How might the Airbnb market crash affect homeownership in the Bay Area?

A: A potential crash of the Airbnb market in the Bay Area is unlikely to have a significant impact on homeownership, due to the existing severely low inventory levels in the market.

This was evidenced in 2020, when there was a sudden decline in short-term rental (STR) occupancy rates without causing disruption to the broader housing market.

Depending on the financial circumstances and decisions made by individual homeowners, some may opt to hold onto their properties, anticipating a recovery in the Airbnb market, while others may choose to sell due to financial pressures or shifts in their investment strategies. While this could offer more opportunities for buyers, even an influx of inventory from those offloading their STRs won’t make a huge dent.

Currently, there are approximately 1.4 million STR listings in the United States, while there are only around 600,000 active listings for sale. HousingWire’s lead analyst, Logan Mohtashami, explains that in a normal period, there would typically be between 2 to 2.5 million active listings.

Even if all those homes were suddenly listed overnight, it would require an extended period before the additional inventory could bring levels back to normal.

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Article originally published in the San Francisco Chronicle on July 16, 2023.