Are Airbnbs Effecting the Housing Market?

Are Airbnbs effecting the housing market?

Since Airbnb’s start in 2008 it has grown into a colossal business based on the very trending “peer to peer platform.” It has become the second most valuable U.S. start up in the world right behind Uber, coming in at a whopping 31 billion. That is nothing to bat an eye at. If Airbnb were a country it would be ranked the 99th richest country in the world, spotted right behind Libya, out of 197 countries. Airbnb has over 3,000,000 accommodations in over 65,000 cities across the world, with a growth of one thousand percent from 2010-2014. This large company is turning normal residential homes into luxurious tourist getaways. It doesn’t take a rocket scientist to realize that there is a cause & effect factor to be had on the housing market in bigger cities, not to mention cities with great attractions like sporting events…

I priced out two different weekends from Airbnb’s website for listings in the Arena District of Columbus, Ohio for a family with two children, February 28th to March 3rd & March 14th – March 17th. If you’re big into body building, then you will know that The Arnold Classic will be going on during one of these weekends. We took 4 listings near Battlelle Grand Ballroom during the Arnold Classic and compared those exact same listings to 2 weeks later, March 14th- 17th. What we found is remarkable! The average price for March 14th – 17th was $256.25. These exact same listings on the weekend of the Arnold Classic are $454.50. That is a 76% increase! These numbers can also be found across the country in every big city that host large sporting events like football, soccer, & baseball games.

My conclusion is that home values will rise due to this enormous conglomerate. Investors will buy up homes to turn them into Airbnbs reducing inventory for the average Americans, causing prices to rise. People from out of town will be spending money in the local shops & businesses, which means locals will be able to put more of that out of town money back into the city. Also, Airbnb owners will need to make sure that their properties are well maintained and look appealing to short term tenants. This in return could keep our city streets looking clean and updated, whereas traditional rentals may have tenants that don’t care about how their property looks cause it’s not theirs. We see this a lot in the real estate industry. Neighborhoods that go from mostly home owners to mostly rental properties can lower the price of homes in that neighborhood.

I notice a lot of stigma about Airbnb rentals, but I truly don’t see a too many negatives of Airbnb being here. Whether you like the company or not, we’ll have to wait and see what happens, simply because we know that Airbnb is here to stay for now.

Sources: Williams College Department of Economics, CNNMoney (New York), StatisticsTimes.