Palm Springs Real Estate Market Analysis

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Located in Southern California, Palm Springs is home to over 48,000 residents, making it the 4th largest city in the Coachella Valley. The city has seen a decent amount of population growth over the years. This growth in population is projected to continue, which is a good sign for real estate investors. And with 42% of the residents living in rental properties rather than owning their own home (according to NeighborhoodScout), buying a rental property in the Palm Springs housing market is a great option, especially when it comes to long-term rentals. 

Palm Springs enjoys a healthy economy that is mainly founded on the tourism industry. It is a popular tourist destination with a global reputation for first-class resorts and hotels, gourmet restaurants, eclectic shopping, upscale recreational opportunities, and unique architecture.  Due to its year-round hot weather and proximity to major cities in California, Palm Springs is also a popular winter getaway and retirement destination, especially for celebrities from Hollywood. The city has been gaining increasing popularity among younger generations, owing to its numerous festivals and international events such as the Palm Springs International Film Festival, and attractions such as the Palm Springs Aerial Tramway, the Living Desert Zoo and Gardens, and the Palm Springs Art Museum. An estimated 14 million tourists visited the Greater Palm Springs area in 2017, contributing more than $5.5 billion to the local economy. The city is, therefore, a great location for investing in short-term rental properties due to its heavy reliance on tourism. Other industries driving local economic growth include healthcare, retail trade, finance, construction, and manufacturing.


The Palm Springs real estate market benefits from robust business conditions. It is one of the two most active markets in the Coachella Valley. The revitalization of Downtown Palm Springs is seen as a catalyst to the city’s momentum: With development comes a better lifestyle, and a better lifestyle draws buyers and renters.

Palm Springs  Real Estate Investment Performance

Facts and Market Trends in Palm Springs
Homes For Sale299
Airbnb Properties2,251
Rental Properties298
Traditional Vacancy rate3.80%
Airbnb Occupancy Rate43.34%
Mashmeter33.00%
Median Price$720,000
Median Rent Price$4,822
Price/sqft$558
Median Days on Market74
Price to Rent Ratio24.3
Average Cap Rate
Airbnb3.65%
Traditional3.49%
Average Rental Income
Airbnb$5,537
Traditional$3,840
 
Median Household Income$61,597
Population45,019
Transportation in Palm Springs
35 / 100
Car-Dependent
30 / 100
Some Transit
46 / 100
Somewhat Bikeable
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Palm Springs  Rent Prices

RENTAL STRATEGY STUDIOS 1 BEDROOM 2 BEDROOMS 3 BEDROOMS 4 BEDROOMS
Airbnb$2,074$2,280$3,314$5,265$7,687
Traditional$1,417$1,714$2,760$4,608$3,840

Palm Springs, CA - Homes for Sale - Newly Listed

5300 E Waverly Drive #E8
Palm Springs, CA 92264
Palm Springs
Condo/Coop
2 beds2 baths768 sq.ft.
CAP RATE
Trad. 3.42%Airbnb 5.02%
1217 Celadon St
Palm Springs, CA 92262
Palm Springs
Single Family Residential
3 beds3 baths1,984 sq.ft.
CAP RATE
Trad. 1.68%Airbnb 1.49%
353 N Hermosa Dr #6C2
Palm Springs, CA 92262
Palm Springs
Condo/Coop
2 beds2 baths849 sq.ft.
CAP RATE
Trad. 5.53%Airbnb 4.72%
2448 S Sierra Madre
Palm Springs, CA 92264
Palm Springs
Condo/Coop
2 beds2 baths1,287 sq.ft.
CAP RATE
Trad. 2.97%Airbnb 2.45%

Top Performing Palm Springs Properties

2350 E Miramonte Cir #D
Palm Springs, CA 92264
Palm Springs
Condo/Coop
3 beds2 baths1,404 sq.ft.
CAP RATE
Trad. 6.17%Airbnb 7.03%
2252 N Indian Canyon Drive #B
Palm Springs, CA 92262
Palm Springs
Townhouse
3 beds2 baths1,344 sq.ft.
CAP RATE
Trad. 7.92%Airbnb 7.01%
6175 Montecito Drive #166
Palm Springs, CA 92264
Palm Springs
Condo/Coop
3 beds3 baths1,551 sq.ft.
CAP RATE
Trad. 7.90%Airbnb 6.92%
3940 E Mesquite Avenue
Palm Springs, CA 92264
Palm Springs
Single Family Residential
4 beds2 baths1,457 sq.ft.
CAP RATE
Trad. 3.12%Airbnb 6.79%

Recently Sold Homes in Palm Springs, CA

1448 Sunflower Circle #206
Palm Springs, CA 92262
Palm Springs
Condo/Coop
2 beds1 baths837 sq.ft.
CAP RATE
Trad. 3.48%Airbnb 3.66%
401 S El Cielo Rd #85
Palm Springs, CA 92262
Palm Springs
Condo/Coop
2 beds2 baths1,084 sq.ft.
CAP RATE
Trad. 6.41%Airbnb 5.81%
2601 S Broadmoor Drive #51
Palm Springs, CA 92264
Palm Springs
Condo/Coop
2 beds2 baths1,178 sq.ft.
CAP RATE
Trad. 3.32%Airbnb 2.77%
5300 E Waverly Drive #H4
Palm Springs, CA 92264
Palm Springs
Condo/Coop
1 beds1 baths705 sq.ft.
CAP RATE
Trad. 3.14%Airbnb 2.04%

Property Value Changes and Real Estate Appreciation in the Palm Springs Housing Market

The Palm Springs real estate market has witnessed a strong real estate appreciation in recent years. Since Q1 of 2000, Palm Springs properties have experienced a total appreciation of 146.89% according to NeighborhoodScout, which is an average annual home appreciation rate of 4.81%. Property value is still climbing in the Palm Springs housing market as Zillow reports an appreciation of 5.6% over the past year. This housing market trend is expected to continue, which makes Palm Springs a seller’s market with large opportunities for long-term return on investment.

