“It’s An Airbnbust”: Home In Palm Springs Falls Quicker Than Meme Stock

DFW housing and macro analyst Amy Nixon has raised concerns about the potential for an ‘Airbnbust’ to increase inventory in the housing market. Although this scenario has yet to materialize, it remains to be seen whether owners of heavily leveraged Airbnb properties can withstand a prolonged downturn in the short-term rental market.

On X, Nixon pointed out that Zillow housing data shows a home in Palm Springs, California, that sold for $1.3 million in May 2023 and was recently listed for $625k. She called this the latest example of an “Airbnbust.” 

“Just because it hasn’t happened at scale, doesn’t mean it isn’t happening,” Nixon said. 

This home in Palm Springs, CA sold for $1,300,000 in May of 2023

It’s now being dumped for $625,000

It’s an Airbnbust

Just because it hasn’t happened at scale, doesn’t mean it isn’t happening

The company (ABNB) is fine. The person who bought this is not pic.twitter.com/uceIjU9CZ6

— Amy Nixon (@texasrunnerDFW) February 25, 2024

Nixon followed up the post with this chart! 

Is this a meme stock chart?

Failed crypto token?

No, it’s a house

This home has round-tripped back to within striking distance of 2020 pricing pic.twitter.com/cFZrqh7TqJ

— Amy Nixon (@texasrunnerDFW) February 25, 2024

One X user commented on Nixon’s post: “It’s a town of 45k. Like talking about the housing market of Saginaw.” 

She responded: “These are exactly the kinds of towns that got bid up in speculative frenzies during the pandemic.” 

These are exactly the kinds of towns that got bid up in speculative frenzies during the pandemic

I highlighted it because my Case Schiller National home price forecast for 2024 is nominally slight positive, with pockets of distress

This is a pocket of distress

— Amy Nixon (@texasrunnerDFW) February 25, 2024

“The first thing that jumps out is Short Sale on the listing. This was so common for years after 2008 but had not seen it for a long time,” another X user said. 

The first thing that jumps out is Short Sale on the listing. This was so common for years after 2008 but had not seen it for a long time

— John Ahmuty (@Cjcdad0925) February 25, 2024

Over the last 12 months, vacation rental owners and real estate agents have described what they say is a downturn in the short-term rental market. Some on X have used the hashtag “Airbnbust.” 

Is X done talking about the AirbnBUST?

Well, we’re not done with those former STR’s hitting the market 😅 pic.twitter.com/WKN6QaChQN

— Nick El-Tawil (@tawillionaire) February 25, 2024

According to Zillow, there are currently 341 homes available for sale in Palm Springs, CA

🚨172 of them have been listed or relisted in the last 4 weeks 🚨

Inventory literally DOUBLED in January in the Airbnbust epicenter pic.twitter.com/y9vxYnWjvO

— Amy Nixon (@texasrunnerDFW) February 2, 2024

Sabrina Must,37, who owns a one-bathroom Airbnb property in Encinitas, California, about 25 miles north of San Diego, complained to WSJ in an interview that her listing only fetches $275 per night. During Covid, she had the property listed for $1,000 per night. 

“I’ve felt a massive drop,” adding, “I am so beyond stressed by it.” 

According to data from AllTheRooms, the number of Airbnb rentals in the US jumped from 200,000 seven years ago to nearly 1 million in 2023. 

As for all those millennials and GenZers who used stupid amounts of leverage to buy Airbnb properties, it’s widely understood some of them have the weakest balance sheets to weather a prolonged downturn in the short-term rental market, which might force them to panic sell. 

Let’s not forget we have penned two notes about the coming Airbnb bust in “Why AirBnB Owners Are About To Be Forced Property Sellers” and “AirBnB Bubble Bursts: Investor Home Purchases Crash 45% In Biggest Drop Since 2008.”