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Business PlansMay Market Review and Future Trends with Scott Sage
In the latest episode of the STR Data Lab, Jamie Lane and co-host Scott Sage break down May's U.S. market performance. They highlight a 7% increase in available listings—the lowest growth seen in three years—and an 11% rise in demand, which has led to a 3% increase in occupancy rates. Despite these gains, occupancy rates still trail behind 2019 levels, albeit with signs of a rebounding market.
Jamie points out that the average daily rate (ADR) growth is up 1.5%, with a noticeable shift towards larger rental units. Revenue per available room (RevPAR) has also seen a promising increase of 4.5%, signaling a positive shift after two consecutive years of declines. However, urban centers like New York and San Francisco are experiencing a drop in listings due to regulatory challenges, in contrast to the growth seen in suburban, mountain, and coastal regions.
The duo discusses the slowdown in supply growth, attributing it to cautious new investment and market conditions. They highlight robust performance in smaller and mid-sized cities like Bloomington, Buffalo, and Albany. The conversation also covers the impact of international travel dynamics, the strength of the dollar, and the critical role of marketing the U.S. as a welcoming destination.
Looking ahead, Jamie and Scott forecast stable demand growth at around 6-7%, driven by overall travel spend and short-term rental adoption. They emphasize the resilience of the upscale and luxury segments, which are outperforming due to limited supply and growing demand. Jamie predicts a slight increase in RevPAR for 2024 and more substantial growth in 2025, contingent on stable supply growth and favorable economic conditions.
The episode concludes with a discussion on potential wild cards, such as interest rate changes and their impact on investment in the short-term rental market. The hosts express cautious optimism for the sector, advising operators to focus on differentiated, high-quality offerings to maintain a competitive advantage.
You don’t want to miss this episode!
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Connect with Jamie on LinkedIn and Twitter:
LinkedIn: https://www.linkedin.com/in/jamiehlane/
Twitter: https://twitter.com/Jamie_Lane
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Connect with Scott on LinkedIn:
LinkedIn: https://www.linkedin.com/in/sagescott
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LinkedIn: https://www.linkedin.com/company/airdna/
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Instagram: https://instagram.com/airdna.co
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Up Next:
Mastering Real Estate Deals: Insights from Henry Washington
In this episode of the STR Data Lab, host Jamie Lane welcomes Henry Washington, a real estate investor who transitioned from a crisis into a thriving investment career. Henry's real estate journey began in 2017 when a simple Google search opened his eyes to real estate investment opportunities.
Starting with just $1,000 in savings and poor credit, Henry made his first real estate acquisition for $116,000, creatively financing it by borrowing against his wife’s 401(k) and securing a conventional loan from a local bank. This marked his full commitment to real estate, leading him to leave his position in data analytics at Walmart.
In April 2020, Henry transitioned to full-time real estate investment, driven by an opportunity with an apartment syndication fund. He discusses the significant role data plays in his strategy, using metrics such as property age, foreclosure status, and absentee ownership to pinpoint motivated sellers. Despite challenges like high interest rates, Henry finds opportunities with these sellers, using the list price to sell price ratio to assess market health and formulate offers. He notes that while some banks have reduced their commercial loan offerings, local community banks remain viable options for financing, emphasizing the importance of understanding bank preferences to secure financing more effectively.
Throughout the podcast, Henry and Jamie discuss how embracing the identity of a real estate investor and expanding his network were crucial. Influential readings like "Rich Dad, Poor Dad" and guidance from mentors were pivotal in shaping his investment approach. Now focusing on short-term rentals, Henry leverages his insights to develop a portfolio that meets evolving consumer demands.
Henry also introduces listeners to his book, "Real Estate Dealmaker," aimed at empowering readers with practical advice on finding and financing real estate deals. This episode offers invaluable insights for anyone interested in navigating the complexities of real estate investment with confidence and creativity. You don’t want to miss it!
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Connect with Henry:
https://www.instagram.com/thehenrywashington/?hl=en
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Connect with Jamie on LinkedIn and Twitter:
LinkedIn: https://www.linkedin.com/in/jamiehlane/
Twitter: https://twitter.com/Jamie_Lane
~~~~
Connect with Scott on LinkedIn:
LinkedIn: https://www.linkedin.com/in/sagescott
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Connect with AirDNA on LinkedIn, Twitter, TikTok, and Instagram:
LinkedIn: https://www.linkedin.com/company/airdna/
Twitter: https://twitter.com/airdna
TikTok: https://www.tiktok.com/@airdna.co
Instagram: https://instagram.com/airdna.co
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Find AirDNA at these upcoming events!