STR Rental Prices Falling and Inventory Opening Up, Anyone else noticing the same?

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STR Rental Prices Falling and Inventory Opening Up, Anyone else noticing the same?

David Hathaway
Investor · VA MD, NC · Member since 2023 · 35 posts · 17 votes

I've been looking at short-term rentals and noticed just recently more inventory has come on in the market at least in Massanutten Resort. Wondering if anyone else that's looking at short-term rentals as noticed an increase in inventory and price reductions starting to happen? My assumption is the supply of STR and people listing them have pushed ADR down and now interests rates don't justify the purchase price thus price reductions. Wondering what everyone else is seeing out there

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Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
3y

I think most of what you said applies to all types of real estate at the moment. 

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  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    3y

    I think most of what you said applies to all types of real estate at the moment. 

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    4Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y

    @Luke Carl is right. But STRs are taking a bigger hit IMO due to market over-saturation. It'll all settle out over time...

    4Reply
  • Dominique Morris
    Member since 2023 · 5 posts · 0 votes
    3y

    Yes, I'm part of several groups here in Michigan, and I've noticed that many property owners are selling their properties or not re-leasing properties arbitraged because increase in leasing prices. The market is currently over saturated, driving prices down, not leaving much profit.

    0Reply
  • Brian Erlich
    Investor · Roswell, GA · Member since 2016 · 73 posts · 38 votes
    3y

    I am seeing the same in Panama City Beach.  

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    It is very area dependent. One resort in VA is a pretty small cross section.

    Some areas are doing just fine with rents and housing prices still rising. Others are starting to level out while others are dropping.

    2Reply
  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    3y

    This is area-specific.  In the Smokies, there is a bit more supply than demand, generally speaking. But the supply of exceptional properties - those properties with views or waterfront - seems to have reached an equilibrium.  

    As in any investment class, the key is to buy quality.  

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  • Omer Menashe
    Member since 2023 · 4 posts · 1 vote
    3y

    Market oversaturation combined with creeping county/state level regulation...

    0Reply
  • Pete AppezzatoPro Member
    Real Estate Agent · Destin, FL · Member since 2019 · 49 posts · 18 votes
    3y

    Depends on your market and property.   I think in general in some markets there is an "over supply" of substandard properties with hosts that don't treat it as a business or use poor PM.  Those hosts and properties will probably fall off.  But excellent self-managers with great properties seem to still be doing well.     

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    3y

    We are due a correction.

    1Reply
  • Nancy Bachety
    Rental Property Investor · North Fork, NY · Member since 2016 · 1k+ posts · 631 votes
    3y

    I wonder what Uncle Paul is experiencing in the worst town in Kansas. I bet there’s no downturn there, and no mortgage rates to worry about either. 

    It is very market specific, like others have said. 

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    3y
    Quote from @Luke Carl:

    I think most of what you said applies to all types of real estate at the moment. 


    not all my new construction is doing quite well and our prices have held or are going for record highs.  Buyers = Empty Nesters looking for semi luxury homes.  their current home is paid for an they are paying cash or near cash.. our price points are 675k to 950k in the metro Portland market.

    the starter market is slow though for sure.. which is pretty rare.

    Since the STR game is commerical income in nature stands to reason rates really affect it. Also in some markets I suspect saturation is affecting values as well.
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  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y
    Quote from @Nancy Bachety:

    I wonder what Uncle Paul is experiencing in the worst town in Kansas. I bet there’s no downturn there, and no mortgage rates to worry about either. 

    It is very market specific, like others have said. 

    I have been thinking about Paul as well. Wondering how things are with him.
    0Reply
  • John Carbone
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    3y
    Quote from @Michael Baum:
    Quote from @Nancy Bachety:

    I wonder what Uncle Paul is experiencing in the worst town in Kansas. I bet there’s no downturn there, and no mortgage rates to worry about either. 

    It is very market specific, like others have said. 

    I have been thinking about Paul as well. Wondering how things are with him.

     For a town with only 10k population it sure gets a lot of headlines….

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    3y

    Supply and demand. As more people buy properties and turn them into STR, that increases the suppy. When supply rises, prices go down. STR prices have been on a downward trend for several years.

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  • Daniel Netzer
    Developer · Bend · Member since 2023 · 64 posts · 12 votes
    3y

    It depends on the market. It appears that average listings in over-saturated STR markets are taking a dip. i.e. Arizona, Texas, Tennessee, and Florida. I'm in a highly regulated STR market, so its up and to the right only.

    0Reply
  • John Carbone
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    3y
    Quote from @Russell Brazil:

    Supply and demand. As more people buy properties and turn them into STR, that increases the suppy. When supply rises, prices go down. STR prices have been on a downward trend for several years.

    Downward prices for several years? Certainly this past year, but it’s clearly been rising prices for several years until now. 
    0Reply
  • Daniel Netzer
    Developer · Bend · Member since 2023 · 64 posts · 12 votes
    3y
    Quote from @Dominique Morris:

    Yes, I'm part of several groups here in Michigan, and I've noticed that many property owners are selling their properties or not re-leasing properties arbitraged because increase in leasing prices. The market is currently over saturated, driving prices down, not leaving much profit.


