The Rise of Home Sharing Platforms

How these companies are influencing the growth of the real estate market and projections on where the industry is headed

Within the past decade, home sharing platforms have hit the scene with immense popularity. Companies like Airbnb and HomeAway offer rooms, apartments or entire houses for rent around the globe, often at a fraction of the cost of a traditional room rental in a major city. And these types of platforms have become particularly attractive for those looking for more than a one or two-night stay.

As a result, it’s no surprise that the growth of home sharing is impacting the hospitality industry, but what about real estate?

Sezgin Sezer is a real estate broker for Keller Williams Realty in Miami, San Diego and Los Angeles, three highly populated tourist towns and common areas of the country where home sharing has become the norm. For him, the biggest way home sharing has influenced his sales are homeowners choosing to lease their space rather than sell.

“The state of the economy is questionable and I think people are fearful of a crash,” said Sezer. “While it’s a great time to buy and sell, people are holding onto their property because they think it’s going to be more valuable in the long run.”

According to Sezer, home sharing platforms are making it easier for homeowners to maintain rather than sell because they can rent out the space, often times making more revenue in a year than they would if they sold the property in the first place.

“Real estate in the markets I service is not cheap, but neither is the cost of a hotel rental for a four or five-night stay,” he said. “Some of the homeowners that we’ve talked to, particularly in Miami, will put their three or four-bedroom vacation homes up on Airbnb for the winter, renting it out for months on end while they go back to their place up North. These houses would have been dormant for the majority of the season but now, they’re making extra capital.”

Cities around the globe where tourist traffic is heavy are experiencing a similar impact. New York City, for example, is starting to instill bans, not only for safety reasons and numerous tenant complaints but also because these short-term rentals are becoming more profitable than long-term leases. The ban would regulate companies like Airbnb, and landlords trying to make an extra buck, from capitalizing on this growth.

While Airbnb combatted the bill stating that it’s a way for tenants to earn revenue when their high rent is otherwise bleeding them dry, the stats according to The New York Times show this may not be the case.

So how are realtors combatting this battle in the meantime? For starters, concentrating on what they can control according to Sezer.

“Real estate is a challenging industry to be in, whether it’s new brokers battling for clients in the same city or the state of the economy threatening to impact your career, but the demand will always be there. Home sharing platforms will never replace the need for consumers to buy and sell. My goal is to continue focusing on customer service to drive my success as a broker, no matter what the competition is doing.”