Tim Hubbard discusses how COVID-19 has shifted housing supply and demand in the U.S., with effects particularly relevant to short-term rentals. Key points: increased remote work driving demand for more personal space, potential household 'splits' (roommates separating, divorces) increasing housing demand, and uneven geographic impacts tied to high-density, high-cost cities.
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Welcome to Short Term Rental Riches. Quick actionable ideas to help you along your real estate investment journey, but with a specific focus on short term rentals. Welcome back to the Short Term Rental Riches podcast. Happy you're here again as always. Today we're talking about a big force in the real estate market. Basically shapes every market and why those markets go up and down and that's supply and demand. We've talked about it in prior episodes and why shape way form or another. And today there's an interesting one. I want to talk about some of the potential supply effects, our demands for housing that have come from COVID So we've talked a little bit about the trends before. You know, people are leaving bigger cities that started before COVID actually, and dense, high cost of living areas. But there's some really interesting things that have happened with COVID specifically. And I know we're still kind of going through this. If you're listening to this in real time, things are good on the short term rental front here in a lot of the US I know outside of the US Things are tight still. Columbia, where I've been living, short term rentals there, regulations, that's not a good combo. It wasn't a good place with regulations to begin with. But that city has locked things down. So if you were running a short term rental business there, my heart goes out to you. You got crushed and still feeling those effects. But here in the U.S. you know, we had about six weeks of a downturn and things are, are booming. We don't have international guests, of course, but we're still doing well. And all of that is based off supply and demand. So not every city is doing well, obviously. And I want to talk about just a few little things that you maybe haven't considered. They could come from COVID from the quarantine that we've experienced, from being locked in maybe a small apartment in a small space. And one of them is that people are working from home. Right. And now if you are with your family, you're used to working in an office and you had your space and you've been working from home this whole time. Well, now you're probably thinking that it would be nice to have more space. So working from home is not going to go away. That's. I mean, more people are going to be working from home after Covid than they were before. So people are going to be looking for a little more space. If they're buying a personal residence, maybe they're going to look for a place that has a separate office space now in their home, whereas before they didn't. So, so that's one thing that's going to make a little bit of an impact, but one that's probably going to make a bigger impact is that people are living in these small spaces. Let's say one that might make a bigger impact is that there's actually a lot of people in non romantic relationships living together. Roommates. This is much more common in the high density, higher cost of living places. Los Angeles, for example, New York, Seattle. It's common to have a roommate that you're not romantically involved with. Now if you've been quarantined for several months, you might be reconsidering having a roommate and you might want some more space. And so let's just imagine that these roommates break up. You know, they, they both go their own ways. And that happens for, you know, thousands of people, thousands of households that all have roommates. Well, if they all split, that just doubled the demand that these people need. Whereas two people are in one house now they're going to be looking for individual houses. So that's a lot of extra demand that maybe we haven't considered. And the same thing can happen if people get divorced. Being tied up with someone, you know, when you don't have any space. And I think we've seen a spike in divorces, but we might also see a spike in, you know, baby boom too, who knows? All of these things are creating situations where we're going to have different supply and demand. So I just thought that was really interesting and something that's not as talked about. So it's actually most of the places where people have roommates are in these higher cost of living places. I read that in Los angeles, for example, 30% or more of the households have roommates that are non romantic. And so if all those people are looking for their own space, that is a ton of extra demand on the market. Just consider that, you know, this extra demand coming from, you know, these splits in households and looking for more space, it's gonna continue to change the values of certain areas as people leave and people wanna come in. That changes the values of a market. And that's why we have like over 400 markets in the US so that we'll do in a future episode here soon, just exactly where everyone is going and where they are leaving from. So hopefully you're doing okay in the quarantine. If you're listening to this to real time and you've got a little bit of space and you're not thinking about, you know, ditching your roommate or getting divorced or anything like that. Hopefully that's not the case. But for thousands and thousands of people, that is the case. So just part of life until next time. Hopefully that gives you something to ponder and have a wonderful day.
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