Just a few years ago, it was incredibly popular to purchase a house, give it a makeover, and then utilize it as an Airbnb to generate a substantial income. However, the problem lies in the current situation where the market is flooded with these short-term rentals. As a result, regular individuals who are in need of purchasing or renting a home are facing significant difficulties in finding suitable housing options.
The market is clearly oversaturated with Airbnb listings, and coupled with the frustration of average people who are fed up with their struggle to secure long-term rentals, the company is now experiencing the repercussions. It appears that revenues have plummeted by over 50% in cities like Phoenix and Austin, where Airbnb listings are abundant.
Here's a thread that details the collapse:
Watch out for a wave of forced selling from Airbnb owners later this year in the areas hit hardest by the revenue collapse.
hat's scary for the US Housing Market is just how many Airbnbs there are.
Data from AllTheRooms shows 1 million Airbnb / VRBO rentals.
Compared to only 570k homes for sale.
Creates huge home price downside if struggling Airbnb owners elect to sell.
Ground zero for this Airbnb collapse is a city like PHOENIX.
Where the number of short-term rentals (18k) is more than DOUBLE the number of for sale listings (8k).
Mix the huge Airbnb supply with revenues down -50% and you get a cocktail for massive forced selling.
Another area with huge exposure is Eastern Tennessee.
Particularly a vacation town called Sevierville in the Smokey Mountains.
In this county there's 10x as many Airbnbs as homes listed for sale. While the revenue per owner is down nearly 50%.
Yikes.
Personally, I think it's good that Airbnb is getting knocked down a peg or two.
This company became excessively arrogant and these affluent investors, who acquire properties solely for vacation rentals, are depriving ordinary individuals of crucial housing opportunities.
