New Phoenix Real Estate Trend Worsens Housing Market Shortage, Expert Says | New
PHOENIX – The popularity of Phoenix as a vacation destination has fueled the investment property market, according to a recent Wall Street Journal report.
The popularity has spawned a new trend across the valley, where people are buying properties and turning them into rentals. A real estate expert says that while the trends favor investors, the purchases will inevitably tighten the already existing housing shortage.
Valley realtors are seeing an increase in the number of people purchasing luxury homes to list on vacation rental sites like Airbnb. Some rentals cost over a thousand dollars a night.
Mark Stapp, director of real estate programs at ASU’s WP Carey School of Business, said people can’t get into accommodation or renting if they only own one or two homes.
But, new tools and technologies have opened up the game to ordinary people. The simplicity of booking a long-term vacation to a home, not a hotel, from your phone has changed the accommodation industry.
“A whole industry is starting to evolve around this,” Stapp said. “[Phoenix is] a resort destination community anyway. We have amenities that support people’s desire to be here and now you have more options.
At first, people rented their homes using apps like Airbnb and VRBO. Then the investors started buying houses and putting them on the apps. Now, big hotel companies are getting into the game, offering services to those who own properties for short-term rental.
Stapp said he can see the benefits for investors, but the new trend is amplifying the current housing shortage in Phoenix.
“I don’t think this creates a critical situation, but I think it exacerbates the current shortage of stocks,” he said. “It’s a good business model when you have the right property. “
Only time will tell how much this new industry, where the world of hospitality intersects with the real estate market, is taking off.