STRs are not doing well in Phoenix - people got greedy..

[Bruce Woodruff]

I am in a FB group about AZ STRs, and the talk all week has been "the Superbowl, the biggest Golf tournament, and Spring Training are all coming to Phoenix this week, why isn't my STR (that I just started) not booked?"

Then they show their listing and they want $2000 - $3000 or more a night or something ridiculous. I think half of all STRs are vacant when they could all be booked if people had been reasonable with their rates....but many of these people thought they could just move out for a week or two, list their house, and rake in the big bucks. They don't realize that rich people aren't stupid.

Motel 6 rooms are going for $1000 a night they say.....

https://www.nytimes.com/2023/0...

[Jeremy Holden]

Im a phoenix agent and investor whos been asked this as well.

People that are pricing their current str's or underwriting new str's based on 2020-2022 performance are leading themselves blind. All the data and experts show that 2023 will be more like 2019 with occupancy's in the range of 50% - 60% assuming you are priced reasonably! Its a tough pill to swallow but the market is saturated and there's plenty of professionally designed places. 

My business partner and I purchase a home in a saturated part of mesa in November. Most people on the forums thought we were nuts. Because of our conservative underwriting and pricing data modeling, we're forecasting a 20% CoC this year. For hosts who are struggling, my advice is to dive into the airdna metrics - all the answers to the equation are there.