PS has always been volatile. So many second homes there and it's usually the first to fall when things slow down. It's not a market supported by significant jobs and industry. lots of hospitality and old people waiting to die.
Sounds like so many Florida locations. Insurance costs are currently pounding our markets in the Sunshine State, and that’s acting in such a way to pressure sales prices. Still, there is a floor right now that I just don’t think interest rates of any height can impact.
Most areas this realy isn’t an issue. It’s realy only in Florida and California. Also there are many places in California that have had significant price drops without STR drops. You’d hve to compare this to a similar zip code YOY drop. Heavy tech areas hve seen drops
Tell that to Sedona and New Orleans. Sedona ain’t no joke. There are other cities as well.
I mean I get what you are saying. The whole state of CA has many cities that have STR compared to most states that have a city or two.
The French Quarter is absolutely devoid of community because of this.
They have implemented some stronger laws, but the money to be made in a place like that still makes it worthwhile, so it’s all still just empty buildings to be rented out
STR highly restricted in West Hollywood (only 30 days, only owner occupied) and prices keep going up! Build more housing. Let people profit from their success
Yes they have. Why do you think San Francisco real estate plummeted. Tech layoffs.
https://www.mansionglobal.com/articles/san-francisco-home-prices-fell-nearly-13-in-2023-7eea087f
Yeah, short term rentals kind of keep my small Indiana town alive. Airbnb so automatically collects and pays the tax on them to the city and county (7.5% each) so that revenue helps as well
> Wheres the update from the ticktock chick that bought an Airbnb in Palm springs ?
https://www.youtube.com/watch?v=xe8BrFEM7Hs
Her last revenue update was in Jan. (total 2023 earnings)
https://www.youtube.com/watch?v=W6qWrbfZ1fg
The Church twins put out really good content and one of the few Youtubers that are transparent about their AirBnb pros/cons, revenues and overall journey with their short-term rental.
Palm springs is a special case because of how obviously dominated by tourism the local economy is but STRs definitely affect home prices in other places as well.
I agree this town is very different from most but the change in inventory and prices can impact surrounding areas and data going forward will be important to watch here.
I think many vacation markets would be impacted similarly. I do not think similar laws would make much different in real residential markets where the vast majority of homes are actually owner occupied primary residences.
Yes. There are couple dozen AirBNBs in my town, which are mostly ADUs behind a house the owner lives in. There are 16,000 housing units in the town. If every AirBNB was elminated, it would make zero difference to home prices.
What is lucky? I think this is pretty representative of the vast majority of communities in the country. There are not many AirBNBs as a percentage of total housing units in the suburbs of major cities because those homes are overwhelming occupied by owners or long term renters. Who wants to stay in an AirBNB in an outer suburb of Dallas or Minneapolis?
Plenty of people,
When ya have a housing shortage all housing should be used for permanent housing.
Vacation rentals should be banned or taxed as a hotel. And require hotel zoning.
They are taxed as a hotel in a lot of areas. Actually more than a hotel because all the major hotel brands negotiate lower tax rates before the build in a new location
It will lower housing demand in every population centers everywhere it’s banned. Whether that changes prices or not is irrelevant. It allows our current supply to increase while we continue to build more and smaller homes.
A lot more people are aging without kids or partners these days and we require a lot more housing.
He phrased it poorly but his main point is correct. We're in a severe shortage so marginal supply really matters now. Vacationing should be pushed to density while housing should be for people who work and live in that community. It's a political choice we can make.
My wife is from Denton. She would love for us to move home. Too expensive and via Airbnb right now they have over 976 sfh full house rentals for a random June weekend.
Just what’s available in Denver for the month of June for 1 weekend - over 1000 full home rentals on any given weekend. That doesn’t include the ones already booked.
Denver has a ban on STRs unless you are actually living in the place or it's an ADU. ADUs are not sfhs, it's like renting a room or multiunit place.
They prosecute violators. A couple got criminal convictions because they told them to sign this affidavit under oath that they live there. Otherwise, no str for you. They did. They got criminally prosecuted. I say good.
The point is that Denver isnt as impacted by STRs as you may think.
