Pricing in declining housing market

[Alice Smith]

Hi all,

Currently looking to buy a single family home for short term rental. Given the declining housing market, how have people been adjusting their bid offer? Are people trying to bid lower than the asking price? Obviously this depends on the situation. But what is considered to be a "fair price"? Looking at zillow and taking the average of the current estimate and the estimate 2 years ago before the pandemic? 

Thanks.

[Evan Polaski]

@Alice Smith, I think this very much depends on the submarket.  In Cincinnati, where I live, the "softening" I am seeing is in the lower income areas. The in demand neighborhoods are still selling above ask within a couple days.  I.e. my in laws offered $30k over ask on a house in my neighborhood, cash, but wanted an inspection contingency about 3 weeks ago.  They didn't get it.  A builder friend of mine put a new construction property up in a transitioning neighborhood that would have sold at his ask in a day or two at the end of last year.  It has been listed a couple weeks and not pending.  

I know this gives you no real help, so I would say talk to an agent.  But generally, good short term rentals are in high demand areas, and I am not seeing these areas declining.  And if you are looking at a lower end area, I would strongly consider whether a short term rental is the right move.  They are not a guarantee that everyone makes them out to be.  I have several friends that have recently bought short term rentals in affordable neighborhoods, and they are not doing terribly well.  They are not losing money, but they are not making the numbers many people like to tout.