When it comes to the 2023 doomsday bingo card, few probably had “Airbnb market collapse triggers next great economic depression.”
A collapse in the short-term lease market would also be big news on Key Biscayne where the Airbnb site listed 146 available on Friday.
Yet, that is what a Newsweek article proposed on Wednesday when it picked up on some real estate “bros” having a spat – where else but Twitter – over the San Francisco company’s revenue. Meanwhile, Airbnb says everything is just fine. The magazine cited one analysis — disputed by others — that Airbnb prices were dropping precipitously in some markets.
So how did it become the stuff headlines?
Nick Gerli of Reventure Consulting – which gives advice to homebuyers and real-estate investors – said he crunched data on Airbnb revenue from Alltherooms, which provides short-term rental analytics.
“The Airbnb collapse is real,” he told Newsweek.
From May 2022 and May 2023, revenues dropped nearly 50% in cities like Phoenix. In Florida, Orlando and Panama City saw revenue down about 35 percent, according to the data.
If true, Newsweek article suggested that Airbnb cratering could trigger a wider housing market crash “on par with the 2009 subprime crisis” in some cities.
So is the sky falling? Is Airbnb whistling past the graveyard? Or is this all just social media clickbait?
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Local real estate experts say they are certain of one thing: South Florida is going to be fine even if short-term lease owners decide to move on.
“A lot of those Airbnbs should then transition back to long term rentals. So they’ll look for six month year long leases and that will help the supply which should help with prices,” said Florida Atlantic University professor Ken Johnson, who studies housing trends.
The typical Miami rental property rents for about $2,800 a month, according to Zillow.com rental index for April – making it one of the most expensive places to live in the country.
Noa Figari of the Longstead at Corcoran Group in Miami said she could see high interest rates or even a bubble as threatening a real estate market – but not this.
“I don’t think Airbnb will be the cause for a crash,” said real estate agent Noa Figari of the Longstead at Corcoran Group in Miami.
For those who have been living in a cave, Airbnb is a service that lets property owners rent out their homes, apartments, condominiums to travelers.
But Twitter being Twitter — there was immediate pushback on the claims that Airbnb prices were in freefall.
Jamie Lane, senior vice president at AirDNA, a company that tracks trends in short-term rentals, said the AllTheRooms is inaccurate and that the revenue shortfall is about 3%.
“Is it down in 2023? YES. Is it down 40%? NO,” he tweeted.
Gerli said in an email to the Independent that AirDNA is a competitor to Alltherooms. “I am trying to get to the bottom of these discrepancies and have reached out to Airbnb directly and asked them to provide their own internal data for the cities in question.
Airbnb, when reached out to by the Independent, said everyone’s wrong and cited figures from the first quarter of the year.
“The data is not consistent with our own data,” said Airbnb spokesman Sam Randall. “More guests are traveling on Airbnb than ever before, with Nights and Experiences Booked growing 19% in Q1 2023 compared to a year ago.”
What if owners decided to shed their Airbnb investment and put it on the market – rather than convert it to a longer rental. Johnson said that the home market is equally depleted of inventory.
“I don’t see this being a foreclosure crisis, especially here in Southeast Florida. Our mix of supply and demand just isn’t going to let that happen,” he said.
JOHN PACENTI is the executive editor of the Key Biscayne Independent. John has worked for The Associated Press, the Palm Beach Post, Daily Business Review, and WPTV-TV.