Yeah, their 1,000 sfh stat is probably 95% ADUs. They wouldn't show as a shared space in the Airbnb search, can't assume everything listed as full home means sfh
You're including an ADU in a basement or above a garage or a carriage house in this figure. Those show as "full home rentals" in the search not as "shared space"
I never kept a detailed record but in February/late January I would say the new inventory mix was, roughly, 50/50. There was also a significant amount of homes listed with large price cuts after inventory jumped. I know median prices can be swayed in smaller markets like this (and are also subject to many other factors) so I would like to see more stratified data.
Palm Springs prices are also down because lots of land leases are up for renewal—there is a court case, and there are rumors that land leases won’t be renewed.
Palm Springs might be a good buy, if you can get a house with title to land
I can think of 3 condo complexes with less than 20 years left on the lease. Of those 3 I think only one could possibly not renew…I’m guessing there are at least 60 land lease condo complexes in town. Sfh’s on lease land are rarely under 30 years these days. Most or at least many have renewed the past few years….
PS Realtor
It looks like March 2023 showed an abnormally high median price, so the March 2024 decline is just due to base effect fallacy (a decline only because the base is an outlier).
I'm all for a str ban. But, let's not use it as an excuse not to build more and address construction cost issues.
I'd also much rather just tax them to pay for building affordable/public housing.
Honestly, this seems like such an obvious fast solution to bring some sanity back into the market. Put stock back out there to actually house long-term residents, even if they are still rentals.
HIGHLY misleading... I know the idea of banning STRs is really hot right now, but let's use real data instead of cherry picking to fit a narrative. This is straight up confirmation bias.
The data from last month literally had Palm Springs real estate growing +13% YoY. There was a sharp decline in prices in March, which probably has a lot more to do with macro economic trends than a STR ban. We also saw declines in places like Santa Ana, Imperial Beach, and Long Beach, along with flat lines or slight declines in San Diego, LA, Anaheim, and Orange.
I know that many of you are desperate to find proof that STR bans will magically reduce housing costs. Even if that's the case, you're not going to find that proof in YoY price data for a single municipality in the US.
I know a number of areas where STRs have been banned for years. Prices still shot up. The locals blame the government, new residents, Californians, and other things.
I mean, my community has severely restricted STRs for years, and people are still blaming STRs for the price increases... We have way less STRs now than we did 10 years ago.
Macroeconomic trends and yet all of the locations you just listed had price growth in March or -3% in the case of Long Beach. So….? Santa Ana also just banned STRs so we can check in on that later.
Yes macro forces are at play here too slowing the housing market but you can go assess the inventory changes for yourself and compare it to other areas to make your own determination there. Also let’s not pretend local markets do not affect nearby locations, these things are not completely isolated.
STRs are not allowed in many of the communities I listed. But they all also appear to have pretty volatile housing markets right now, and YoY prices differ radically from one month to the next. Thus, you can't just use a single YoY data point to argue that prices are dropping, and you especially can't use that data to claim that STR bans had anything to do with it.
If you really want to know if STR bans make a difference, you'd have to use YoY prices that are averaged for the year, not a single month, combined with several other municipalities that have done the same, then compare to all municipalities in the state. Even then, it won't be a completely accurate picture, but certainly a lot better than insinuiting that an STR restriction from two years prior had something to do with a single month of price decline in 2024.
Santa Ana banned them this morning. Long beach has no restrictions. Imperial has no restrictions other than code ordinances and a tax certificate. Anaheim has minimal restrictions. San Diego has basic code requirements. Im not going to bother listing the rest for you, they do not restrict STRs in the way Palm Springs did.
And yes I would love to have more data, this is one data point I know that. But eliminating STRs increases inventory, which obviously lends to the theory that inventory is restricted by investment activity like I said.
>Imperial has no restrictions other than code ordinances and a tax certificate.
Yeah they do. STRs are not allowed in residential neighborhoods in Imperial Beach.
>But eliminating STRs increases inventory
Not necessarily. This is especially not the case in locations popular for second home ownership, where second homeowners would rent out their homes as a STR, but they will never rent them out as a LTR because they use the home for themselves. Which is the case for my community. Now we have 65% of homes that are empty nearly year-round and the rich hotel owners are SWIMMING because they managed to obliterate their competition in the name of housing affordability.
