Let's check in on the RE and vacation rental market in Galveston

Homeowners rush to sell properties on picturesque island as their vacation rental dreams turn to nightmare

quote:

---

Homeowners who dreamed of making extra cash by renting out a vacation property in a stunning coastal city are now flocking to sell.

Buyers were initially drawn to Galveston during the COVID pandemic, taking advantage of work from home orders to buy themselves a house near the beach that they could escape to, according to the Galveston Daily News.

For some, buying on the barrier island came with the perk of being able to convert the properties into short-term rentals in a get-rich-quick scheme flaunted on social media.

'People were saying, "Oh yeah, buy a vacation home rental in Galveston and you will be making $5,000 a week; that's $20,000 a month and you only have... $1,000 in expenses,' Claire Reiswerg, co-owner of Sand 'N Sea Properties recounted.

'We’re sitting there reading that stuff and saying "they’re out of their minds,"' said Reiswerg, whose company manages vacation rentals.

During that time, the number of registered short-term rentals in Galveston more than doubled, with 2,300 listed in 2021 to 4,900 two years later.

But in the years since, many of those who purchased homes to convert into vacation rentals have come to realize that it is actually a competitive and labor-intensive field.

---

Oh no...chasing that easy money didn't work out, so now we are about to lose our asses in an oversaturated resale market!!!!

quote:

---

'A lot of these people that are just on Airbnb or on VRBO, they’ve got these properties they’ve bought up and they’ve listed themselves and they’re having to keep up with the maintenance of the home, the yard, the cleaning, the linen and they find that it’s not free money,' said Stacey Weber-Rubio, a local real estate agent.

'It's hard work. It's a real job,' she added.

This year alone, the Galveston real estate market climbed by 26.7 percent in homes for sale in February 2025 compared to January 2025, according to Rocket.

For some, the reality of running a short-term rental may have become too much, as one mother described on Facebook the horrors her daughter and her friends faced when they tried to rent an Airbnb in the area for Spring Break.

Courtney Elizabeth wrote on the Completely Galveston Facebook group that the trio -all of whom are teachers - booked a three-night stay at an 'adorable' house.

The reviews for the property were great, except for one outlier that the owner rebutted, Chron reports.

But when the woman's daughter and her friends arrived, they found bugs, pet hair and mold on the bedsheets; crumbs on the kitchen counter, stained headboards and carpets and other - presumably human - hairs in the bathroom.

The trash had not been taken out, and towels were still stained with the previous guests' makeup.

When the group then tried to contact Airbnb, they had trouble getting the company to 'take them seriously' as the host told them the pictures from the cottage 'don't look like my home.

After having trouble finding an alternative, the teachers were forced to book a room at the San Luis, but only for one night - and were forced to return home the next day.

Now, many of the former vacation homes that were listed on Airbnb and VRBO are being sold - with the island currently experiencing an 18-month supply of houses, according to the Galveston Daily News.

Supply of houses references the number of months it would take to sell every currently listed home. Four to five months represents a balanced market.

---

18 month supply in an ever-slowing RE market...Yikes!!!

Who couldn’t have seen an oversaturation of people chasing “easy money” in the STR space, leading to gluts of inventory because those people can’t even pay the second mortgage they took out, with no one renting the home, which will eventually lead to a foreclosure crisis in areas like Galveston? It’s been a slow burn up to this point, but now that the match is lit, you will see foreclosures in these areas rolling in. Many, if not all, of these were bought on ARMs in 2020 and 2021, where the rate is locked in for the first five years, so not only can they not afford the current mortgage, but their monthly payments will also be increasing. Galveston, Palm Springs, and other vacation spots are all currently experiencing, or will experience, the same outcome, where Airbnbs were snatched up and oversaturated the demand.