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It's kind of frightening to think of the broader economic impact it would have on the whole real estate market if Airbnb went belly up. Aren't there a ton of ca

It's kind of frightening to think of the broader economic impact it would have on the whole real estate market if Airbnb went belly up. Aren't there a ton of cases where people are mortgaging multiple homes and paying them off with the revenue they generate? That cash just dried up over night and there doesn't appear to be any incoming federal support. Edit: Look, I'm all for affordable housing, but when viewing this within the context of a looming recession and potential financial crisis I can assure you that the last thing you want to do is add in a potential amplifier to a housing market crash. Houses may get cheaper, but everyone is going to suffer in very difficult to imagine ways. Corporate debt markets are looking scary as hell right now. If you threw a housing market meltdown at it right now, we could easily be looking at something much much worse than what we saw in '08.

shaneprrlt 7y ago
Our new reality is getting scarier.
usaar333 7y ago
Travel certainly will be hurt. All said, my guess is the hardest hit travel industry will be cruises, followed by resorts, followed by business travel (we've all learned to work remotely better). Vacation rentals will take a hit but will also absorb some of the loss of demand to cruises/resorts. Consequently, my guess is AirBnB owners aren't hit too long in the medium term (1 year out). Not too much demand hit in rural areas -- and in urban areas they can switch to long-term rentals.
pwned1 7y ago
I have a lot of cash sitting on the sidelines, waiting for opportunities like these in the next few monts.
mschuster91 7y ago
> It's kind of frightening to think of the broader economic impact it would have on the whole real estate market if Airbnb went belly up. Oh I (living in Munich) hope for AirBnB going belly up. This will free a LOT of apartments back to normal rental markets. The rental markets won't be "hit" at all, the landlords will only lose the difference between "30 days of rent at AirBnB prices" and "30 days of rent at market value". The winners will be those priced of their own home cities by hipsters and the neighbors of current AirBnBs who don't have to suffer from people running, essentially, illegal hotels in their houses - with people abusing apartments for sex orgies/porn sets, mass parties, or simply losing their keys and mashing on the doorbells.
- subpixel 7y ago
  NYC, same story. But, as others in the thread have suggested, what will rush in when these leveraged AirBnB hosts lose properties will not be a bunch of normals with jobs and families, it will be a bunch of new investors who can buy cheap with cash.
  - mschuster91 7y ago
    But these investors have to rent out at market prices, thus reducing load on rental markets
- pjc50 7y ago
  > the difference between "30 days of rent at AirBnB prices" and "30 days of rent at market value". Unfortunately this is huge - it's why rents have shot up in many cities.
sharkmerry 7y ago
Airbnb and VRBO have similar revenues (~2.6 billion). So im not sure the hosts will be out of options, but you aren't wrong that a ton of mortgages could be foreclosed due to the lack of revenue for hosts for the foreseeable future
ukabwlsbeux 7y ago
I don’t think that’s frightening at all. A bunch of rent seekers lose everything, and everyone else wins. This practice should be, and in some places is, illegal.
- colinmhayes 7y ago
  Airbnb isn't rent seeking. They're providing a valuable service to tourists. I find it very hard to see how short term rentals should be illegal.
  - CydeWeys 7y ago
    Hotels are a regulated industry for a reason and Airbnb is completely flouting the rules. No one wants to be a next-door neighbor to an Airbnb'ed apartment, and hotels are a more efficient use of real estate for housing a given number of tourists. So yeah, they're helping out tourists, but they're harming all the people in the city who live there and need a place to live. If you're primarily a tourist then Airbnb is good for you; if you live in a high cost city then it's most definitely not. And more of us are in the latter situation, me included.
    - PopeDotNinja 7y ago
      Rentals have been a thing since people have been travelers. It's easy to point a finger at Airbnb, but a lack of affordable housing existed long before they were around. You could argue that hotels are using space that could be used for housing locals, too. Is Airbnb a factor in prices going up, yes. Is Airbnb the only factor, clearly no.
      - CydeWeys 6y ago
        I clearly pointed out in my comment how hotels are vastly different from normal apartments that have been converted into short term rentals.
  - ukabwlsbeux 6y ago
    AirBnB is not rent seeking though I’m dubious of its value to society. People buying property in RESIDENTIAL areas to be used exclusively as short term rental units are rent seekers.
ss2003 7y ago
This would not be a bad thing. Airbnb has been driving up the cost of housing in many cities.
tylerchilds 7y ago
