St. Augustine’s short-term rental frenzy is fading fast.
With vacancies soaring and expenses piling, hundreds of Old City Airbnb owners are putting their properties up for sale, real estate sources told The Citizen.
One Airbnb operator familiar with the sector said that at least a third of the more than 600 properties currently on the market in St. Augustine’s core areas are owned by Airbnb owners looking to cut their mounting losses.
“The smart ones already got out,” the source said. “Now everyone else is trying to, but the homes are just sitting. I think you are going to see a lot of fire sales here soon. People are losing money.”
It’s a dizzying reversal of fortune from recent years, when St. Augustine Airbnbs were perceived as inexhaustible money machines.
“People were paying exorbitant prices for these homes during the boom,” the source said. “Everyone thought they were going to get rich. Bidding wars got out of control.”
Many of those buyers — especially those who entered the fray in 2022 or 2023 — are seeing their purchases go south.
The marked slowdown in bookings stems from a variety of factors, according to industry experts.
General economic worries — fueled by inflation and layoffs’ fears — have lessened travel across the board, not only in St. Augustine.
The pain of higher Airbnb vacancies, sources said, has been compounded by skyrocketing insurance and cleaning service costs.
In addition, some travelers began to chafe at the rising cost of an Airbnb booking — and onerous lists of house rules.
The pendulum, local real estate observers said, has swung back in the favor of hotels.
“People are starting to realize that they aren’t making the numbers they thought they were,” the source said. “They were sold a bill of goods.”
One buyer who paid $1.45 million for an Airbnb property at the market’s apex hasn’t had a night booked for more than a month.
Another downtown Airbnb owner with a home on the market ruefully told The Citizen that they are now having to reconsider their retirement date.
“At this point, I’ll be relieved if we lose less than six figures on this house when you add it all up,” she said. “We took a chance, and it didn’t turn out as expected.”
Some of the Airbnb properties have already seen major price reductions as sellers try to coax buyers in a high-interest rate environment.
“Is it a struggle for a lot of sellers right now?” a St. Augustine real estate agent said. “Yes. The buyer is in the driver’s seat. But I wouldn’t say it’s a panic. If rates stay high, things could get worse. But that’s not a given.”
Other property owners are ditching the Airbnb model and switching to conventional long-term rentals.
The contraction of St. Augustine’s Airbnb market will no doubt please many locals who bemoaned their sudden ubiquity in recent years.
The profusion of short-term rentals, they’ve argued, detracts from the city’s ambiance and has fractured once closely-knit blocks.
“It just became oversaturated,” the source said. “You could see this coming. When people were complaining about all the new Airbnbs, I wanted to tell them to just wait. Now it’s happening.”
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