Morro Bay, CA

  • Overview
  • Performance
  • Listings
  • Buy Box

Key Performance Metrics

Market snapshot

Performance indicators for the Morro Bay short-term rental market based on reliable data.

Listings

153 / 279

Reliable / Active

Cap Rate

7%

Middle-Earners Gross Yield

Revenue

$63,349

Middle-Earners Revenue

Occupancy

73%

Middle-Earners Occupancy

Home Value

$952,480

Median Home Sale Price

Top Earners

$114,279

Top-Earners Revenue

Morro Bay

Market Revenue Seasonality

Top Listings

Highest revenue

The highest-performing listings in Morro Bay.

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C

Challenging to Investors

Morro Bay Regulations

Short-term rentals are allowed but strictly capped at 175 full-home units in residential zones, with new permits paused, a 175-foot buffer, multiple costly permits (starting around $600), inspections, annual renewals and re-inspections every four years, and active enforcement with penalties up to $500/day and three years of back taxes. Commercial and home-share STRs remain cap-free, but the overall compliance burden, cap-induced uncertainty, and enforcement posture make the environment challenging for investors.

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About Morro Bay

Morro Bay is a small coastal city in San Luis Obispo County, California, with an approximate population of around 10,500 residents. Set along the Central Coast roughly halfway between Los Angeles and the San Francisco Bay Area, it sits about 230 miles northwest of Los Angeles and a similar distance southeast of San Francisco, with the larger college town of San Luis Obispo only about 13 miles to the southeast. The town has a relaxed, working-harbor atmosphere, shaped by a fishing fleet, sea otters drifting in the bay, and the iconic volcanic plug known as Morro Rock rising 576 feet above the harbor entrance. It serves as a popular stop along Highway 1 and a gateway to some of the most scenic stretches of the California coast, including the famous elephant seal rookery and Hearst Castle in San Simeon.

Dominating the waterfront is Morro Rock, one of the ancient volcanic peaks known as the Nine Sisters that line the San Luis Obispo coastline. The rock is a protected peregrine falcon nesting site and a beloved symbol of the town, drawing photographers and visitors who stroll the Embarcadero to view it from the harbor's edge, often with sea otters and sea lions visible in the surrounding water.

Just south of the harbor lies Morro Bay State Park, which extends along the bay and inland toward a chain of volcanic hills. The park features a campground, a golf course, walking trails, a kayak launch, and the Museum of Natural History at its heart, where visitors can learn about the estuary ecosystem, the Chumash people, and the area's bird life. The park is just a few minutes' drive from downtown and is a popular spot for birdwatchers, especially during winter migrations along the Pacific Flyway.

About a 20-minute drive south of Morro Bay, Montaña de Oro State Park offers a wilder experience with rugged coastal bluffs, eucalyptus-shaded canyons, and several miles of trails leading to quiet coves. Its name, meaning "Mountain of Gold," comes from the golden wildflowers that blanket the hills in spring, and it remains one of the less-crowded natural escapes along this stretch of coast.

Roughly 35 to 40 miles up Highway 1, near the town of San Simeon, Hearst Castle is one of California's most visited historic landmarks. The hilltop estate built by newspaper magnate William Randolph Hearst contains ornate guest houses, sweeping terraces, and a collection of art and antiquities, with guided tours showcasing the property's grand architecture and Pacific views. The drive itself winds through some of the most dramatic coastal scenery in the state, often passing the elephant seal viewing area near San Simeon along the way.

With its mix of harbor-front charm, accessible outdoor recreation, and proximity to both Hearst Castle and the broader Central Coast, Morro Bay offers visitors a varied and distinctly Californian experience. For short-term rental owners, that combination of natural beauty, year-round mild weather, and steady tourist traffic from Hearst Castle day-trippers, Highway 1 road travelers, and weekend visitors from Los Angeles and the Bay Area makes the city a quietly dependable coastal market.

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