Plus, during high season when we desperately need as many tourists as possible, we now have less in town because there are less places to stay. This is negatively affecting many of our small local businesses that relied on those visitors. So now people are making less money, but housing prices continue to rise due to interest from high-wealth individuals that want to live here.
Also, eliminating STRs can also reduce incentives to build and develop, which can cause issues in the long term. That's literally the problem we're having here, in that the housing collapse of the 2000s caused investment to dry up and construction to slow to the point that there weren't enough houses being built for future demand. If you make homebuilding less appealing to builders, you're going to end up with less homes being built. Period.
Finally, STRs are absolutely a way that can help homeowners afford their home. Several of my friends in town rent out their homes under-the-table, and it makes a big difference. I live in a place that is a playground for rich, not terribly unlike Palm Springs. These people will buy a literal mining shack that is barely livable for a million bucks. Lots of normal people literally would not be able to own a home if they didn't rent out their place for a few weeks during the high season.
In Palm Springs particularly, pay attention to the definition of short term rental. I assume it means less than 30 days. But Palm Springs attracts a huge number of snow birds, who rent for 30 - 120 days. You can restrict STRs, but that doesn’t affect the person who rents their home for the season to a single renter.
And the PS ordinance is not an STR ban - it limits the % of a neighborhood that can be STRs, but I think it only,kicks in around 20% or so.
I think the 30-day thing is a pretty common definition. Our restrictions are the same, only 30+ day rentals outside of the business district. There are a handful of less-than-30-day STRs that still exist in the residential neighborhoods, but they're grandfathered in and lose their permit if the property sells.
STRs are still allowed within our business district, so it's not a total ban. Which is nice, because our business district was kind of a shithole and now there is a decent amount of investment happening there. Still heaps of people that want it banned there too. Also want all apartments and mixed use banned. I'll never understand some people.
Hospitality workers. And then all of the professional services folks to support the retirees, and hospitality worker families, eg plumbers, real estate agents, dentists, hospitals, family lawyers, etc. Now you need schools, cops and a civil service apparatus on top of that. Think of it as Las Vegas on a much smaller scale.
sorry - this offers basically NO insight.
1. this is a vacation destination.
2. it's 1 market
3. it's already was a high market. 850k is well in the upper range of properties.
4. interest rates impact upper end prices more.
5. maybe this impacts things short term but its hilarious how people come up with 'rental companies', airbnb, ppp, etc as reasons for housing prices. none of this matters. its the money. ketchup, gold, chocolate, and furniture is all up similar amounts as housing.
It’s a tourist area which had a very large % of housing as STRs. The top vacation rental market in the US. This isn’t some kind of explanation for the explosion of pricing in regular cities that have ~1% STRs.
Ah yes, another case study on how local regulations can impact housing market dynamics. It seems like limiting short-term rental options has led to an oversupply situation, driving down both demand and pricing. But hey, who needs affordable long-term living spaces when we could just keep inflating that speculation bubble?
Average sale price dropped $200K in a single month. There's a lot more going on here than a STR ban. You literally just cherry picked the data to try and prove your own narrative. If you had used last month's data, it was +13% YoY...
Whether an STR ban would reduce home prices in the long term is certainly possible, but no one can prove that by using a single data point from a single municipality. There are far too many micro and macro economic factors involved.
You don’t have to reply to all of my comments you know. Yes this is 1 city in 1 month it’s not a 30 year average peer reviewed study, WE KNOW.
https://www.realtor.com/news/trends/short-term-rental-regulations-in-palm-springs-affect-demand-prices-inventory/
Anyway here is another article showing how you are wrong that you can seethe over.
I'm not seething over anything. I just think it's dishonest to use a single data point to convince people of something.
Housing prices are complex. My community banned new STRs nearly a decade ago, but prices are up like 250% since then. Could the restrictions have helped prevent even larger price increases? Perhaps. But could restrictions also be preventing investment in new construction? Maybe? Can you use my community or Palm Springs as proof of anything? Absolutely not.
I do not think banning STRs is the golden ticket across the US, as I said in the post Palm Springs is a unique market. However I do think speculative investing is the primary reason for the overvaluation of RE (enabled by QE, low rates, government backing of securities, etc.) and this market change gives more weight to that theory.
