AUSTIN, Texas — A Twitter post that has recently gained traction claims that Austin is one U.S. city where analysts expect to see an "Airbnb crash."
According to housing experts, revenue for rental units is down due to a large drop in demand.
As Austin's population exploded during the pandemic, so did the number of people getting into the short-term rental business.
"Maybe they bought two, or three, or four and that caused the supply of Airbnb's to go up very, very fast. At the same time, the demand isn't quite the same as it was during the pandemic," said Nick Gerli, the CEO of Reventure Consulting & App.
Gerli is a data consultant for homebuyers and real estate investors. On Twitter, he posted a breakdown of how the short-term rental market has changed, citing revenues in Austin dropping an astonishing 46%.
"The expenses of operating an Airbnb in Austin, and Texas more broadly, are very, very high in general due to cleaning fees and, you know, taxes and things like that. But the property tax piece is huge," Gerli said.
Gerli pointed to data from a rental analysis site called "All The Rooms." Numbers from that site show the average short-term rental in Austin made around $4,600 in May of 2022, but only brought in about $2,500 this May.
"I think the 50% drop in revenue is honestly just headlines," said Blake Carter, an Airbnb operator in Austin.
Carter is a native Austinite who runs a company that operates over 60 short-term rentals in Central Texas. He admitted the business has seen a dip in revenue, but that it's nowhere near what some websites claim.
"We have a pretty good scope on it. We've seen on average maybe 15% to 20% drop in gross revenue," Carter said. "It used to be you just put a house up on the market and it would rent out regardless of how nice it was or anything. You just put a bed, a couch, in a house and it rents out."
Carter admits the Airbnb rental market is oversaturated right now, which has caused an issue for homeowners as well.
"It affects the supply of rental housing. It affects the supply of houses for sale, and it's definitely played a part in the inflationary housing crises that we've experienced," Carter said.
Although times are tough right now, both Carter and Gerli said they have high hopes that the market will begin to settle in again over the next year or two.
Boomtown is KVUE's series covering the explosive growth in Central Texas. For more Boomtown stories, head to KVUE.com/Boomtown.