are registered as Airbnb and short-term rental properties, with ten neighborhoods exceeding the 20 percent limit set by the city. This crackdown has caused a ripple effect in the real estate market, with some homeowners facing foreclosure and significant drops in property values.

One high-demand neighborhood, Racquet Club Estates, has over 40 percent of homes classified as short-term rentals, leading to an influx of properties for sale in the area. These homes, designed by famed architect William Krisel, are averaging 1,700 square feet with three bedrooms and two baths, and are now available at reduced prices ranging from $1.5 million to $895,000.

Real estate agents in the area have noted the impact of the crackdown on the market, with some homes struggling to sell and values dropping by as much as 30 to 40 percent. However, not all areas are affected equally, and there are still buying opportunities for those looking to invest in Palm Springs real estate.

Overall, the changes in the market have created a mixed bag of outcomes for buyers and sellers in Palm Springs, with some facing challenges while others find potential opportunities in the shifting landscape of the vacation home market.