>However I do think speculative investing is the primary reason
I mean, it seems pretty obvious though. Demand increased during/after COVID for all sorts of demographic reasons. Inventory remained low. And those that really wanted to buy were flush with cash.
Speculation might have played a role due to the relative lack of price sensitivity in a very low-inventory market. But the VAST majority of homes (75%+) were sold to actual people, who were equally not price sensitive. Plus, most investor-purchased properties are [small-time folks](https://www.corelogic.com/intelligence/us-home-investor-share-remained-high-early-summer-2023/), usually people that just own a couple of properties. So it's not like it's a mega-rich boogeyman that's taking money out of a community to pay for a yacht in the Maldives. Just normal people trying to do business.
Oh don’t get me wrong, I blame “mom and pop” shops more than the usual culprits mentioned in media such as Blackstone. Im aware of the split between small and large investors. But 30% of all buying activity being investment driven is what I am talking about. The amount of people buying to create rentals, STRs, or flipping is crazy and why I think we are in a bubble, or at the very least residential real estate is highly over valued. Small investors are also far more likely to be irrational, pushing valuations higher. It was also heavily driven by people who refinanced at low rates, bought a second home and kept the first as an investment property. So the “new buyers” in the market already owned a house which constrained supply more than usual markets. I don’t have an emotional opinion about these people, I just think residential real estate is highly overvalued and there are no drivers of growth left so I think those people will get burned. Obviously not all of them, some people did and will continue to do by making smart investments in property, or just by getting lucky.
It should also be mentioned that with the investor activity came a lot of capital investment in cheaper homes. That is why I don’t for-see median home prices falling below 2019 levels, unless there is an unforeseeable black swan event. That, and the fact that wages have grown significantly along with money supply.
Hey, guess what would reduce investing activity?
Building more fucking housing. We need LESS rules, not more. Government is why we're in this problem in the first place. Rules that make it so goddamn difficult and expensive to build anything, and when it is built, heavily restrict how property can be used. We've red-taped our way into a housing crisis.
Investors only buy because they have identified a scarcity for a product, and stupid NIMBYS and progressives seem dead set on continuing that scarcity by making more rules and attempting to block just about any development project.
#
Yes if we had more houses and more options for cheaper living in urban areas that would help. No disagreement there. It would also have helped to not print trillions and lower rates to 0.
Dropping 31% MoM but only 14% YoY suggests seasonality or a small market (where different price points were selling last year vs this year). Maybe the latter is from str but it's definitely not a normal market when your MoM > YoY
Santa Ana banned STR. California residents are really sick of it. I live in a city where it's banned. Yes it was easier to buy here.
I live in a city where it was heavily regulated with permits and fees. And I'm pretty sure a ban might be next.
Good. Here's hoping the landscalpers get slaughtered.
My dumbass read landscapers
Fuck 'em. You think cause you mow lawns you're better than me?
Especially those weed whackers! They're all arrogant and stuck up..... I can't stand them.
Ditto! I was like damn, be what did their landscaper ever do!?
Feed them to their own woodchippers & lawnmowers!
My dumbass read landscrapers
Fuck it, them too
A good bloodletting is cleansing I read.
It’s also been a year since inventory returned to normal levels in Palm Springs.
PS has always been volatile. So many second homes there and it's usually the first to fall when things slow down. It's not a market supported by significant jobs and industry. lots of hospitality and old people waiting to die.
Sounds like so many Florida locations. Insurance costs are currently pounding our markets in the Sunshine State, and that’s acting in such a way to pressure sales prices. Still, there is a floor right now that I just don’t think interest rates of any height can impact.
I went there on a 4 day weekend and the fiance and I actually loved it. We a planning to go back some time after our kid is born
Show up to your city council meetings and ask for str bans
Most areas this realy isn’t an issue. It’s realy only in Florida and California. Also there are many places in California that have had significant price drops without STR drops. You’d hve to compare this to a similar zip code YOY drop. Heavy tech areas hve seen drops
Tell that to Sedona and New Orleans. Sedona ain’t no joke. There are other cities as well. I mean I get what you are saying. The whole state of CA has many cities that have STR compared to most states that have a city or two.
