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We’ve written quite a bit about the seizing up of credit lines, what happens to your mortgage and credit card debt, and how Airbnb may face an existential crisis moving forward. This is another chapter in that book and focusing on Airbnb and real estate in America. Marketwatch sat down and interviewed the CEO of Redfin, Glenn Kelman, and towards the end of their discussion the conversation pivoted to Airbnb’s impact to the secondary housing market and the possible deurbanization of America. I found it particularly interesting, and since many readers are fans of Airbnb I thought lend my thoughts.
Airbnb causing secondary housing/vacation real estate markets to collapse
We touched on these same issues in our article about Airbnb Superhosts, who are highly leveraged, facing an immediate cash crunch. Kelman speaks to this effect, and what it’s going to do to those housing markets. It ain’t good. Compound what Kelman is saying below with the new stringent lending requirements we spoke out in our bubble article, and I think there is some housing trouble a brewing.
MW: What’s your take on the state of secondary markets and vacation markets right now?
Deurbanization…is it legit?
I currently live in LA where the cost of living is egregious. Why? Because my main career goal is in the entertainment industry ( acting ) and the vast majority of big projects are cast in the city. Over the last few years the advent of putting yourself on tape for an audition has made my travel business a real possibility – there are few trips where I’m not putting myself on tape for a project in hotel room or quiet business center meeting room.
What I’m currently hearing, and it correlates to what Kelman iterates below, is that many of the face to face auditions will be avoided in the foreseeable future. I’ve grown to love self taping because I can choose the exact take that I want to submit vs going into a room to audition, hearing the person before me, endure a crowded waiting room of egos and nerves, etc. If I don’t have to be in LA full time to advance that career path…I’m not sure I will. My fiancee is already under contract for a gig in London and we could easily move our homebase to be nearer my family in Indiana, pay a mortgage that’s less than half our rent, save on income tax, and go to LA for several weeks at a time throughout the year for meetings. It would actually free up a lot of capital to build my travel business alongside my acting career, but create a higher standard of living for us. Kelman speaks of the same situation but in terms of Goldman, Amazon etc.
MW: Some have suggested that the coronavirus pandemic could lead to a migration out of major cities, especially ones like New York that were hit hard by the outbreak. What’s your take on this?
Kelman: It’s on like Donkey Kong. There’s going to be a major move. That was already underway just because of the affordability crisis. People are leaving New York for Philadelphia and are leaving San Francisco for Sacramento and even Phoenix. Seattle was starting to lose people to Tacoma, which is just down the street.
I think some of it is about consumer wariness where we’re living in close quarters with other people. But most of it’s about employer flexibility. Employers that were really stuck on whether to let people work from home have gotten completely unstuck. And if you can work for Goldman Sachs GS, -0.48% , but not in New York, if you can work for Amazon AMZN, +1.61% , but not in Seattle, well, why would you pay the premium?
Overall
Personally I think we are forging ahead into one of the most precarious economic times this country has ever seen. Travel has become something that was nearly a weekly event for me, and I’ve had the privilege of flying over 100k miles a year since 2015. I see the industry changing a lot, and it’s why I’m starting to pivot content a bit. I truly love this blog, writing, and interacting with you ( well most of you 😉 ).
This blog focuses on points and miles, but my degree is in business with a finance emphasis, and I’ve always looked at the “hobby” as a way to de facto currency trade. I’m going to be publishing more articles that have financial emphasis, favoring stories that relate to travel, but come at it from a perspective of someone who loves travel and can speak about the market. I hope you enjoy some of these posts as it’s a way for me to create commentary while travel is stunted, hopefully share some insight, and entertain with more diverse content.
Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
Chase Sapphire Preferred® Card
Welcome Offer
Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
Annual Fee
$95
Points Earned
Transferrable Chase Ultimate Rewards
- 5x on all travel purchased through Chase Travel℠
- 3x on dining, including eligible delivery services for takeout & dining out
- 3x on select streaming services
- 3x on online grocery purchases
- (excluding Target, Walmart and wholesale clubs)
- $50 Annual Chase Travel Hotel Credit via Chase Travel℠
- The begins immediately for new cardmembers and after your account anniversary for existing cardmembers
- 2x on all other travel
- 10% Anniversary Bonus
- Every year you keep the card, your total spend will yield a 10% points bonus. If you spend $10k in a year, you’ll get 1k bonus points
- Chase Sapphire Preferred continues to redeem at 1.25c in the Chase Travel℠ and the slew of other benefits remain in tact including Auto Rental Collision Damage Waiver ( primary ), purchase protections, etc.
- Points are transferrable to 14 Ultimate Rewards partners
- Redeem in Chase Travel℠ for 1.25 cents per point
- No foreign transaction fees
- Suite of Travel and Purchase Coverage
- Auto Rental Collision Damage Waiver is my favorite
- Get complimentary access to DashPass which unlocks $0 delivery fees and lower service fees for a minimum of one year when you activate by December 31, 2027.
- $95 Annual Fee
We keep an up to date spreadsheet that lists the best ever offers: You can find that spreadsheet here.
Historically 80k is a very, very good offer and hit in both 2022 and 2023. In 2021, we saw the offer hit an all time high of 100k. Who knows if that will ever come back.
Main Cast:
Cards that earn flexible points and should be used on the bulk of your purchases.
Supporting Cast:
Cards that earn fixed points in the currency of the airline/hotel and can not be transferred at attractive rates. These cards yield benefits that make it worth keeping, but not necessarily worth putting a lot of your everyday spend on.
The Chase Sapphire Preferred® is exceptional starter card and offers transferrable Ultimate Rewards, and pairs well with other Chase cards.
If you carry this card alongside Chase’s cashback cards like the Chase Freedom Flex® and Chase Freedom Unlimited® or the business versions: Ink Business Cash® , Ink Business Unlimited® you can combine the points into Preferred account and transfer into hotel and airline partners
Annual fee is quite low at $95 a year + you get a 10% anniversary bonus on points + $50 hotel credit in Chase travel.
The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.