STR Data Lab™ by AirDNA
Economic Outlook for Short-Term Rentals - A 2025 Forecast
Dec 5, 2024
Bram Gallagher, Director of Economics and Forecasting at AirDNA, shares insights on the short-term rental market's future. He discusses the bounce-back of the economy, crediting the Federal Reserve's timely actions to stabilize growth. Predictions for 2025 include a modest 4.7% supply growth, with occupancy rates recovering and increasing average daily rates boosting revenue. Gallagher also addresses geopolitical risks and inflation concerns while emphasizing market-specific opportunities in areas like Maui and urban centers.
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Quick takeaways
- The podcast highlights a significant economic recovery in 2024, marked by improved GDP growth and decreased inflation rates, attributed to the Federal Reserve's rapid interest rate adjustments.
- Despite rising interest rates, the short-term rental market is expected to moderate in supply growth, benefiting existing operators through improved occupancy rates and increased revenue per available room.
Deep dives
Balanced Economic Outlook for 2024
The current economic climate shows signs of recovery as supply and demand have recently found equilibrium, which was anticipated in previous forecasts. 2023 experienced sluggish GDP growth and high inflation, but 2024 has already seen improvements, with GDP surpassing expectations and inflation levels decreasing significantly. The rapid adjustments made by the Federal Reserve, particularly the swift interest rate hikes, have played a crucial role in stabilizing the economy. This favorable trend indicates a potential soft landing for the economy, an achievement that has historically been elusive.
