SANTA CLARA, Calif.,
May 20, 2020 /PRNewswire/
-- Faced with the prospect of lost income due to COVID-19
travel restrictions, many daily rental owners could be
transitioning properties from Airbnb and Vrbo rentals to seasonal
rentals, according to new research published by
realtor.com®. Today's report finds that tourist
destinations are seeing a significant increase in furnished
seasonal rentals, as hosts look to lock tenants into one- or
three-month leases.
The jump in seasonal rentals is somewhat localized, with the
most significant year-over-year increases in Nashville, Tenn. (185 percent), Austin, Texas (160 percent), Orlando, Fla. (82 percent), Las Vegas (56 percent), Chicago (49 percent), San Antonio (49 percent), New Orleans (48 percent), Honolulu (47 percent), Jacksonville, Fla. (42 percent) and
Bridgeport, Conn. (35 percent).
Just since the end of February, these Airbnb and Vrbo hubs saw an
average increase of 74 percent in seasonal rentals. By contrast,
seasonal rentals in the top 100 U.S. metros were only up 21
percent, and all other rental inventory declined by 2 percent in
the same period.
In Nashville, Tenn., the most
impacted market, seasonal rentals are up 157 percent since the end
of February. This growth is a massive departure from last year's
trend, in which furnished and seasonal rentals declined 28 percent
during that same period. By contrast, the rest of the Nashville rental market saw a 9 percent
decline in rental inventory in the past few months. Similarly, in
Austin, Texas, furnished rentals
rose 129 percent compared to 2019, when they were down 30 percent
during that period.
"Many short-term vacation rental owners rely on rental income to
pay the property bills and meet their mortgage obligations," said
George Ratiu, senior economist,
realtor.com®. "If people aren't traveling or don't feel
comfortable staying in someone else's home -- that lost income
could lead to missed payments or even foreclosure. For this reason,
owners are looking for seasonal renters, who can provide occupancy
and income for a longer period and give owners the breathing room
to weather the current drop in short-term demand."
Shift is unlikely to ease local housing
shortages
Unfortunately, this shift is unlikely to have a
meaningful impact on local housing markets which are experiencing
historically low inventory -- down 19 percent year-over-year
nationally for the week ending May 9.
Many property owners are keeping the units furnished and focusing
on one- to three-month leases, which won't meet the needs of
typical renters looking for stable, long-term housing.
Typically, owners who are feeling financially strained might
look to sell a rental unit. However, selling a property is more
challenging in the age of COVID-19. Realtor.com®'s
latest published weekly data shows that homes are taking 13 days
longer to sell on average than the same time last year, the
steepest slowdown since 2013. And with homebuyer sentiment at its
lowest level since The Great Recession, selling properties is a
less viable option, leading many owners to convert to seasonal
rentals as a faster and less risky option.
"In the short-run, it's unlikely that we'll see many of these
units turn into more traditional rentals, as owners can likely make
more money with seasonal furnished rentals. However, the longer
COVID alters consumer behavior, the more difficult it will be for
vacation rental owners to cobble seasonal leases together, and this
could eventually mean an increase in for-sale inventory in these
markets," said Ratiu.
Top Ten Metros
with Seasonal Rental Inventory Growth
|
Rank
(Y/Y Gap in
Trend)
|
Metro
|
Y/Y Gap
in Trend
|
2019* Rental
Inventory
Growth
|
2020* Rental
Inventory
Growth
|
1
|
Nashville,
Tenn.
|
185%
|
-28%
|
157%
|
2
|
Austin,
Texas
|
160%
|
-30%
|
129%
|
3
|
Orlando,
Fla.
|
82%
|
10%
|
92%
|
4
|
Las Vegas
|
56%
|
0%
|
56%
|
5
|
Chicago
|
49%
|
-23%
|
26%
|
6
|
San
Antonio
|
49%
|
-12%
|
37%
|
7
|
New
Orleans
|
48%
|
26%
|
74%
|
8
|
Honolulu
|
47%
|
12%
|
60%
|
9
|
Jacksonville,
Fla.
|
42%
|
3%
|
45%
|
10
|
Bridgeport,
Conn.
|
35%
|
3%
|
38%
|
|
*Last week of
February vs last week of April
|
To learn more, visit our research portal.
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Media Contact:
Nicole
Murphy, nicole.murphy@move.com
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SOURCE realtor.com