In May 2020 — a month and a half after the coronavirus outbreak was declared a pandemic — the number of passengers screened at Transportation Security Administration checkpoints was just 10%, on average, of the total in May of the previous year.
This put an immense strain on the U.S. hospitality industry, including Airbnb hosts. Through March 2021, an average of more than five times as many passengers were flying per day compared to May 2020. But despite the uptick in travelers, a new MagnifyMoney analysis of Airbnb data shows that short-term rentals cratered in some of the markets examined. In three markets, the number of active short-term rentals was down 40% or more since last May.
But the coronavirus crisis isn’t the only reason for the tough rental market. In many markets, new laws and regulations have complicated the process of running short-term rentals.
Before the pandemic, research appeared to show that Airbnbs were harming local housing markets, despite being a way for vacationers to save and for investors to make money.
As seen by the thousands of listings across markets that make entire apartments or homes available for much of the year, becoming an Airbnb host became fairly popular. But the pandemic changed the economics of owning a short-term rental. According to MagnifyMoney research, the number of active listings fell in 19 of the 20 markets examined.
|Change in Airbnb listings between May 2020 and March 2021|
|Market||May 2020 listings||March 2021 listings||Change|
|Broward County, FL||7,470||7,611||2%|
|Clark County, NV||6,976||6,244||-10%|
|Hawaii (entire state)||16,087||14,367||-11%|
|New Orleans, LA||6,054||5,418||-11%|
|San Francisco, CA||5,485||4,544||-17%|
|Los Angeles, CA||26,356||20,941||-21%|
|Santa Cruz County, CA||1,378||1,084||-21%|
|San Diego, CA||9,715||7,326||-25%|
|Twin Cities metro, MN||3,515||2,533||-28%|
|New York, NY||33,740||23,256||-31%|
|Jersey City, NJ||1,865||731||-61%|
In some markets, changes were more dramatic. For example, the number of active listings fell by 61% in Jersey City, N.J., between May 2020 and March 2021.
But Jersey City wasn’t the only place where short-term rental owners decided — or were forced — to do something else with their properties. In Seattle and Oakland, Calif., the number of active listings fell by 42% and 40%, respectively, over the same period.
In June 2020, New York City and Airbnb settled an ongoing legal battle over a law intended to help the city crack down on illegal short-term rentals. This may have encouraged Airbnb hosts to drop out of the market and could explain part of the 31% drop in listings between May 2020 and March 2021. Jersey City, likewise, enacted stricter regulations on short-term rentals in 2019 that went into effect on Jan. 1, 2021, likely helping to explain the massive drop in listings there.
It wasn’t all bad news in the short-term rental market, however. In Broward County, Florida — which includes Fort Lauderdale — the number of active listings rose 2% from May 2020 to March 2021.
In other similarly sunny locales, the short-term rental markets remained relatively robust, even amid decreases. In Clark County, Nevada — which includes Las Vegas — the number of active listings fell by 10%. Meanwhile, in Hawaii (note that this market includes the entire state), the number of listings fell by just 11%.
Airbnb hosts wondering whether to keep going or sell should make sure they’re thinking about both now and the future, says LendingTree chief economist Tendayi Kapfidze.
“Understanding if the challenges are due to short-term or longer-term issues would be key in making a decision,” he says. “In either case, sell before losing the property to foreclosure. In a strong housing market, you could make a profit depending on when you bought and local conditions.”
Along with the number of active listings, the number of reviews per listing fell in three-fourths (14 of 20) of the markets examined. In New Orleans, for example, active listings received an average of 2.1 reviews a month in May 2020, but that figure fell to 1.7 in March 2021 — one of the biggest drops across the U.S. markets.
|Change in reviews per listing between May 2020 and March 2021|
|Market||May 2020 reviews per listing||March 2021 reviews per listing||Change|
|Santa Cruz County, CA||2.0||2.2||13%|
|San Diego, CA||1.8||1.9||7%|
|Clark County, NV||1.8||1.9||1%|
|Broward County, FL||1.5||1.5||0%|
|Twin Cities metro, MN||1.7||1.7||-3%|
|Jersey City, NJ||1.7||1.4||-15%|
|Los Angeles, CA||1.8||1.5||-16%|
|New Orleans, LA||2.1||1.7||-19%|
|San Francisco, CA||1.7||1.3||-20%|
|New York, NY||1.2||1.0||-21%|
|Hawaii (entire state)||1.4||1.1||-22%|
While not every visitor leaves a review, the average number of reviews per listing is a good proxy for how busy listings are. In New Orleans, not only did the number of listings fall significantly, but so did the number of people visiting short-term rentals and leaving reviews.