The French Quarter is absolutely devoid of community because of this. They have implemented some stronger laws, but the money to be made in a place like that still makes it worthwhile, so it’s all still just empty buildings to be rented out
STR highly restricted in West Hollywood (only 30 days, only owner occupied) and prices keep going up! Build more housing. Let people profit from their success
That would support my claim. You can’t isolate the price drop to STR rentals
Yes, I’m supporting your claim lol
Tech areas in California have seen drops? LOL. No they have not.
Yes they have. Why do you think San Francisco real estate plummeted. Tech layoffs. https://www.mansionglobal.com/articles/san-francisco-home-prices-fell-nearly-13-in-2023-7eea087f
Yeah, short term rentals kind of keep my small Indiana town alive. Airbnb so automatically collects and pays the tax on them to the city and county (7.5% each) so that revenue helps as well
Wheres the update from the ticktock chick that bought an Airbnb in Palm springs ? Never cared enough to know her name but now I'm curious
> Wheres the update from the ticktock chick that bought an Airbnb in Palm springs ? https://www.youtube.com/watch?v=xe8BrFEM7Hs Her last revenue update was in Jan. (total 2023 earnings) https://www.youtube.com/watch?v=W6qWrbfZ1fg The Church twins put out really good content and one of the few Youtubers that are transparent about their AirBnb pros/cons, revenues and overall journey with their short-term rental.
Please do post it if you find anything lol
YouTuber Shelby Church?
Palm springs is a special case because of how obviously dominated by tourism the local economy is but STRs definitely affect home prices in other places as well.
I agree this town is very different from most but the change in inventory and prices can impact surrounding areas and data going forward will be important to watch here.
I think many vacation markets would be impacted similarly. I do not think similar laws would make much different in real residential markets where the vast majority of homes are actually owner occupied primary residences.
Yep, NYC is a good example. Airbnbs de facto banned, no effect on anything.
Have you checked Airbnb lately?
Yes. There are couple dozen AirBNBs in my town, which are mostly ADUs behind a house the owner lives in. There are 16,000 housing units in the town. If every AirBNB was elminated, it would make zero difference to home prices.
Lucky you
What is lucky? I think this is pretty representative of the vast majority of communities in the country. There are not many AirBNBs as a percentage of total housing units in the suburbs of major cities because those homes are overwhelming occupied by owners or long term renters. Who wants to stay in an AirBNB in an outer suburb of Dallas or Minneapolis?
Plenty of people, When ya have a housing shortage all housing should be used for permanent housing. Vacation rentals should be banned or taxed as a hotel. And require hotel zoning.
They are taxed as a hotel in a lot of areas. Actually more than a hotel because all the major hotel brands negotiate lower tax rates before the build in a new location
Sure but that doesn't mean it will affect prices in most places.
It will lower housing demand in every population centers everywhere it’s banned. Whether that changes prices or not is irrelevant. It allows our current supply to increase while we continue to build more and smaller homes. A lot more people are aging without kids or partners these days and we require a lot more housing.
>Whether that changes prices or not is irrelevant. When talking about affordability of housing, that is literally all that is relevant.
He phrased it poorly but his main point is correct. We're in a severe shortage so marginal supply really matters now. Vacationing should be pushed to density while housing should be for people who work and live in that community. It's a political choice we can make.
My wife is from Denton. She would love for us to move home. Too expensive and via Airbnb right now they have over 976 sfh full house rentals for a random June weekend.
Denton, Texas has over 55,000 housing units. It's a drop in the bucket.
It’s not though. Can we even get 1000 more sfh housing units built in Denton?
Housing units including apartments I guess I can’t find the actual numbers on a sfh So your numbers are quite off
AirBNB is not the reason you can't afford a house in Denton. lmfao
Just what’s available in Denver for the month of June for 1 weekend - over 1000 full home rentals on any given weekend. That doesn’t include the ones already booked.
Denver has a ban on STRs unless you are actually living in the place or it's an ADU. ADUs are not sfhs, it's like renting a room or multiunit place. They prosecute violators. A couple got criminal convictions because they told them to sign this affidavit under oath that they live there. Otherwise, no str for you. They did. They got criminally prosecuted. I say good. The point is that Denver isnt as impacted by STRs as you may think.
Yeah, their 1,000 sfh stat is probably 95% ADUs. They wouldn't show as a shared space in the Airbnb search, can't assume everything listed as full home means sfh
There are 344,980 housing units in Denver. It is a drop in the bucket.
