Airbnb owners are about to cause a massive housing crash in certain cities across America in 2023 and 2024. The central issue that will cause this Housing Crash is Airbnb Bust, the new trend where revenues for Airbnb owners have plummeted by as much as 50% in areas like Phoenix, Austin, and Tennessee.
Plummeting Airbnb revenues is a big problem because lots of investors bought up Airbnbs over the last several years and heavily increased the supply. There are now roughly 1 million Airbnbs / VRBO rental in America compared to only 570k homes for sale.
Data from AllTheRooms: https://www.alltherooms.com/
Reventure App Article: https://www.reventure.app/blog/what-the-hack-is-happening-in-phoenix-50-inventory-drop-in-6-months
Going forward we are likely to see many of these owners sell to avoid taking further losses on their Airbnb. Especially because many investors bought up short-term rentals with subprime mortgages, specifically called DSCR Loans. These loans don’t require income verification from the borrower and are collateralized by the income profitability of the property.
Which is now becoming an issue in areas like Sevierville, TN, where Airbnb revenues have declined by 50% over the last year. This market in eastern Tennessee was a hotbed for Airbnb purchases with DSCR loans and now there are nearly 10x as many short-term rental listings as there are homes for sale – a concerning signal that suggests inventory in this market will spike and prices will decline.
Airbnb owners might also elect to rent their properties long-term, which could cause even more vacant rentals to hit the market in cities like Phoenix, Austin, and Nashville. Which would put downward pressure on rental rates and eventually cause home prices to go down by more.
—
REVENTURE APP: https://www.beta.reventure.app/dashboard
JOIN as a CHANNEL MEMBER ($5/Month): https://www.youtube.com/channel/UCVTQunGrE3p7Oq8Owao5y_Q/join
DISCLAIMER: This video content is intended only for informational, educational, and entertainment purposes. Neither Reventure Consulting or Nicholas Gerli are registered financial advisors. Your use of Reventure Consulting’s YouTube channel and your reliance on any information on the channel is solely at your own risk. Moreover, the use of the Internet (including, but not limited to, YouTube, E-Mail, and Instagram) for communications with Reventure Consulting does not establish a formal business relationship.
Image(s) and/or Footage used under license from Shutterstock.com. https://www.shutterstock.com/
Additional stock footage provided by Envato Elements. https://elements.envato.com/
Lots of people are being tricked into thinking this Housing Crash is over.
It isn't. There's so much inventory building in the background of the rental market that is eventually going to get unleashed For Sale. Just look at the graph at 0:37 comparing Airbnb Listings to For Sale Inventory.
In Phoenix there's more than 2x as many Airbnbs are For Sale listings (see 2:05) and that market is now down 50% on Airbnb revenue per owner. Yikes. When the capitulation comes, it will be severe.
Especially for those who took out subprime DSCR loans to buy vacation rentals. It's difficult to quantify just how many people did this, but in areas like Tennessee it was likely a lot. Bloomberg did an interesting article one year ago on the DSCR loan boom for Airbnbs (check 3:10). I wonder how some of those mortgage brokers and buyers are feeling now.
Important to remember though: Airbnbs in big cities are typically clustered in dense, urban areas. So these will be areas most impacted by Airbnb bust and forced selling. You can see the heatmap of Airbnbs in Phoenix from AllTheRooms to get a sense of this (at 4:45). Downtown, Scottsdale, Paradise Valley, and Tempe are in the crosshairs. More suburban and rural areas not as much.
Cities that will get hit hardest by Airbnb bust starts at 9:11.
-Nick
Of all the doomer disinformation entrepreneurs on YouTube, this guy is the worst. "Shadow inventory". Lol. Nothing is crashing except available affordable inventory and your brain cells listening to this nonsense.
News Flash…… it's July in Phoenix. Air BNB is empty there 6mo yr
What kind of weird hussle is this?
No crash. Full of doo-doo, this guy.
I’ve been listening to people swear the economy is going to collapse since 2020! We are going on 3 years of this, WHERE IS IT?!?!
