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The Next Housing Crash? Can Short-Term Rentals Affect Saucon’s Housing Market?

Could a short-term rental home sell-off create downward pressure for homes in Saucon Valley’s housing market? Local realtor Johnathan Cummings shares his thoughts in this edition of Property Pulse.

Est. Read Time: 6 mins

Saucon Valley Property Pulse is a regular column on featuring expert insight and analysis of the local real estate market by realtor and Lower Saucon Township resident John Cummings. Whether you’re looking to buy, sell or are simply interested in local housing trends, we hope that you’ll find the information in it helpful.

In the past four years, real estate investing has become a very popular trend due to the extreme appreciation that has occurred, especially in Saucon Valley. As an example, let’s look at the below appreciation rates and determine what your investment would have looked like if you purchased in 2019 and sold this year:

Purchase Price: $238,000, Initial Down Payment (20%): $47,600
Sale Price: $500,000
All-in costs*: $114,700.

Approximate profit: $500,000 minus $180,000 (remaining mortgage) minus $115k = $205,000, which divided by $114,700 = 178% profit

* All-in cost refers to all monthly payments made until the property is sold. This figure includes mortgage payments, taxes and insurance.

I think most of us would agree that this investment makes a lot of sense and this is just for a typical homeowner/occupant. Now, let’s take it a step further and see what an actual rental investment would have looked like based on the same sales prices and timeframe:

Purchase Price: $238,000, Initial Down Payment (20%): $47,600
Sale Price: $500,000
All-in costs*: $0 (covered by renter)
Rental Profit (varies, but we’ll be conservative): $200/month x 48 months = $9,600

Approximate profit: $500,000 plus $9,600 (rental profit) minus $180,000 (remaining mortgage) minus $47,600 (downpayment) = $282,000, which divided by $114,700 = 246% profit

*All monthly payments covered by renter. The only remaining cost is the downpayment.

This is the power of real estate investing when done properly. These examples are very real and are based on the market over the last four years. However, with the good comes the bad. With prices extremely high as well as higher interest rates, real estate investing has become more difficult. Let’s take a look at an example of how things have changed:

Real Estate Investing Done Wrong

Would it make sense to do this in 2023? Absolutely not, because $500 coming out of one’s pocket every month would make it very difficult if not impossible to hold on to a property long-term. So what has the solution been for investors? Short-term rentals.

This option allows individuals to make purchases at higher prices, because the monthly revenue covers their mortgage (there are other expenses with Airbnb, but people are making this work).

This isn’t only happening in Saucon, but across the United States, where there has been a major uptick in individuals buying properties to use them as short-term rentals. However, this only works if there are consumers for these rentals. If vacationing starts to dip due to economic hardships, it can make it very difficult for investors to hold on to these properties, forcing them to either sell quickly or be foreclosed on. This would essentially bring much-needed permanent inventory back on the market and could potentially reduce home values. This has become major news recently, with some experts claiming that the Airbnb bubble could spark the next housing crash. But what I would like to do is examine how, if this were to happen, it could affect us in Saucon.

The Saucon Sell-off

To do this, let’s take a look at what would happen if every single-family home that is a short-term rental in Saucon came back onto the market.

We currently have 76 homes for sale.

We currently have 23 single family homes that are short-term rentals. If we put every single one of those back on the market could it affect the price? Absolutely, because every home that comes onto the market carries more weight, as homes prices are set by recent sales. There is, however, a caveat. If we add those 23 homes, we would then sit at 99 total listings… For one month.


When put into perspective, it’s easy to see that this would be a drop in the bucket and would likely cause prices to shoot up further, because there would be so much demand for the homes and they would continue to sell at higher and higher prices.

Is this scenario true for every U.S. market? No. Could the short-term rental home sell-off create downward pressure for homes in some markets? Absolutely. But here in Saucon, we still have a long way to go before these prices drop, even with a “mass” exodus of short-term rentals selling off.

If you’re interested in potentially buying an investment property to Airbnb in Saucon, it may not be the wisest choice. As we’ve seen, occupancies are not that great, and we’re really not in a “vacation” market. It could be a nice bump on rents if you can make it work, but otherwise long-term rentals are typically easier to manage.

So there you have it. Is there an Airbnb housing crash coming? Maybe, but if it is, it is very unlikely that it will affect our local market.

About the Author

Hey there, I’m John Cummings, and I’m thrilled to be your local Saucon Valley real estate expert! As a proud resident, I feel incredibly fortunate to have discovered this charming community alongside my wonderful wife and three boys.

My mission is simple – to share the joy and excitement of living in Saucon Valley with you and your family. Whether you are looking to buy or sell a home, I am dedicated to making your real estate journey a seamless and rewarding experience.

With a deep understanding of the local market and a passion for helping families like yours, I’ll go above and beyond to find the perfect home that matches your needs and desires. I believe that finding the right home is not just about the property; it’s about finding the perfect place to create cherished memories and build a fulfilling life.

When I’m not busy making real estate dreams come true, you can find me exploring the beauty of Saucon Valley with my family, attending community events, and giving back to the place we proudly call home.


Office: (610) 882-3135
Cell: (484) 280-8433
Email: Jo*************@gm***.com

Disclaimer: The information provided in this real estate newsletter article is for general informational purposes only. It is not intended to be and should not be considered as professional advice or a substitute for seeking professional advice. The content presented in this article is based on the knowledge and information available up to the publication date. Real estate market conditions, regulations and practices can vary over time and differ based on location. Therefore, it is essential to consult with qualified real estate professionals and experts for specific advice tailored to your individual circumstances and location. While we strive to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability concerning the content. Any reliance you place on the information in this article is strictly at your own risk. The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any real estate agency, organization or publication. In no event will we be liable for any loss or damage, including without limitation, indirect or consequential loss or damage, arising out of or in connection with the use of this article. By reading this article, you acknowledge and agree to these terms and conditions. If you do not agree with this disclaimer, we recommend refraining from using or relying on the information presented herein.


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John Cummings

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