"It's An Airbnbust": Home In Palm Springs Falls Quicker Than Meme Stock

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by Tyler Durden
Tuesday, Feb 27, 2024 - 12:20 AM

DFW housing and macro analyst Amy Nixon has raised concerns about the potential for an 'Airbnbust' to increase inventory in the housing market. Although this scenario has yet to materialize, it remains to be seen whether owners of heavily leveraged Airbnb properties can withstand a prolonged downturn in the short-term rental market.

On X, Nixon pointed out that Zillow housing data shows a home in Palm Springs, California, that sold for $1.3 million in May 2023 and was recently listed for $625k. She called this the latest example of an "Airbnbust." 

"Just because it hasn't happened at scale, doesn't mean it isn't happening," Nixon said. 

Nixon followed up the post with this chart! 

One X user commented on Nixon's post: "It's a town of 45k. Like talking about the housing market of Saginaw." 

She responded: "These are exactly the kinds of towns that got bid up in speculative frenzies during the pandemic." 

"The first thing that jumps out is Short Sale on the listing. This was so common for years after 2008 but had not seen it for a long time," another X user said. 

Over the last 12 months, vacation rental owners and real estate agents have described what they say is a downturn in the short-term rental market. Some on X have used the hashtag "Airbnbust." 

Sabrina Must,37, who owns a one-bathroom Airbnb property in Encinitas, California, about 25 miles north of San Diego, complained to WSJ in an interview that her listing only fetches $275 per night. During Covid, she had the property listed for $1,000 per night. 

"I've felt a massive drop," adding, "I am so beyond stressed by it." 

According to data from AllTheRooms, the number of Airbnb rentals in the US jumped from 200,000 seven years ago to nearly 1 million in 2023. 

As for all those millennials and GenZers who used stupid amounts of leverage to buy Airbnb properties, it's widely understood some of them have the weakest balance sheets to weather a prolonged downturn in the short-term rental market, which might force them to panic sell. 

Let's not forget we have penned two notes about the coming Airbnb bust in "Why AirBnB Owners Are About To Be Forced Property Sellers" and "AirBnB Bubble Bursts: Investor Home Purchases Crash 45% In Biggest Drop Since 2008."