As someone that would like to buy a house one day, I welcome this. People owning multiple houses to rent out to vacationers that people would like to actually live in doesn't upset me at all. If people buying houses to rent on Airbnb artificially inflated the housing market, it's just a necessary correction and federal support would be a mistake.
- everyone 7y ago
  hear hear! fuck those greedy fuckers!
  - dang 7y ago
    Would you please stop posting unsubstantive and/or flamebait comments to HN? We ban accounts that do this, and have had to ask you before. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
    - everyone 6y ago
      That comment is about as substantive as many of its sibling comments, I just happen to have expressed the information in a highly elegant / terse way. Also, that is not flamebait imo, and was not intended as such. The purpose of flamebait is to bait others into an argument, there is no argument to be had with my comment, no lure or hint; it's a simply bold statement. As you can see, no one has replied.
- mandeepj 7y ago
  >People owning multiple houses to rent out to vacationers that people would like to actually live in doesn't upset me at all. If people buying houses to rent on Airbnb artificially inflated the housing market net-net : is n't both the same?
  - jankassens 7y ago
    Airbnb turns housing into hotels. Typically those are zoned differently, potentially subsidizing housing for locals at the cost of driving up prices for travelers.
agilebyte 7y ago
Isn't it equally frightening how Airbnb has contributed to the rise of real estate prices and rents?
koboll 7y ago
They would just switch to VRBO or a similar service.
atwebb 7y ago
I was thinking this the other day, it is a special type of vendor lock-in.
Ar-Curunir 7y ago
It’s entirely their fault; no-one asked them to make being a landlord their primary source of revenue.
awinder 7y ago
Airbnb would be “going up” if rentals cratered, losing it doesn’t have that many second-order effects. Vacation properties are going to get slaughtered for the next 2 years because no one wants to vacation.
cactus2093 7y ago
There are only so many possibilities for the housing market. One possibility would have been to take advantage of the boom times and strong economy over the past decade, and build lots of housing to support the huge influx of new jobs created in big cities. Make our prosperous cities actually feel prosperous, and accessible to anyone who wants access to opportunities. Creating this world would inherently mean that housing is not nearly as good of a capital investment for individuals. That would make property owners less vulnerable in an economic downturn. Low risk for low (financial) reward. But the public has and continues to overwhelming reject this option. Another possibility, is that we could have gone a very long time without a downturn, and let our housing values just increasingly get more and more expensive with no upper limit. This is clearly the path most homeowners were hoping for. It creates a more and more stratified society, where only the very wealthy and the very few lucky subsidized-housing lottery winners can live in or near prosperous cities. We're already there in many places, and it certainly would only keep getting more and more extreme if unchecked. And then there's the new scenario you suggest and that we may be approaching - a major crash that will lower prices that have grown unchecked for a long time. I would have really, really liked to see the first option. Maybe one day we will. But since that's off the table for the foreseeable future and the only remaining possibilities are the 2nd or 3rd options, it seems like a major correction in the housing market is the preferable one. Obviously the coronavirus outbreak itself where many people might get sick or die is terrible, and I really hope that the shelter in place measures will be effective to stop the spread. And I feel for people that are losing their jobs at this time. But as far as just the impact on the housing market, this correction may turn out to be a good thing for the majority of the population who are not wealthy homeowners. It could transfer a lot wealth from the older generations to the younger ones, whereas our society has been doing the extreme opposite for a long time now.
chewz 7y ago
Many people had been moving from bank deposits into short-term rentals in search of yield. Now they are also learning about value of liquidity.
deleted 6y ago
[deleted]
samsonradu 6y ago
I'm not sure you're assessing the damage that Airbnb inflicts to locals and the lower/middle class in major European cities - which also happen to be touristic hotspots. > Aren't there a ton of cases where people are mortgaging multiple homes and paying them off with the revenue they generate? So buyer beware does not apply to housing? In case you buy the wrong thing or in the wrong place or the wrong time you just get reimbursed?
compsciphd 6y ago
what do you think happened during the great depression? People before it got greedy and would buy property and mortgage it to buy the next, and so on and so forth. they were highly leveraged and lost it all because of that. The lucky ones were the ones that didn't mortgage nor collateralize the house they lived in, so they didn't become homeless.

