I would suggest changing if(empty($baths)) to if($baths != '').
Then, the answer to your question would be no, it would return the correct results. I believe Piranha made a typo and meant to say if(!empty($baths)).
If you did something such as:
$query = "SELECT * FROM Properties WHERE 1";
if ($beds != '') $query = $query . " and beds = '".$beds."'";
if ($baths != '') $query = $query . " AND baths = '".$baths."'";
then the query would only be appended with the WHERE conditions if they specified a number.
As Piranha noted, you should also be concerned with SQL injection and use a function such as [man]mysql_real_escape_string/man on all user-supplied data in your SQL queries. In this case, if the variables are going to be numbers, you could use [man]intval/man (or cast them to an integer) instead (and in which case you would get rid of the quotes in your SQL query - numeric values shouldn't be quoted, only strings).