Airbnb Stock IPO and Nashville

Nashville airbnb stock ipoIn the weeks leading up to the Airbnb stock IPO, bookings in Nashville were recovering from a disappointing Spring and Summer season due to the Covid-19 pandemic. And yet, Nashville Airbnb owners were excited about the initial public stock offering and were debating about how much to participate. An optimistic discussion followed, speculating on where the stock price would settle after the first full day of Nasdaq trading. Most guessed that the stock price would settle in the $80-$90 range with a few pushing triple digit predictions. What happened next was nothing short of unbelievable.

Airbnb shares opened on the Nasdaq Thursday at $146 apiece, more than double its $68 IPO price and valuing the company at more than $100 billion. The stock closed at nearly $145, which means Airbnb is now worth more than Marriott, Hilton and Hyatt combined. Let that settle in.

Why Nashville was Bullish on Airbnb Stock IPO

2020 hasn’t been the best year in history to own and operate a Nashville Airbnb, but it was by no means the worst city for short term rental owners. According to AllTheRooms Analytics, Nashville bookings have been down 27% year to date, but have been steadily recovering since April. Also recovering since April are nightly room rates. Rates dipped to a historical low $126.71 per night in April, but quickly recovered to pre-pandemic numbers by July when nightly rates average $201.22. By October nightly Airbnb rates climbed to $217.48, a rate higher than the same period in 2019. All of this added up to the optimism that Airbnb’s stock IPO would not only be successful, but very successful. Nashville had seen the turnaround and had become a believer.

What this Means for the Future

Validation. Over the last 24 hours it has become clear that Wall Street shares Nashville’s belief that the entire travel and hospitality sector is in the midst of a fundamental shift in how people travel. Not just the bridesmaids and bro trips, but for family vacations and for business travelers. As we analyze Nashville short term rental histories, we have seen an 11% rise in business and convention related bookings over the last 24 months. This includes the Covid-19 period of March-present. Nashville has been on the leading edge of that shift and will continue to do so as companies seek to provide experiential and immersive travel for their conferences.

At the time of publishing, there are 5,247 short term rental permits active in Nashville. This is down from 5,955 permits just 10 months ago as many causal hosts shifted focus to long term rentals or simply sold their properties. Why sell your property? The Nashville real estate market has been white hot blasting up 12% year over year. Primary residence buyers have driven this market just as they have in other markets. But, do you know which property segment has seen the least amount of growth? New construction short term rentals. March through September were virtually flat until a modest 1.4% gain in October followed by a 2.7% gain in November. If you have been waiting for the bottom of the market to buy an investment property, it appears you missed it as September was the last month of flat price growth. However, there is still time to grab a deal before they are gone. Remember, Nashville Airbnb prices follow bookings. Not just the number of bookings, but the gross dollar amount so be sure to follow the nightly rental rate metrics. This leads industry professionals to predict a rather significant value increase for Airbnb properties in the not too distant future.

Where to Buy a Nashville Airbnb

downtown nashville investment propertiesIt’s no secret that the closer to Broadway, the better. If you cannot be walkable to Broadway, then you need to be within a $10 Uber radius and if you can get a skyline roof top view, your bank account will thank you. At the moment, only Muse Nashville is selling units that are walkable to Broadway and we don’t see another significant development on the horizon until 2023 that would offer similar walkability. Muse only has a handful of units remaining to sell with an October 2021 completion date.

Your Nashville Backup Plan

When downtown isn’t an option, you need to buy within a $10 Uber radius of Broadway and you need to buy a purpose-built, well zoned property to avoid any issues with neighbors and permitting. Never compromise on the quality of the property and only buy a property that you would book in another city. Don’t get pioneering and never buy in an area that “might be up and coming if X, Y or Z happens”. There are several developers in town who have taken this advice to heart and have designed and built amazing income properties. Lyric at Cleveland Park, Brio West End, Catalyst Vanderbilt are just a few that come to the top of mind.

Be sure to see all of our Nashville Airbnb short rental properties and new construction developments. We update this list weekly to help you find non-owner occupied eligible Airbnb investment properties in Nashville.

Grant Hammond

Broker, ABR, SFR ePRO

(615) 945-7123

Contact Grant Hammond
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