Quote from @Logan McKay Zylstra:
@Rhet Porter
What you mentioned about only 14% of buyers being local is a big red flag for me.
That statistic is an indicator that local industry wages can't hold up to home valuations which is a recipe for disaster in my eyes. Yes, injecting a lot of out-of-state/foreign capital is great and certainly will help boost the economy. With that being said, what happens when homes become unaffordable for everyone else in the area? Labor leaves and there is no economic development in the area. This is exactly what is happening in Idaho.
In my opinion, I wouldn't go so far as to say St George is a "bubble," but I do think it gets hit a bit harder in a downturn. To be clear, I am not saying there are no deals to be had or money to be made from STRs, but St. George doesn't lend to my personal investment strategy at this point in the market cycle.
With all that’s been said, let me throw my comments/questions in the mix. The original post mentioned purchasing a short term rental. Doesn’t that mean if the price of the home works for the short term rental projections then it’s a good deal. I guess I don’t see how the local income level will impact non-local short term renters coming to StG for vacations. The vacation market has always been strong for StG. Almost year-round, visitors come for sports tourneys, outdoor activities, Tuacahn, etc. That's not something that the local StG market will impact, is it?
Further, the outside buyers are moving here, not necessarily owning from a distance. So don’t they (and their jobs) then become part of the market. So that 14% only represents those that are already part of the market when they buy. How many of the other 86% become part of the market once they buy.