The state of Hawaii saw the steepest decline in reviews per listing, falling from an average of 1.4 to 1.1 — a 22% decline.
But not all short-term rental markets suffered a dip in both listings and reviews per listing, with San Diego being a notable exception. The number of active listings there fell by 25%, but reviews per listing increased by 7%, on average. This could mean that as less appealing or competitive listings went off the market, the best listings received more customers.
A significant change in how short-term rentals were operated between May 2020 and March 2021 was in the average number of minimum nights that guests were required to stay.
As many short-term listings were leaving the market, the ones that stuck around required longer minimum length stays. In 15 of the 20 markets analyzed, the average minimum nights required to book a short-term rental increased.
|Change in average minimum stay length between May 2020 and March 2021|
|Market||May 2020 minimum stay length||March 2021 minimum stay length||Change|
|New York, NY||6.1||20.6||237%|
|Jersey City, NJ||7.0||20.8||195%|
|Los Angeles, CA||11.1||17.0||53%|
|Hawaii (entire state)||5.3||7.0||31%|
|Twin Cities metro, MN||3.7||4.3||15%|
|San Francisco, CA||12.8||14.3||12%|
|Santa Cruz County, CA||3.5||4.0||11%|
|San Diego, CA||4.6||4.8||6%|
|New Orleans, LA||7.2||7.0||-3%|
|Clark County, NV||7.5||7.0||-6%|
|Broward County, FL||5.7||4.7||-17%|
In some cases, the average stay required to book a short-term rental increased due to changes in legislation. That was the case in New York and Jersey City, where the average minimum length of stay went from single digits to above 20 — increases of 237% and 195%, respectively.
Denver is another city that adopted new rules around running short-term rentals. In Colorado’s capital, hosts can only rent out primary residences, which may have impacted how locals operated their short-term rentals.
Boston, like New York, Jersey City and Denver, has strict rules around running Airbnbs. Relatedly, the city has the longest average minimum nights required per stay of the 20 markets examined at 32.7.
Not all cities that saw an uptick in the minimum required length of stay enacted new legislation, though. In Seattle, the average minimum required nights to stay in an Airbnb went from 11.3 to 12.8, increasing by 14% during the 10 months covering May 2020 and March 2021.
In Broward County, Columbus, Ohio, Clark County, Nevada, and New Orleans, the average minimum required stay length fell over the period analyzed. These markets tended to cater to short-term stays already with average minimum lengths of roughly less than a week.
While the short-term rental market has been a tough one, owners of homes have not necessarily had difficulty making the most of their investment. In some of those same cities or regions where the number of short-term rentals crashed, home values soared.
In fact, MagnifyMoney’s analysis of Zillow data shows that the average home value was up in 19 of the 20 markets analyzed. (It’s important to note that the markets don’t align perfectly because the Airbnb and Zillow data were tracked differently, but researchers went with the nearest or most similar comparison when possible.)
The San Diego and Columbus, Ohio, housing markets, in particular, were looking good for sellers, with median home values increasing by 12% from May 2020 to March 2021.
Despite the volatility between May 2020 and March 2021, now could be a good time to get into the short-term rental market, Kapfidze says.
“Travel demand will be higher than last year, and there is a lot of pent-up demand,” Kapfidze says. “Hotels may be close to capacity, and some travelers may still want a measure of distancing from public spaces. Dynamics will vary by location, though, so make sure you understand your local market.”
MagnifyMoney researchers analyzed Inside Airbnb data across 20 short-term rental markets to estimate changes between May 2020 and March 2021.
Researchers used the Inside Airbnb data to estimate the number of active listings. Researchers then compared those active listings across price, average monthly reviews, minimum required stay length and average days available to rent.
Researchers chose May 2020 to March 2021 to determine how the coronavirus crisis may have affected these markets. Active listings were defined as any listing with at least one review.
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