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good morning depending on when you're watching this um so we have this situation where people are uh concerned and I think rightly about the viability of shortterm rentals going forward uh in the economy uh in the sense that if uh vacancies are up uh the highly levered asset that is the short-term rental might be um on The Chopping Block which might cause home prices to go down I don't know but let's get into it here is a fascinating article that came up from Zero Hedge we'll go over some other things as well but uh just in looking at this something pop Google searches for SEL my Airbnb surge is travel downturn worsens now I know it seems silly to rely on a search engine to uh to somehow prognosticate or forecast uh or explain current issues within the marketplace I know that that seems weird but man there there's their data is fantastic and I I when when that kind of stuff happens I think I think it should at least cause you to raise an eyebrow and so here's what we've got it says Airbnb owners who snapped up homes in the last several years dur in the area of free money are facing a downturn in the short-term rental market that started in the second half of 2022 with some Airbnb operators in cities facing 50% Revenue declines according to a recent note published by reventure Consulting CEO Nick Gurley I guess that's what his name is I should I should probably look up how to pronounce his name but I just haven't gotten around to it he said he's quoted saying I believe these losses will cause a wave of distressed selling from Airbnb operators in 2023 in 2024 now let's just go over like running a business okay you don't want to sell your asset let's say you have an incom producing asset and all of a sudden it's not producing income you don't want to sell right you want to believe that it will last you'll Outlast this problem uh and that you won't have to sell and and it's just a temporary thing but you know month after month of not having any money uh coming in and then having maybe some some tenants some short-term uh renters uh you know maybe kind of screw up the place or give you a bad review and you're not making any money and it keeps going on and all of a sudden maybe uh the job uh the job market is is getting kind of dicey because the FED has decided that they need to um they need to work on employment they need to soften employment soften employment which means they need to get people fired uh with their policies that that's not that's not voting well for you keeping your asset and so um this is a a theory that's gone forth um I I feel like there's some weight to it it does make some sense airbnb's CEO recently warmed of a booking slowdown while Airlines and retailers have warned of consumer spending downturn JP Morgan Goldman Bank of America Barkleys and cities have added more Gloom as consumer credit card spending crashed in September so you know the idea is is that people don't have any more money um discretionary cash to be able to go and stay at these airbnbs they're traveling less that's that's the theory clearly the FED pinning interest rates at two decade HIDs is leading to Major economic cracks as recessionary slow down and travel demand emerges in crimps revenue for highly leveraged Airbnb operators which depend on revenue streams to pay for their mortgage payment and that's right and look this is the spot that I think is blind um for many of the housing um aristocracy in the United States those learned professionals that are looking over these types of things are not paying attention to the fact that they said that subprime mortgages were dead okay and that's fine and they say that that's that the reason that we're not going to have any sort of softness in the market is because you know you can't have a sub it was the subprime borrowers that were the problem last time and now those people don't exist and so we're not going to have issues but there's the short-term rental mortgages which are highly leveraged and they're all based on past income or showing income on a property and if you don't have any income on that property and you got a mortgage on it how are you going to pay it

back says Gurley says the revenue collapse is the most notable in the southwest and Mountain West areas of the country where Airbnb Revenue per listing is down 40 to 50% year-over-year with owners in cities such as Austin Phoenix Denver and San Antonio taking the hardest hit one ex user posted the great Airbnb exit has begun so they've used X in the article versus Twitter which is fine Twitter's dead apparently um but look there's certain places that were really really hot that people always wanted to be in like Austin yes right everyone wants to be in Austin right now it's growing and uh certainly Phoenix has always been a bell weather for the economy and and as far as housing like uh you'll know like what's going on nationally when you see what happens in Phoenix that was the sight of all the I buyer Ridiculousness between um red fin and Zillow and all those people were involved in that mess Denver you know you've got such such wonderful tourist destination there the mountains um I'm surprised that we're not seeing more uh softness in places like Florida um anywhere there's a beach you know living in St Louis we we have no beaches have to go a very long way before we can get to the beach so um I've used an Airbnb down in uh I don't know where it was anymore is in Alabama or Mississippi or something but I mean anyway uh there's some some tweets and and things in there uh and then um then there's anecdotal evidence it says if the economy softens the people own who own airbnbs may be forced to sell and then another tweet that says hearing from Ala reports I know that airbnbs are slowing down are we going to see a big s in the short term rent or short-term rents in the near future and then they say I personally prefer a hotel at this point unless it's a big family trip I agree and then it says and what's up with the Google search sell my Airbnb Point unless it's a big family trip look that's I mean that's the way it's gone interest over time I mean just ramping up uh anecdotal things like see here's your here's an article from Newsweek if you don't like Zero Hedge I mean here's fall and Airbnb listings Revenue Sparks housing market crash fece it's not a new article it came out in June of this year and then that in combined with this a prominent investor reduces stake in Airbnb as CNO and CTO sell shares what's behind The Insider sh sell off so do they know something that we don't know I have no idea I just thought it was kind of interesting that um everyone is kind of we're all kind of watching this space or at least I'm kind of watching this space because you know it it there is there is a hypothesis there that it it'd be interesting to see if it if it turns out I'm not I'm by the way I I I do not like economic pain I I I can't the idea of not the idea of being gleeful over someone else's uh loss of property or loss of financial well-being is not is just not who I am um so but I am I'm looking at it in in this in the sense or in the the context of the greater housing market um do you know people still people still call me and people they say you know hey I want to buy a rental you know I want to buy a rental I'm going to do Airbnb and you know I'm going to make all this money and um you know you don't want to tell people that they're they're not that they can't it's just it's just I don't think people realize how developed the markets become um and I don't think people have realize like how um how much goes into it it's certainly not passive okay and so uh and then you know I think that their assumptions on occupancy tend to be misguided or optimistic let's go with optimistic but with that I think I'm going to head on out I just I just wanted to bring that to you know if you are interested in Airbnb maybe maybe pause maybe do some research and say like you know hey does this really really make sense I'm saying right now in October of 2023 does it really make sense we've had all this dramatic run up in prices of home home prices uh does it really make sense for me at this moment okay when I could be what I could get 5 and a half% risk-free treasuries right now with you literally just buy them uh is it really this really where I need to be um and if that if your answer is still yes then you should give me a call um and if not that's that's okay too goodbye I'll see you probably tomorrow