I still think we'll see the economy bounce back sooner rather than later, and I don't think there will be too much impact on housing prices overall, but I do think vacation towns could get really hurt.
In NJ for example we have the Jersey Shore that demands high weekly rents about 3 months out of the year. Those 3 months typically more than cover expenses for the year, but I imagine a ton of non-savvy investors of those beach town houses can't afford to miss those rents.
If this does stretch into July-August I think we could see a ton of houses start hitting the market out of desperation. I saw an article that even predicted a potential 45% drop?
Curious of everyone's thoughts, we weren't planning on a vacation home for another 3-4 years but if that's the case I think we'd be crazy to wait.
Of the 3 major types of STR markets: metro, fly-to vacation markets, and drive-to vacation markets, the drive-to regional vacation rental markets are being impacted the least. (Although all are being impacted, make no mistake about that.) I'd expect that the jersey shore would be severely impacted due to its proximity to the epicenter of the outbreak in the US.
Article in Wall Street Journal today seems to suggest there are fire sales going on with AirBnB houses but I have not seen that anywhere that I pay attention to including Scottsdale and Tucson. I don't see why there would be fire sales as prices haven't fallen yet so most people should be able to sell pretty quickly with at least slim equity I would think
I don't know if fire sale is right terminology, but prices are definitely declining (albeit a small decrease) for condos in certain communities in the Old Town Scottsdale area.
There are well over 30 active listings in AirBnb approved communities around Old Town Scottsdale where as there might have been 3 or 4 at any given time prior to coronavirus.
T
Article in Wall Street Journal today seems to suggest there are fire sales going on with AirBnB houses but I have not seen that anywhere that I pay attention to including Scottsdale and Tucson. I don't see why there would be fire sales as prices haven't fallen yet so most people should be able to sell pretty quickly with at least slim equity I would think
I don't know if fire sale is right terminology, but prices are definitely declining (albeit a small decrease) for condos in certain communities in the Old Town Scottsdale area.
There are well over 30 active listings in AirBnb approved communities around Old Town Scottsdale where as there might have been 3 or 4 at any given time prior to coronavirus.
T
That's sort of my point. Sure there will be softening but not firesale. I have been following the higher end North Scottsdale market ($1m+) and asking prices haven't changed much yet. This guy quoted here seems to suggest fire sale but then I look him up and it appears he owns a 72 hour sale real estate agency so I assume he wants people thinking there are fire sales going on!? Here's quote from article and then link to article below:
"Many Airbnb hosts are desperate to sell properties, say real-estate brokers like Greg Hague, who runs a Phoenix real-estate firm and helped state lawmakers draft short-term-rental legislation. “There’s been a flood of people. You have people coming to us saying, ‘I’m a month or two away from foreclosure. What’s it going to take to get it sold now?’ ” he said. That has diminished overall property values, he said."
https://www.wsj.com/articles/a-bargain-with-the-devilbill-comes-due-for-overextended-airbnb-hosts-11588083336
@Eric P. I think you are in a unique situation with your vacation town being so so near New York, where the biggest hit in the country for COVID-19 is. I too think we will bounce back sooner rather than later. Hang in there and stay safe.
@Matt Morgan what are the communities that allow STR in Scottsdale?
I still think we'll see the economy bounce back sooner rather than later, and I don't think there will be too much impact on housing prices overall, but I do think vacation towns could get really hurt.
In NJ for example we have the Jersey Shore that demands high weekly rents about 3 months out of the year. Those 3 months typically more than cover expenses for the year, but I imagine a ton of non-savvy investors of those beach town houses can't afford to miss those rents.
If this does stretch into July-August I think we could see a ton of houses start hitting the market out of desperation. I saw an article that even predicted a potential 45% drop?
Curious of everyone's thoughts, we weren't planning on a vacation home for another 3-4 years but if that's the case I think we'd be crazy to wait.
While I must admit, I have not read any of the other posts (I'm exhausted from grinding + having 2 kids under 4 in a tiny apt), so this may have already been touched upon.
Out east, the rental market has gone crazy with people trying to escape NYC. Because of that, rental prices have gone through the roof in the Hamptons and North Fork. Since I have no stake in the Jersey Shore, not sure if the same scenario is playing out there.
Also, from the last recession, the first form of vacation to come back was local travel and vacation spots, since driving is less expensive then flying to destinations. So I'm sure how it will all play out, but we'll know soon enough.
Hey @Eric P.! It surely has been some crazy times in the real estate market post covid. We have seen the real estate market explode especially down here in Manasquan at the Jersey Shore. My family owns a STR on the beach in Manasquan. In retrospect, we didnt have anyone cancel for Summer 2020 and saw increased demand for Summer 2021. Rents have been really pushing up with the increased demand to "work from home" in a nice place. Between my real estate license and own family home that we rent I have seen a good amount of demand for rentals. Its very difficult to find a rental in Manasquan and surrounding areas because people really enjoy getting to the beach in the summer. Summer 2020 I saw alot of New Yorkers with Vacation homes that are selling up north to move down to the shore.
For context we rent our beachfront home for $6500-7000 for a 3 bed / 1.5 bath. I just listed my neighbors 4 bed / 3 bath beach side home for $10k/ week and have successfully rented 5 weeks at that price. We have it listed for July 24th to September 24th. If the beginning of the summer was available Im VERY confident I would have the whole summer rented at or near $10k per week.
The Jersey Shore is alive and well and has not seen a drop in home prices or a drop in rental demand. Even in the winter people are updating their homes and looking for a place to stay or people are selling their homes and need a place to rent while they look for something in the market.
If you want to talk about the Manasquan Market or the Jersey Shore as a whole. Lets connect!
Hey @Eric P.! It surely has been some crazy times in the real estate market post covid. We have seen the real estate market explode especially down here in Manasquan at the Jersey Shore. My family owns a STR on the beach in Manasquan. In retrospect, we didnt have anyone cancel for Summer 2020 and saw increased demand for Summer 2021. Rents have been really pushing up with the increased demand to "work from home" in a nice place. Between my real estate license and own family home that we rent I have seen a good amount of demand for rentals. Its very difficult to find a rental in Manasquan and surrounding areas because people really enjoy getting to the beach in the summer. Summer 2020 I saw alot of New Yorkers with Vacation homes that are selling up north to move down to the shore.
For context we rent our beachfront home for $6500-7000 for a 3 bed / 1.5 bath. I just listed my neighbors 4 bed / 3 bath beach side home for $10k/ week and have successfully rented 5 weeks at that price. We have it listed for July 24th to September 24th. If the beginning of the summer was available Im VERY confident I would have the whole summer rented at or near $10k per week.
The Jersey Shore is alive and well and has not seen a drop in home prices or a drop in rental demand. Even in the winter people are updating their homes and looking for a place to stay or people are selling their homes and need a place to rent while they look for something in the market.
If you want to talk about the Manasquan Market or the Jersey Shore as a whole. Lets connect!
Hey @richard - I've seen the same market dynamics up in Long Branch NJ. where do you list your short term weekly rentals? MLS, Airbnb, vrbo? I have a place in Long Branch I'm considering renting out for this summer.
Hey @Rick Estacio, we have gotten the best results from traditional listings methods ( Off Market - People we know OR MLS). If you would like to list your property Im here to help. There is tremendous demand out there for rentals both Winter, Summer and Annual, so Im confident you will be successful. For my family rental we have had the worst experience and lowest quality tenants coming from the rental sites (Airbnb and VRBO). We have had the best experience using traditional methods.