Time to Sell Your Vacation Home?
COVID-19 has hit the travel industry the hardest. Even as things are starting to reopen, it is difficult to tell how long it will take for people to start traveling and taking summer vacations. That industry may take time to recover. Airbnb has over 660,000 listings in the United States. Homeowners who rent their vacation homes via Airbnb have been hit the hardest during this time. As a result, some vacation owners are thinking about selling.
According to CNN:
“With global travel screeching to a halt during the pandemic, a number of Airbnb hosts are planning to sell their properties…These desperate moves come as hosts face the possibility of losing thousands of dollars a month in canceled bookings while bills, maintenance costs, and mortgage payments pile up.”
If you are a vacation property owner, you are most likely financially hurt by the decrease in travel. Normally summer vacation season is the busiest, however things are slow at the moment. A survey showed that 48% of Americans have canceled their summer trips. 36% don’t have any plans for summer vacations and only 16% are planning on proceeding with their summer vacation plans.
When asked how long people will wait before traveling, 29% said that they are planning to travel within the next 6 months. 71% will not be traveling during the next 6 months or aren’t sure about what to do. This results in a large income loss.
If you are thinking about selling your investment property, here are a few factors that will show that selling might be the best move.
1. Inventory Shortage
There is a shortage of inventory as compared to demand. Many people are looking to buy a home like yours. National Association of Realtors stated that the total housing inventory or available homes on the market has dropped 19.7% over the past year.
There is only a 4.1 month inventory supply across the country. For the market to be balanced there needs to be enough homes listed and available for buyers to purchase. Typically this is a 6 month supply of inventory. We don’t have enough inventory on the market. As a result, selling is the best option at the time. Buyers are looking for homes. Vacation homes will be purchased as primary homes. Lower inventory equals more demand and in turn higher selling price and quicker turnaround.
2. Home Prices
The shortage in inventory is what helps the prices from depreciating. Home prices are expected to appreciate over the next year. Selling a home during this time will guarantee a high sales price. You will have more equity in the home as a result of of the selling price. If you have loss of rental income, the high sales price will help balance out the loss.
While we don’t know when people will start traveling and vacationing, we do know it might help to sell your vacation rental. Take advantage of the low inventory and sell. If you are considering selling, contact the Real Estate Experts at Prestige Waterfront Realty at 954-830-7000. We specialize in South Florida Real Estate.