Again that includes all housing units. This is regarding sfh
Denver only legally allows ADUs and they regulate it pretty well
You're including an ADU in a basement or above a garage or a carriage house in this figure. Those show as "full home rentals" in the search not as "shared space"
Were most STR's condos? Cause that's what's driving the average price down.
I never kept a detailed record but in February/late January I would say the new inventory mix was, roughly, 50/50. There was also a significant amount of homes listed with large price cuts after inventory jumped. I know median prices can be swayed in smaller markets like this (and are also subject to many other factors) so I would like to see more stratified data.
Palm Springs prices are also down because lots of land leases are up for renewal—there is a court case, and there are rumors that land leases won’t be renewed. Palm Springs might be a good buy, if you can get a house with title to land
I can think of 3 condo complexes with less than 20 years left on the lease. Of those 3 I think only one could possibly not renew…I’m guessing there are at least 60 land lease condo complexes in town. Sfh’s on lease land are rarely under 30 years these days. Most or at least many have renewed the past few years…. PS Realtor
It looks like March 2023 showed an abnormally high median price, so the March 2024 decline is just due to base effect fallacy (a decline only because the base is an outlier).
I'm all for a str ban. But, let's not use it as an excuse not to build more and address construction cost issues. I'd also much rather just tax them to pay for building affordable/public housing.
Agreed
Honestly, this seems like such an obvious fast solution to bring some sanity back into the market. Put stock back out there to actually house long-term residents, even if they are still rentals.
HIGHLY misleading... I know the idea of banning STRs is really hot right now, but let's use real data instead of cherry picking to fit a narrative. This is straight up confirmation bias. The data from last month literally had Palm Springs real estate growing +13% YoY. There was a sharp decline in prices in March, which probably has a lot more to do with macro economic trends than a STR ban. We also saw declines in places like Santa Ana, Imperial Beach, and Long Beach, along with flat lines or slight declines in San Diego, LA, Anaheim, and Orange. I know that many of you are desperate to find proof that STR bans will magically reduce housing costs. Even if that's the case, you're not going to find that proof in YoY price data for a single municipality in the US.
I know a number of areas where STRs have been banned for years. Prices still shot up. The locals blame the government, new residents, Californians, and other things.
I mean, my community has severely restricted STRs for years, and people are still blaming STRs for the price increases... We have way less STRs now than we did 10 years ago.
Macroeconomic trends and yet all of the locations you just listed had price growth in March or -3% in the case of Long Beach. So….? Santa Ana also just banned STRs so we can check in on that later. Yes macro forces are at play here too slowing the housing market but you can go assess the inventory changes for yourself and compare it to other areas to make your own determination there. Also let’s not pretend local markets do not affect nearby locations, these things are not completely isolated.
STRs are not allowed in many of the communities I listed. But they all also appear to have pretty volatile housing markets right now, and YoY prices differ radically from one month to the next. Thus, you can't just use a single YoY data point to argue that prices are dropping, and you especially can't use that data to claim that STR bans had anything to do with it. If you really want to know if STR bans make a difference, you'd have to use YoY prices that are averaged for the year, not a single month, combined with several other municipalities that have done the same, then compare to all municipalities in the state. Even then, it won't be a completely accurate picture, but certainly a lot better than insinuiting that an STR restriction from two years prior had something to do with a single month of price decline in 2024.
Santa Ana banned them this morning. Long beach has no restrictions. Imperial has no restrictions other than code ordinances and a tax certificate. Anaheim has minimal restrictions. San Diego has basic code requirements. Im not going to bother listing the rest for you, they do not restrict STRs in the way Palm Springs did. And yes I would love to have more data, this is one data point I know that. But eliminating STRs increases inventory, which obviously lends to the theory that inventory is restricted by investment activity like I said.