Palm Springs, CA Top Multi Family Homes

435 E Chuckwalla Road
Palm Springs, CA 92262
Palm Springs
Multi Family
4 beds4 baths1,152 sq.ft.
CAP RATE
Trad. 1.80%Airbnb 4.02%
340 W Rosa Parks Road
Palm Springs, CA 92262
Palm Springs
Multi Family
4 beds2 baths1,680 sq.ft.
CAP RATE
Trad. 7.19%Airbnb N/A
803 N Palm Canyon Drive
Palm Springs, CA 92262
Palm Springs
Multi Family
beds baths0 sq.ft.
CAP RATE
Trad. 4.65%Airbnb N/A
1500 S Via Entrada
Palm Springs, CA 92264
Palm Springs
Multi Family
2 beds4 baths0 sq.ft.
CAP RATE
Trad. 4.14%Airbnb N/A

Homes Below Median Price in the Palm Springs, CA Real Estate Market

2350 E Miramonte Cir #D
Palm Springs, CA 92264
Palm Springs
Condo/Coop
3 beds2 baths1,404 sq.ft.
CAP RATE
Trad. 6.17%Airbnb 7.03%
2252 N Indian Canyon Drive #B
Palm Springs, CA 92262
Palm Springs
Townhouse
3 beds2 baths1,344 sq.ft.
CAP RATE
Trad. 7.92%Airbnb 7.01%
6175 Montecito Drive #166
Palm Springs, CA 92264
Palm Springs
Condo/Coop
3 beds3 baths1,551 sq.ft.
CAP RATE
Trad. 7.90%Airbnb 6.92%
3940 E Mesquite Avenue
Palm Springs, CA 92264
Palm Springs
Single Family Residential
4 beds2 baths1,457 sq.ft.
CAP RATE
Trad. 3.12%Airbnb 6.79%

Palm Springs Airbnb Growth and Regulations

With its booming tourism industry, Palm Springs has experienced major Airbnb growth over the years. In 2017, a total of 120,000 Airbnb guests stayed at Palm Springs short-term rentals, bringing a total revenue of $29 million to the local Airbnb hosts. 

Airbnb is legal in Palm Springs but there are some restrictions set by the city’s short-term rental ordinance. Airbnb Palm Springs hosts can choose to operate either a homeshare - i.e. renting out a bedroom(s) in their home for 28 days or less while residing on-site - or a vacation rental - i.e. renting out a non-owner occupied accommodation for 28 days or less.  Occupancy is limited to 2 adult guests overnight and 1 vehicle per bedroom. While homeshares do not have annual limits for guest stays, vacation rentals are limited to 36 guest stays per calendar year.


In order to legally operate a short-term rental, Airbnb Palm Springs hosts must obtain a city-issued Registration Certificate as well as a Transient Occupancy Tax Permit. As part of the operational requirements, the city requires a “responsible person” over the age of 25 to sign a contract with the operator, and the operator is required to personally meet and greet guests at their arrival to explain to them the local rules and regulations, in addition to obtaining a signature of receipt of the Statement of Rules and Regulations, also known as the Good Neighbor Brochure.

Palm Springs, CA Top Airbnb Homes

Entire home/apt · 4 beds
Two Bedroom Condo at Vista Mirage Resort
922
Entire home/apt · 1 bed
Cozy Warm-Sands Room
574

Palm Springs, CA Homes for Rent

1423 E San Lorenzo Road
Palm Springs, CA 92264
Palm Springs
Single Family
4 beds2 baths1,824 sq.ft.
1923 Marguerite Street
Palm Springs, CA 92264
Palm Springs
Single Family
3 beds2 baths1,584 sq.ft.

Palm Springs, CA Open Houses

1217 Celadon St
Palm Springs, CA 92262
Palm Springs
Single Family Residential
3 beds3 baths1,984 sq.ft.
CAP RATE
Trad. 1.68%Airbnb 1.49%
2448 S Sierra Madre
Palm Springs, CA 92264
Palm Springs
Condo/Coop
2 beds2 baths1,287 sq.ft.
CAP RATE
Trad. 2.97%Airbnb 2.45%
1827 E Racquet Club Road
Palm Springs, CA 92262
Palm Springs
Single Family Residential
4 beds3 baths2,237 sq.ft.
CAP RATE
Trad. 0.96%Airbnb 3.00%
2106 S Divot Ln
Palm Springs, CA 92264
Palm Springs
Single Family Residential
3 beds2 baths1,456 sq.ft.
CAP RATE
Trad. 3.57%Airbnb 3.30%

Best Palm Springs Neighborhoods for Buying Investment Property

Palm Springs
Palm Springs, CA
33%
Mashmeter
property price
800048
Median
cap rate
4.30%
Traditional
6.19%
Airbnb
rental income
$2,868
Traditional
$4,124
Airbnb
homes for sale
1
occupancy rate
45%
Airbnb
Other Housing Market Reports

All Palm Springs Neighborhoods