Joshua Tree Was California’s Hottest Housing Market. Now It’s Cooling Down.

Home values in the desert communities saw some of the largest gains during the pandemic-led housing rush. Now, they've fallen from their peaks. By Libertina Brandt and Jessica Flint April 9, 2024 Tap story

The Joshua Tree area was the state’s hottest real-estate market during the pandemic . Located about 40 miles from tony Palm Springs, the mountainous region has long drawn home buyers for its affordable real estate and artsy, secluded lifestyle. Olivia Alonso Gough for The Wall Street Journal

Typical home value in Joshua Tree, July 2022 $467,348 according to the Zillow Home Values Index. The typical home value in Joshua Tree was $217,007 in July 2020 . Olivia Alonso Gough for The Wall Street Journal { "selector": ".wsj--ani-text-fade", "duration": "2s", "easing": "ease-out", "keyframes": [ {"opacity": "0"}, { "opacity": "1"} ] }

Typical home value in Joshua Tree Source: Zillow Home Value Index “During the pandemic, we saw the biggest real-estate boom in recent history and some home values jumped to unsustainable highs,” local real-estate agent Bryan Wynwood said.

Anna Deen/The Wall Street Journal Source: National Park Service The Joshua Tree area includes Joshua Tree National Park as well as the communities of Joshua Tree, Twentynine Palms, Yucca Valley and Landers.

Over the years, the wealthy have built architecturally significant homes there, such as the Kellogg Doolittle House , which resembles a fossil. However, most homes in the area are modest, with few amenities. Olivia Alonso Gough for The Wall Street Journal Read the full story

Since the onset of the pandemic, Joshua Tree National Park has grown in popularity: In 2021 it surpassed 3 million visitors for the first time , according to the National Park Service. Demand for short-term rentals in the area has also climbed. Kyle Grillot/Bloomberg News

In addition to park visitors, the area also drew more home buyers, local real-estate agent John Simpson said. Some were fleeing nearby metropolitan areas during pandemic lockdowns; others were looking to cash in on increasing demand for short - term rentals . Kyle Grillot/Bloomberg News

The mix of affordable real estate, record-low interest rates and few regulations on short-term rentals propped up home buying demand, sending prices soaring. Kyle Grillot/Bloomberg News

Now the sales market is cooling, while the supply of short-term rentals has seen continued growth. In 2019 , there were 1 , 876 available short - term rental listings in the Joshua Tree area ; by 2023 , there were 3 , 550 , according to AirDNA, a short-term rental analytics firm. The Bolder House is a short-term rental in Joshua Tree, Calif. Photo: Rocio Arrieta

Seattle-based investor Max McKinley and a group of family members bought a 995-square-foot home in Joshua Tree in July 2021 for $470,000 to use as a short-term rental. The McKinley family’s house. Photo: Trent Teigen

At first, the home typically rented for around $200 to $250 a night depending on the season, McKinley said. But over the last two years, they have had to lower their nightly rates to around $125 to $185 to keep up with the growing competition. The McKinley family’s house. Photo: Trent Teigen

In the spring of 2022, looking to turn their focus to their Washington investments, the family put the home on the market for $599,000 and have cut the listing price several times. The McKinley family’s house. Photo: Trent Teigen

It is currently asking $480,000, but they aren’t going lower, according to Wynwood, the listing agent. Since the home is breaking even as a short-term rental, McKinley said, they plan to keep it rather than listing it for less than what they paid. The McKinley family’s house. Photo: Trent Teigen

As of early April, roughly 40% of the 199 homes on the market in Joshua Tree had price reductions, Wynwood said. The McKinley family’s house. Photo: Trent Teigen Read the full story

Photo editor : Kat Malott Cover photo : Gabe Vega READ MORE : How Miami's Design District Became a Luxury Hot Spot Nashville's Priciest Zip Code Welcome to “Y’allywood”: Atlanta Is Now the Hot Spot for Celebrity Home Buyers An Influx of Boomers Is Putting a Strain on Southern Appalachia Read the full story