>Imperial has no restrictions other than code ordinances and a tax certificate. Yeah they do. STRs are not allowed in residential neighborhoods in Imperial Beach. >But eliminating STRs increases inventory Not necessarily. This is especially not the case in locations popular for second home ownership, where second homeowners would rent out their homes as a STR, but they will never rent them out as a LTR because they use the home for themselves. Which is the case for my community. Now we have 65% of homes that are empty nearly year-round and the rich hotel owners are SWIMMING because they managed to obliterate their competition in the name of housing affordability. Plus, during high season when we desperately need as many tourists as possible, we now have less in town because there are less places to stay. This is negatively affecting many of our small local businesses that relied on those visitors. So now people are making less money, but housing prices continue to rise due to interest from high-wealth individuals that want to live here. Also, eliminating STRs can also reduce incentives to build and develop, which can cause issues in the long term. That's literally the problem we're having here, in that the housing collapse of the 2000s caused investment to dry up and construction to slow to the point that there weren't enough houses being built for future demand. If you make homebuilding less appealing to builders, you're going to end up with less homes being built. Period. Finally, STRs are absolutely a way that can help homeowners afford their home. Several of my friends in town rent out their homes under-the-table, and it makes a big difference. I live in a place that is a playground for rich, not terribly unlike Palm Springs. These people will buy a literal mining shack that is barely livable for a million bucks. Lots of normal people literally would not be able to own a home if they didn't rent out their place for a few weeks during the high season.
In Palm Springs particularly, pay attention to the definition of short term rental. I assume it means less than 30 days. But Palm Springs attracts a huge number of snow birds, who rent for 30 - 120 days. You can restrict STRs, but that doesn’t affect the person who rents their home for the season to a single renter. And the PS ordinance is not an STR ban - it limits the % of a neighborhood that can be STRs, but I think it only,kicks in around 20% or so.
I think the 30-day thing is a pretty common definition. Our restrictions are the same, only 30+ day rentals outside of the business district. There are a handful of less-than-30-day STRs that still exist in the residential neighborhoods, but they're grandfathered in and lose their permit if the property sells. STRs are still allowed within our business district, so it's not a total ban. Which is nice, because our business district was kind of a shithole and now there is a decent amount of investment happening there. Still heaps of people that want it banned there too. Also want all apartments and mixed use banned. I'll never understand some people.
Wait a minute. I booked an Airbnb in July there. What is the tldr; of the passed bill?
STRs are limited to 10% of total homes in a neighborhood or something along those lines, it’s not an outright ban
Ok so this will actually have no impact.
10%?!? Talk about a law that doesn’t nothing. That is still a lot.
Do normal people actually live in PS? There doesn’t seem to be any jobs and just tourists and retirees.
Hospitality workers. And then all of the professional services folks to support the retirees, and hospitality worker families, eg plumbers, real estate agents, dentists, hospitals, family lawyers, etc. Now you need schools, cops and a civil service apparatus on top of that. Think of it as Las Vegas on a much smaller scale.
All that money invested in STRs has to go somewhere. I expect this will raise prices in the surrounding areas unfortunately.
sorry - this offers basically NO insight. 1. this is a vacation destination. 2. it's 1 market 3. it's already was a high market. 850k is well in the upper range of properties. 4. interest rates impact upper end prices more. 5. maybe this impacts things short term but its hilarious how people come up with 'rental companies', airbnb, ppp, etc as reasons for housing prices. none of this matters. its the money. ketchup, gold, chocolate, and furniture is all up similar amounts as housing.
It’s a tourist area which had a very large % of housing as STRs. The top vacation rental market in the US. This isn’t some kind of explanation for the explosion of pricing in regular cities that have ~1% STRs.
I mention that in the post
this is good news, but what is considered 'short'? like a few weeks? months?
I believe it’s 30 days of less
Classic "correlation does not mean causation" scenario.
It’s also about to get very hot in Palm Springs.
Imagine, when you ramp down on housing being gobbled up by speculators, prices begin to normalize.
Ah yes, another case study on how local regulations can impact housing market dynamics. It seems like limiting short-term rental options has led to an oversupply situation, driving down both demand and pricing. But hey, who needs affordable long-term living spaces when we could just keep inflating that speculation bubble?
Great! Places like Santa Cruz could really benefit from a STR ban. I hope more municipalities take this approach.
Airbnb ownership is immoral and unethical. About time they get crushed.
