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SARE Dec 2022 Residential Real Estate Data Trends

This is The Proptech Scout’s first guest-contributed article- a monthly real estate market data newsletter by SARE (Subtle Asian Real Estate) Founder, Nelson Lin.

In this month’s Residential Real Estate Data report, we explore the narrative hiding in three charts for SFH rentals, short term rentals, and residential permits.

Given the vernacular in the last two years, we see a surprising decline in the SFH rental market with a 7% jump for homeowners. This trend likely comes from mom-and-pop landlords selling their rentals as starter homes rather than hedge funds deciding to become generous.

Ignoring the terrible y-axis scaling we see this trend continuing despite higher mortgage rates.

Given record rises in SFH rent, it makes sense that landlords are still building like we don’t have enough SFH inventory (we don’t). Multifamily developers are popping out buildings like Nick Cannon pops out kids, and we expect opportunities to appear in 2023 as bridge loans begin to mature in a high interest rate environment.

If I Had a Nickel For Every Short Term Rental Conversation I’ve Had With a New Investor I’d Be Able to Invest in Multifamily

This is the year everyone and their grandma started getting into Airbnb aka Short Term Rentals. According to AirDNA, even though the number short term rental of bookings increased y-o-y, the number of new listings increased at an even faster pace leading to an average decline of 6% of nights booked.

Typically short term rentals (the majority of new Airbnb listings in the pandemic) will often see a large decrease in revenue in time of economic pain. Given the record yield curve inversion, operators should increase their cash positions to prepare for a possibly tough 2023.

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