    Unregulated STR markets are in the midst of taking a big haircut, IMO. Others with a higher barrier for entry will continue to be just fine.

    0Reply
  • John Carbone
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    3y
    Quote from @Daniel Netzer:
    Quote from @Dominique Morris:

    Yes, I'm part of several groups here in Michigan, and I've noticed that many property owners are selling their properties or not re-leasing properties arbitraged because increase in leasing prices. The market is currently over saturated, driving prices down, not leaving much profit.


    Unregulated STR markets are in the midst of taking a big haircut, IMO. Others with a higher barrier for entry will continue to be just fine.

    Or the regulated markets get rug pulled like in NYC 
    0Reply
  • Daniel Netzer
    Developer · Bend · Member since 2023 · 64 posts · 12 votes
    3y
    Quote from @John Carbone:
    Quote from @Daniel Netzer:
    Quote from @Dominique Morris:

    Yes, I'm part of several groups here in Michigan, and I've noticed that many property owners are selling their properties or not re-leasing properties arbitraged because increase in leasing prices. The market is currently over saturated, driving prices down, not leaving much profit.


    Unregulated STR markets are in the midst of taking a big haircut, IMO. Others with a higher barrier for entry will continue to be just fine.

    Or the regulated markets get rug pulled like in NYC 
    Did NYC have any barriers to entry? I assumed not. 
    0Reply
  • John Carbone
    Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
    3y
    Quote from @Daniel Netzer:
    Quote from @John Carbone:
    Quote from @Daniel Netzer:
    Quote from @Dominique Morris:

    Yes, I'm part of several groups here in Michigan, and I've noticed that many property owners are selling their properties or not re-leasing properties arbitraged because increase in leasing prices. The market is currently over saturated, driving prices down, not leaving much profit.


    Unregulated STR markets are in the midst of taking a big haircut, IMO. Others with a higher barrier for entry will continue to be just fine.

    Or the regulated markets get rug pulled like in NYC 
    Did NYC have any barriers to entry? I assumed not. 

    Of course they did and now the regulations are so tight you need to be in the same dwelling as your guests to rent them.

     I’d much rather invest in an unregulated market and let it crash and burn with bad products and then everyone will be afraid to invest in them again. That’s where the real money is made, not because someone adds stricter and stricter regulations eventually leading to your own demise. 

    2Reply
  • Daniel Netzer
    Developer · Bend · Member since 2023 · 64 posts · 12 votes
    3y
    Quote from @John Carbone:
    Quote from @Daniel Netzer:
    Quote from @John Carbone:
    Quote from @Daniel Netzer:
    Quote from @Dominique Morris:

    Yes, I'm part of several groups here in Michigan, and I've noticed that many property owners are selling their properties or not re-leasing properties arbitraged because increase in leasing prices. The market is currently over saturated, driving prices down, not leaving much profit.


    Unregulated STR markets are in the midst of taking a big haircut, IMO. Others with a higher barrier for entry will continue to be just fine.

    Or the regulated markets get rug pulled like in NYC 
    Did NYC have any barriers to entry? I assumed not. 

    Of course they did and now the regulations are so tight you need to be in the same dwelling as your guests to rent them.

     I’d much rather invest in an unregulated market and let it crash and burn with bad products and then everyone will be afraid to invest in them again. That’s where the real money is made, not because someone adds stricter and stricter regulations eventually leading to your own demise. 

     I'm in a market that releases stricter regulations, yet grandfathers in previous conforming permits. That's how it should be done, and you should feel safe in a market that has a history of protecting previous legal conforming permits. NYC clearly isn't one of them. lol 

    1Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    3y

    Remember 2008 when everything crashed? Then what happened? Prices corrected equalized and went back up.

    I think most of us would like to buy at 2008 prices now.

    So if you can hold onto properties they will equalize and continue up in price.

    0Reply
  • Jordan Tinning
    Rental Property Investor · Mukilteo, WA · Member since 2017 · 52 posts · 53 votes
    3y

    @David Hathaway yep, and I flipped both my properties long term because of it.

    0Reply
  • Daniel Netzer
    Developer · Bend · Member since 2023 · 64 posts · 12 votes
    3y
    Quote from @John Underwood:

    Remember 2008 when everything crashed? Then what happened? Prices corrected equalized and went back up.

    I think most of us would like to buy at 2008 prices now.

    So if you can hold onto properties they will equalize and continue up in price.

    Until we see a sharp recession, I'm not seeing a US-wide doom and gloom. Crash canceled, aside from a few pockets with over-saturated vacation rental speculators or insurance issues, like Florida. 
    0Reply
  • Nancy Bachety
    Rental Property Investor · North Fork, NY · Member since 2016 · 1k+ posts · 631 votes
    3y
    Quote from @John Carbone:
    Quote from @Michael Baum:
    Quote from @Nancy Bachety:

    I wonder what Uncle Paul is experiencing in the worst town in Kansas. I bet there’s no downturn there, and no mortgage rates to worry about either. 

    It is very market specific, like others have said. 

    I have been thinking about Paul as well. Wondering how things are with him.

     For a town with only 10k population it sure gets a lot of headlines….


     Paul always said it like it was.

    0Reply
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