Summer started strong for luxury short-term rentals in Los Angeles, with an uptick in activity for a property category of mansions rented to jetsetting travelers that include European soccer stars, Middle Eastern royals and corporate executives.
Los Angeles’ luxury short-term rentals reached 60 percent occupancy, or 60 percent of the nights available were booked, in June, according to AirDNA, a data provider on the industry. That represents a slight uptick from June 2022, when the market for short term luxury rentals reached about 59 percent occupancy in Los Angeles. While the numbers may not reflect a significant increase, the market has been active, despite trends such as a glut of listings gnawing on the business.
A major factor, it’s summer. There’s always a surge in occupancy during the summer months of June, July and August for high-end rentals, said Patrick Michael, founder of L.A. Estate Rentals, a high-end rental agency. However, the Los Angeles luxe rental market has experienced an increase in mansions available to rent this year, Michael said. More property owners seek to rent their mansions rather than put them up for sale after the first quarter, in order to avoid paying the steep ULA wealth transfer tax which went into effect in April.
“There are more deals in the marketplace,” Michael said. “More travelers have an opportunity to stay at homes they wouldn’t have been able to afford. Increased inventory correlates to lower prices and discounts across the board.”
He reported that this summer, owners of ultra luxe homes were giving discounts, sometimes as much as 30 percent. Last summer, discounts were not a trend. The increasing number of homes has put a drag on the market.
“Most homes are booked up,” Michael said. “But if it’s $100,000-per-month or more, they’re available. Rentals on the higher-end market are sitting a little longer.”
General prices for the ultraluxe market for an ultra premium pad could range from $8,000 to $25,000 per night. Mid-luxury could run $1,500 to $2,000 per night.
Others who work in high-end vacation rentals notice the same trends. Aaron Kirman, the sales agent and founder of AKG Christie’s International Real Estate in Los Angeles, said billionaires are still traveling to L.A., but even they are looking for deals.
“The market is funky this year. People are hesitant to spend fortunes on rentals,” he said.
Crowds are changing. There are fewer Saudis this year, Kirman and Michael said. Reportedly, more are vacationing in Europe this summer.
Susan Monus, a veteran Coldwell Banker Realty agent in Malibu, thought the domestic market for L.A. rentals has declined. “If you go to Europe, you’ll see everybody from L.A.,” Monus said.