Airbnb Implosion Reveals ALARMING Shortage In Housing Market

Airbnb is collapsing and that might translate to some good news in our ongoing housing crisis. But before we can really understand why, we need to take a look at the housing market as a whole. In an effort to highlight the absolutely dire nature of the housing crisis, Zillow released new data that shows that the United States is short by more than 4 million housing units. The

study, which included both homes for sale and rental properties, reveals that the housing shortage in America is so severe that the number of Americans looking to move out on their own, outnumbered available housing by nearly 2 to 1. There were roughly 8 million individuals, or families who lived in another person's home in 2021, and just 3.7 million homes for rent or sale, leaving a deficit of

4.3 million homes. And it should come as no surprise that these housing deficits are notably worse in some parts of the country, such as Los Angeles, San Francisco, San Jose, San Diego, and Boston. I mean, California not doing too well, let's just keep it real. Take a look at this chart from Zillow, which lists cities with the worst shortages. New York tops the list with a

housing deficit of more than 300,000 76,000 units. Los Angeles comes in at a close second with a shortage of nearly 334,000 houses, or housing units. San Francisco, Boston, DC, and Seattle also top the chart with each in need of hundreds of thousands of housing units. Thanks to the explosion of remote work and super low interest rates on mortgages, housing availability and affordability took a massive hit

during the pandemic. Keep in mind that homes were already in short supply to begin with. So demand rising sharply during the pandemic pushed the housing prices to record highs. During the pandemic both rents and sale prices soared. In the last year, typical rents rose by close to 5% up to $2048 per month, while the value of a typical home jumped to nearly $347,000. Now Zillow argues

that the only way out of this mess is to have policy makers focus their efforts on loosening zoning regulations and other governmental red tape in order to boost construction. Researchers suggest that speeding up building permitting tax incentives to rehabilitate under utilized housing stock and expanding affordable housing trust funds could all help ease the shortfall in new construction. But we can't just blindly call for the construction

of new housing without some safeguards in place. A senior economist at Zillow makes clear that new construction needs to focus on the types of houses that ordinary Americans can afford rather than the astronomically priced luxury real estate that's been developed over the last few decades. He argues that there are simply not enough homes for millions of people. Unless we address the shortage of smaller, more affordable

starter type homes, we risk leaving families without a seat and it will only get worse over time. And it has been getting worse. Year after year, the housing crisis seems to be exacerbated by this housing crisis and shortage. It's true that those who happen to be lower in the socio economic status are hit hardest by the housing shortage. The bulk of families doubling up have consistently

lower incomes, highlighting the need for smaller, more affordable housing. Of the families that are doubling up, 68% had an annual income of just $35,000 or less. So in addition to loosening zoning regulations, we also have to make sure that policy makers restrict construction to affordable housing. Luckily, there are some positive developments with new housing construction. Housing starts to jump to an annual rate of 1.63 million

units last month, up from 1.34 million. 1.34 million in April according to Census Bureau data. Single family and multifamily construction experience monthly increases as well. Now, single family starts jumped by 18.5% over revised April figures to a rate of 997,000 units, while starts for buildings with five or more units was 624,000. But look, it's also worth focusing just a little bit on the vacant homes, which

continue to drive people like me absolutely insane. Now, Zillow's analysis found that while there is a deficit of 4.3 million housing units, there are an estimated 12 million vacant homes. Of the nearly 12 million housing units that were not available for rent or for sale, only 6.3 million vacant units had either recently been purchased, rented or rented or were for the owner's occasional use. That leaves

5.6 million vacant homes that aren't available. Zillow believes that most of the vacant housing is inhabitable, meaning that they're in good enough condition for people to actually live in. So why are they sitting empty while we're dealing with a severe housing shortage? The census did its own analysis just a month ago in late May. They found that most vacant housing is seasonal. These are vacation homes

for the halves, as the have not struggled to put a roof over their heads. In 645 of the nation's 3,143 counties, seasonal units made up at least 50% of the vacant housing. In 1,313 counties, seasonal units outnumbered the combined total number of units for rent or sale that were vacant. Riverside County, California, Broward and Miami-Dade counties in Florida, and Maricopa County in Arizona had more vacant

units that were for seasonal, recreational or occasional use than vacant units for rent or for sale, which brings me to the ongoing collapse of Airbnb. Now revenues for the San Francisco based company have dropped by nearly 50% in cities like Phoenix, Arizona and Austin, Texas, suggesting that the company might be facing an unfolding crisis. This is according to recent data from all the rooms, comparing Airbnb

profits in May of 2022 and May of 2023. The short term rental industry is absolutely struggling, and if owners of these properties end up selling these homes, it could significantly increase inventory in some parts of the country. Let's take a look at the areas hit hardest by the so-called Airbnb collapse. The chart that you're going to look at right here was put together by Nick Jurley,

who is the CEO of Venture Consulting, which provides advice to home buyers. The chart shows that cities that have seen significant drops this year compared to 2022 are San Antonio, Texas, with a 43.8% decline in revenue. Nashville, Tennessee, with a 39% drop, Denver, Colorado, with a 38.6% drop, New Orleans, with a 37% drop, and Seattle, Washington, with a 35.2% drop in revenue. All data was calculated

as a three month average revenue per listing for May of 2023, compared to May of 2022. Now, Jurley added that the collapse in revenue for Airbnb might force the owners of these properties to essentially sell the homes. But he thinks that's actually bad news for the housing market. And it is bad news for some people. If you're looking to put your house up for sale, and

suddenly there's this massive influx of homes on the market, you might have more difficulty selling the home. I mean, it's just simple supply and demand. You might end up selling it for less than what you would have gotten if Airbnb wasn't collapsing, and if Airbnb property owners weren't putting their homes on the market. Now, in a subsequent tweet though, he argues that what's scary for the

US housing market is just how many Airbnb's there are. Data from all the room shows 1 million Airbnb and verbal rentals, compared to only 570,000 homes for sale. This creates huge home price downside if struggling Airbnb owners elect to sell. And I hope they do elect to sell. In the case of Phoenix, Jurley wrote, the number of short term rentals estimated at 18,000 is more than

double the number of rentals. The number of homes for sale, estimated 8,000, mixed the huge Airbnb supply with revenues down 50% and you get a cocktail for massive force selling, he tweeted. All right, let's just break that down for you. Here's the translation. This could lead to more inventory of homes on the market, which would lower housing prices. And for those who had the means to

invest in short term rental properties and the quest for passive income, they should know that real estate speculation is sometimes pretty risky. And you might lose money if your force to sell your investment during an economic downturn. Local lawmakers though should never have allowed the short term rental industry to grow this large in the first place. As we continue to suffer through a persistent housing shortage,

the fact that little to nothing was done to mitigate these investments in order to get preserved housing for those who actually need to live in it, tells you a lot about the lack of governance by our elected leaders. And that's all we've got to do is click that join button right underneath the video. Thank you.