Airbnb's alleged revenue crisis has sparked a debate among real estate agents, economists, and the company's press team after one expert declared that their loss of profits is likely to cause a housing crash "on par with the 2008 subprime crisis" in some cities.
With revenues dropping to almost 50 per cent in Phoenix, Arizona, Austin, Texas, and Sevierville, Tennessee, real estate agent Nick Gerli tweeted, "The Airbnb collapse is real. Revenues are down nearly 50% in cities like Phoenix and Austin."
"Watch out for a wave of forced selling from Airbnb owners later this year in the areas hit hardest by the revenue collapse."
On Tuesday, he tweeted that the crisis is "scary" simply due to the amount of Airbnbs being listed versus homes to live in.
Economist Jamie Lane, senior vice president at AirDNA, a company which tracks performance and monitors trends in short-term rentals, however, says that data from AllTheRooms is inaccurate and Airbnb's profits only fell "by just above 3 percent," according to MSN.com.
Airbnb has long been accused of contributing to the housing crisis that's happening across the United States, as well as in the UK and certain areas of Europe.
It's reminiscent of the 2008 housing market crash that occured after predatory lenders were caught giving out loans to individuals likely to default on them - and when a large group of home-owning individuals could no longer pay their mortgages, this caused a crisis for the banks who began to collapse and required a government bailout.
Meanwhile, homeowners were holding 'toxic assets' - since suddenly no one could afford to buy, home prices plummeted, and individuals were left hanging on to properties that they couldn't afford and couldn't sell.
Similarly, the collapse of Airbnb would trigger a similar effect. Currently, according to Airbnb, they have more than 4 million hosts all over the world - which means a large percentage of those individuals owns the property and makes payments on it monthly.
Should the public decide to stop renting Airbnbs, all of these property owners would be stuck holding on to homes that they can't make payments on, or sell.
Other cities that have seen significant drops this year compared to 2022 include Sevierville, Tennessee, where revenues have dropped by 47.6 percent; San Antonio, Texas, with a 43.8 percent decline in revenue; Nashville, Tennessee, with a 39 percent drop; Denver, Colorado, with a 38.6 percent drop; New Orleans, Louisiana, with 37 percent drop; and Seattle, Washington, with a 35.2 percent drop.
All data was calculated as a three-month average revenue per listing for May 2023, compared to May 2022, according to Newsweek and AllTheRooms.
Mr Gerli, who made the initial tweets that sparked the debate, also write: "Data from AllTheRooms shows 1 million Airbnb/VRBO rentals" in the US. Compared to only 570k homes for sale. Creates huge home price downside if struggling Airbnb owners elect to sell."
When it comes to Phoenix, Mr Gerli wrote that the number of short-term rentals, which is estimated at 18,000, is "more than double the number of for sale listings," estimated at 8,000.
"Mix the huge Airbnb supply with revenues down -50% and you get a cocktail for massive forced selling," Mr Gerli tweeted.