LOL…Nope! Many/most Air BNBs are STILL doing VERY WELL in most areas
Wait until second lockdown coming
Tri staters came in and bought tons of properties in New England causing massive housing shortages. They jacked up prices ridiculously expensive. Now these air bnbs are sitting there. It defeats the whole purpose of getting an air bnb which is affordability. They want 700-1500 a night. Absolutely delusional. They have no sense of ethics.
Well-earned. lol.
F Airbnb.
The guy on this video has lost his mind. His analysis is so flawed, I don’t know where to begin. Yes, inventory is going up, but with it being at such historic lows, that’s the only direction it can go. And he also seems to be cherry picking data from across the country in a desperate attempt to back up his opinion. Nation wide, there is absolutely no way a crash is coming anytime soon. What is this guy smoking?
There is no incentive for existing home owners to sell their homes right now. Who in their right mind would sell their house and then finance their new home purchase with a mortgage rate almost double what they already have? And I’ve got news for you, mortgage rates are not going significantly lower anytime soon.
You need housing supply to go way up AND demand to plummet to get a housing crash. Housing starts need to triple their current rate just to keep up with population growth. As for foreclosures, yes, they are going up, but just like it is with inventory, foreclosures are coming off historic lows. Does anyone remember that foreclosures went incredibly low during the height of Covid?
I’m not even halfway done here. As for the recession and a soft labor market reducing demand, I wouldn’t count on it. Since 1962, the majority of recessions in this country never resulted in a housing crash, with the notable exception of the 2008 financial crisis.
Lastly, does this guy realize the amount of pent up demand we have in this country? At the slightest sign of mortgage rates and prices going down, the demand waiting on the sidelines is going to scoop up whatever increased inventories we might have on the near horizon. Another factor to consider on the demand side of the equation is the retirement of the baby boomers, who have a lifetime of assets built up to buy their retirement homes.
Now let me clear, price increases will level off. The increases we’ve seen the last couple of years are just not sustainable. We will get to the point where supply and demand will come into balance, and we will see prices flatline. But it’s going to take inventory far outpacing demand to have a crash, and we are definitely not there yet
Airbnb collapse is necessary.
Please don't call them "AirBnb's". AirBnb doesn't own them and they already think their crap doesn't stink. They are STR's (short term rentals). I am an experienced STR owner and 30 year flipper/investor/real estate broker who purchases at the right time. No way I would have purchased in the last 3 years, don't ever do emotional buying, FOMO is a profit killer. We sold most of our STRs in the last 2 years to FOMO buyers, who are struggling to pay their mortgages now and have dropped their rates by more than 50% from what they were charging just after purchase. Watching and waiting on market downturn, then we will buy again. Buy when everyone else is selling, sell when everyone else is buying.
So another youtuber said AirBNB is only a fractional percentage of the market, so if all of those were forced to sell it would still not cause a crash.
But I guess the point is the entire housing market is rotten anyway, and AirBNB is just a symptom and a canary. So, bring on the Collapsolypse!
💥💨
As a native Nashville resident, all I can say is…. "burn baby burn". These bastards have damn near made it impossible for me to buy in the city I was born in. Which used to be reasonably priced about 10 years ago. Unfortunately I was right out of college and not making any money yet back then. Yeah, I'm bitter. These "investors" can eat shit.
For 2023, it’s hard to nail down specific predictions for the housing market is because it’s not yet clear how quickly or how much the Federal Reserve can bring down inflation and borrowing costs without tanking buyer demand for everything from homes to cars.
Fake Narratives? You mean like Ukraine defeats Russia? Ok, now I get it.
What will happen to all the cleaning companies?
3 minutes of actual content across 18 minutes of coverage, it's all about the same old obsessive-compulsive-disorder that is consuming the entire
society. We are a people born in B.S. and drowning in B.S. that is so full of B.S. as to warrant the upcoming genocide same as Sodom and Ghamorrah,
however you spell it, humanity stinks.
This guys been wrong. And I think he’s going to be wrong on this too
None of this is true