One thing is for certain, COVID-19 has affected all aspects of our lives. Real estate has not been immune either as most real estate markets experienced a temporary set back, but many cities are once again humming right along.
However, there is one area in real estate to keep an eye that may affect housing affordability.
Many people in Nashville rely on Airbnb or other forms of short term rentals for secondary income. As hospitality services come to a standstill during the pandemic, rental hosts are wondering how long this will affect their ability to pay the mortgage on these homes.
Whether due to the primary job loss of the hosts or to the temporary but dramatic decrease in customers, many short term rental owners may be forced to make difficult decisions of selling their investment property.
As “Safer at Home” orders continue to lift, it will be easier to predict when travel will pick back up. Until then, hosts that wish to continue renting will have to lower their rates or transition to long term rentals. For many, lowering rates won’t be an option. While long term rentals potentially offer steady income, hosts would lose the flexibility and potential for higher overall daily rates. Another option for short term rental owners is listing.
How does this Affect Home Affordability?
Although devastating for the owners of short term rentals, this could be a positive opportunity for home buyers if a flood of home inventory all of a sudden hits the market. More inventory could help slow down the increase of home prices in Nashville. Combine that with near record-low mortgage rates and it’s very possible that home affordability in the metro could see a boost in the next months to come.