Short-Term Rental Supply Is Outpacing Demand as Listings Soar

AirDNA reported that property listings on short-term rental platforms were up 23 percent in August compared to last year while average daily rates' (ADRs) growth slowed, trailing costs caused by inflation. "Due to the supply increases, hosts have faced an uphill battle in the effort to have cover costs with high inflation, currently tracking above 8 percent in the U.S. as per the August Consumer Price Index (CPI)," the report noted; ADRs "were up a scant 2.8 percent year-over-year in August, following a 3.8 percent ADR increase in July." AirDNA added that increased listings, elevated labor costs, and ongoing inflation "will continue to put pressure on revenue per available listing (RevPAR), which hit record levels in 2021." Occupancy levels slipped in August year-over-year, and the current rate remains 7.1 percent above pre-pandemic levels. Average daily rates at short-term rentals are at $288 per night, a 22.8 percent gain over 2019. Demand rose 19.8 percent in August compared to the year before, up from 17.8 percent in July. Redfin's deputy chief economist Taylor Marr said a spike in available listings on short-term rental platforms in August is "coinciding perfectly with where we'd normally expect them to hit the for sale market." The increase in available homes could ultimately stress nightly rates, with AirDNA's report concluding that "markets with the highest year-over-year increase in listings (40 percent growth or more) are seeing the sharpest decreases in occupancy, ADR, and RevPAR."

Inman (09/22/22) Taylor Anderson

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