shaneprrlt 7y ago

Our new reality is getting scarier.

usaar333 7y ago

Travel certainly will be hurt. All said, my guess is the hardest hit travel industry will be cruises, followed by resorts, followed by business travel (we've all learned to work remotely better). Vacation rentals will take a hit but will also absorb some of the loss of demand to cruises/resorts. Consequently, my guess is AirBnB owners aren't hit too long in the medium term (1 year out). Not too much demand hit in rural areas -- and in urban areas they can switch to long-term rentals.

pwned1 7y ago

I have a lot of cash sitting on the sidelines, waiting for opportunities like these in the next few monts.

mschuster91 7y ago

> It's kind of frightening to think of the broader economic impact it would have on the whole real estate market if Airbnb went belly up. Oh I (living in Munich) hope for AirBnB going belly up. This will free a LOT of apartments back to normal rental markets. The rental markets won't be "hit" at all, the landlords will only lose the difference between "30 days of rent at AirBnB prices" and "30 days of rent at market value". The winners will be those priced of their own home cities by hipsters and the neighbors of current AirBnBs who don't have to suffer from people running, essentially, illegal hotels in their houses - with people abusing apartments for sex orgies/porn sets, mass parties, or simply losing their keys and mashing on the doorbells.

subpixel 7y ago
NYC, same story. But, as others in the thread have suggested, what will rush in when these leveraged AirBnB hosts lose properties will not be a bunch of normals with jobs and families, it will be a bunch of new investors who can buy cheap with cash.
- mschuster91 7y ago
  But these investors have to rent out at market prices, thus reducing load on rental markets
pjc50 7y ago
> the difference between "30 days of rent at AirBnB prices" and "30 days of rent at market value". Unfortunately this is huge - it's why rents have shot up in many cities.

sharkmerry 7y ago

Airbnb and VRBO have similar revenues (~2.6 billion). So im not sure the hosts will be out of options, but you aren't wrong that a ton of mortgages could be foreclosed due to the lack of revenue for hosts for the foreseeable future

ukabwlsbeux 7y ago

I don’t think that’s frightening at all. A bunch of rent seekers lose everything, and everyone else wins. This practice should be, and in some places is, illegal.

colinmhayes 7y ago
Airbnb isn't rent seeking. They're providing a valuable service to tourists. I find it very hard to see how short term rentals should be illegal.
- CydeWeys 7y ago
  Hotels are a regulated industry for a reason and Airbnb is completely flouting the rules. No one wants to be a next-door neighbor to an Airbnb'ed apartment, and hotels are a more efficient use of real estate for housing a given number of tourists. So yeah, they're helping out tourists, but they're harming all the people in the city who live there and need a place to live. If you're primarily a tourist then Airbnb is good for you; if you live in a high cost city then it's most definitely not. And more of us are in the latter situation, me included.
  - PopeDotNinja 7y ago
    Rentals have been a thing since people have been travelers. It's easy to point a finger at Airbnb, but a lack of affordable housing existed long before they were around. You could argue that hotels are using space that could be used for housing locals, too. Is Airbnb a factor in prices going up, yes. Is Airbnb the only factor, clearly no.
    - CydeWeys 6y ago
      I clearly pointed out in my comment how hotels are vastly different from normal apartments that have been converted into short term rentals.
- ukabwlsbeux 6y ago
  AirBnB is not rent seeking though I’m dubious of its value to society. People buying property in RESIDENTIAL areas to be used exclusively as short term rental units are rent seekers.

ss2003 7y ago

This would not be a bad thing. Airbnb has been driving up the cost of housing in many cities.