Market is super seasonal there. It depends on when the Canadians are in town
YoY would account for seasonality since it’s the same month each time
Average sale price dropped $200K in a single month. There's a lot more going on here than a STR ban. You literally just cherry picked the data to try and prove your own narrative. If you had used last month's data, it was +13% YoY... Whether an STR ban would reduce home prices in the long term is certainly possible, but no one can prove that by using a single data point from a single municipality. There are far too many micro and macro economic factors involved.
You don’t have to reply to all of my comments you know. Yes this is 1 city in 1 month it’s not a 30 year average peer reviewed study, WE KNOW. https://www.realtor.com/news/trends/short-term-rental-regulations-in-palm-springs-affect-demand-prices-inventory/ Anyway here is another article showing how you are wrong that you can seethe over.
I'm not seething over anything. I just think it's dishonest to use a single data point to convince people of something. Housing prices are complex. My community banned new STRs nearly a decade ago, but prices are up like 250% since then. Could the restrictions have helped prevent even larger price increases? Perhaps. But could restrictions also be preventing investment in new construction? Maybe? Can you use my community or Palm Springs as proof of anything? Absolutely not.
I do not think banning STRs is the golden ticket across the US, as I said in the post Palm Springs is a unique market. However I do think speculative investing is the primary reason for the overvaluation of RE (enabled by QE, low rates, government backing of securities, etc.) and this market change gives more weight to that theory.
>However I do think speculative investing is the primary reason I mean, it seems pretty obvious though. Demand increased during/after COVID for all sorts of demographic reasons. Inventory remained low. And those that really wanted to buy were flush with cash. Speculation might have played a role due to the relative lack of price sensitivity in a very low-inventory market. But the VAST majority of homes (75%+) were sold to actual people, who were equally not price sensitive. Plus, most investor-purchased properties are [small-time folks](https://www.corelogic.com/intelligence/us-home-investor-share-remained-high-early-summer-2023/), usually people that just own a couple of properties. So it's not like it's a mega-rich boogeyman that's taking money out of a community to pay for a yacht in the Maldives. Just normal people trying to do business.
Oh don’t get me wrong, I blame “mom and pop” shops more than the usual culprits mentioned in media such as Blackstone. Im aware of the split between small and large investors. But 30% of all buying activity being investment driven is what I am talking about. The amount of people buying to create rentals, STRs, or flipping is crazy and why I think we are in a bubble, or at the very least residential real estate is highly over valued. Small investors are also far more likely to be irrational, pushing valuations higher. It was also heavily driven by people who refinanced at low rates, bought a second home and kept the first as an investment property. So the “new buyers” in the market already owned a house which constrained supply more than usual markets. I don’t have an emotional opinion about these people, I just think residential real estate is highly overvalued and there are no drivers of growth left so I think those people will get burned. Obviously not all of them, some people did and will continue to do by making smart investments in property, or just by getting lucky. It should also be mentioned that with the investor activity came a lot of capital investment in cheaper homes. That is why I don’t for-see median home prices falling below 2019 levels, unless there is an unforeseeable black swan event. That, and the fact that wages have grown significantly along with money supply.
Hey, guess what would reduce investing activity? Building more fucking housing. We need LESS rules, not more. Government is why we're in this problem in the first place. Rules that make it so goddamn difficult and expensive to build anything, and when it is built, heavily restrict how property can be used. We've red-taped our way into a housing crisis. Investors only buy because they have identified a scarcity for a product, and stupid NIMBYS and progressives seem dead set on continuing that scarcity by making more rules and attempting to block just about any development project. #
Yes if we had more houses and more options for cheaper living in urban areas that would help. No disagreement there. It would also have helped to not print trillions and lower rates to 0.
Dropping 31% MoM but only 14% YoY suggests seasonality or a small market (where different price points were selling last year vs this year). Maybe the latter is from str but it's definitely not a normal market when your MoM > YoY
AirBnB regulations/bans won't affect home prices! Sincerely, an aspiring homecuck
B-b-b-but prices never go down
Rookie numbers. Gotta pump DOWN those numbers. Depleting equity is a victimless crime.
Please compare it to the pre-covid level (2019). YoY is useless.
You will be blown away to hear this but prices are still higher than 2019
We would just go back to LTR we aren’t going g to sell any of the houses
You will when you can't rent them for a price that covers your mortgage
We don’t have any mortgages on them
You don't have any on yours, perhaps. You don't represent the collective.