tylerchilds 7y ago

As someone that would like to buy a house one day, I welcome this. People owning multiple houses to rent out to vacationers that people would like to actually live in doesn't upset me at all. If people buying houses to rent on Airbnb artificially inflated the housing market, it's just a necessary correction and federal support would be a mistake.

everyone 7y ago
hear hear! fuck those greedy fuckers!
- dang 7y ago
  Would you please stop posting unsubstantive and/or flamebait comments to HN? We ban accounts that do this, and have had to ask you before. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - everyone 6y ago
    That comment is about as substantive as many of its sibling comments, I just happen to have expressed the information in a highly elegant / terse way. Also, that is not flamebait imo, and was not intended as such. The purpose of flamebait is to bait others into an argument, there is no argument to be had with my comment, no lure or hint; it's a simply bold statement. As you can see, no one has replied.
mandeepj 7y ago
>People owning multiple houses to rent out to vacationers that people would like to actually live in doesn't upset me at all. If people buying houses to rent on Airbnb artificially inflated the housing market net-net : is n't both the same?
- jankassens 7y ago
  Airbnb turns housing into hotels. Typically those are zoned differently, potentially subsidizing housing for locals at the cost of driving up prices for travelers.

agilebyte 7y ago

Isn't it equally frightening how Airbnb has contributed to the rise of real estate prices and rents?

koboll 7y ago

They would just switch to VRBO or a similar service.

atwebb 7y ago

I was thinking this the other day, it is a special type of vendor lock-in.

Ar-Curunir 7y ago

It’s entirely their fault; no-one asked them to make being a landlord their primary source of revenue.

awinder 7y ago

Airbnb would be “going up” if rentals cratered, losing it doesn’t have that many second-order effects. Vacation properties are going to get slaughtered for the next 2 years because no one wants to vacation.

cactus2093 7y ago

There are only so many possibilities for the housing market. One possibility would have been to take advantage of the boom times and strong economy over the past decade, and build lots of housing to support the huge influx of new jobs created in big cities. Make our prosperous cities actually feel prosperous, and accessible to anyone who wants access to opportunities. Creating this world would inherently mean that housing is not nearly as good of a capital investment for individuals. That would make property owners less vulnerable in an economic downturn. Low risk for low (financial) reward. But the public has and continues to overwhelming reject this option. Another possibility, is that we could have gone a very long time without a downturn, and let our housing values just increasingly get more and more expensive with no upper limit. This is clearly the path most homeowners were hoping for. It creates a more and more stratified society, where only the very wealthy and the very few lucky subsidized-housing lottery winners can live in or near prosperous cities. We're already there in many places, and it certainly would only keep getting more and more extreme if unchecked. And then there's the new scenario you suggest and that we may be approaching - a major crash that will lower prices that have grown unchecked for a long time. I would have really, really liked to see the first option. Maybe one day we will. But since that's off the table for the foreseeable future and the only remaining possibilities are the 2nd or 3rd options, it seems like a major correction in the housing market is the preferable one. Obviously the coronavirus outbreak itself where many people might get sick or die is terrible, and I really hope that the shelter in place measures will be effective to stop the spread. And I feel for people that are losing their jobs at this time. But as far as just the impact on the housing market, this correction may turn out to be a good thing for the majority of the population who are not wealthy homeowners. It could transfer a lot wealth from the older generations to the younger ones, whereas our society has been doing the extreme opposite for a long time now.

chewz 7y ago

Many people had been moving from bank deposits into short-term rentals in search of yield. Now they are also learning about value of liquidity.

deleted 6y ago

[deleted]

samsonradu 6y ago

I'm not sure you're assessing the damage that Airbnb inflicts to locals and the lower/middle class in major European cities - which also happen to be touristic hotspots. > Aren't there a ton of cases where people are mortgaging multiple homes and paying them off with the revenue they generate? So buyer beware does not apply to housing? In case you buy the wrong thing or in the wrong place or the wrong time you just get reimbursed?

compsciphd 6y ago

what do you think happened during the great depression? People before it got greedy and would buy property and mortgage it to buy the next, and so on and so forth. they were highly leveraged and lost it all because of that. The lucky ones were the ones that didn't mortgage nor collateralize the house they lived in, so they didn't become homeless.