Do Zillow’s Top 10 Housing Markets Work For Airbnbs?

In This Article

Yearly, Zillow releases its record of the prime U.S. housing markets for 2025 based mostly on projected dwelling worth progress, job traits, and purchaser competitors. For conventional actual property traders, these cities may seem to be gold mines. However for short-term rental (STR) traders, the questions are solely completely different:

• Are STRs authorized and sustainable in these cities?
• Will demand maintain robust regardless of regulation dangers?
• Are you able to really generate optimistic money movement, or will dwelling costs eat your earnings?

A lot of Zillow’s picks aren’t trip rental sizzling spots—they’re rising, high-demand residential markets the place rules, taxes, and competitors can complicate STR investing. So, do any of them work for STRs?

How Zillow Selected These Markets

Zillow’s 2025 hottest markets had been ranked based mostly on:

• House worth progress: Projected appreciation for 2025
• Proprietor-occupied family progress: Extra everlasting residents shifting in
• Job progress vs. new building: Demand for housing outpacing new builds
• Pace of dwelling gross sales: Markets the place properties promote the quickest

These elements sign robust dwelling appreciation and purchaser demand, which is superb for home flippers or long-term landlords. 

Nevertheless, STRs’ success depends on solely various factors: occupancy charges, seasonality, authorized restrictions, and affordability. We use information from AirDNA and Zillow (information from March 13, 2025)  to develop our rating system and examine it to different markets.

I discuss with a “regulation overview,” which hyperlinks to every respective metropolis’s on-line regulation data and gives my overview of how strict its rules could also be in contrast to these of different markets.

• Gentle = STR-friendly: A easy allow is the very best regulation.
• Reasonable = Proceed with warning: You are able to do STRs, however it turns into tougher with cap limits, permits, and restrictions, and it might change at any second.
• Heavy = Sturdy opposition to STRs: Increased charges and extra necessities to be allowed to function.

With out any additional ado, right here’s a breakdown of Zillow’s prime 10 markets and their viability as STRs.

Buffalo, NY

Market efficiency metrics:

• AirDNA rating: 41/100 (Low)
• Annual income (AR): $29,500 (+11% YOY)
• Common day by day fee (ADR): $186.5
• Occupancy fee: 51%
• RevPAR: $99 (+10% YOY)
• Energetic listings: 1,273 (+5% YOY)
• Zillow median dwelling value: $224,133 (+5.5% YOY)
• Yield: 14.3%

Regulation overview: Reasonable

Professionals:

• Potential fallback plan: May work as a long-term rental if STR fails.
• Vacationer demand: Proximity to Niagara Falls gives some demand.
• Affordability: House costs are cheap, with a strong yield of 14.3%.

Cons:

• Seasonality: Possible impacted by colder months, lowering occupancy.
• Regulatory hurdles: Allow necessities and registration add friction for traders.
• Booming market: As considered one of Zillow’s prime markets, competitors is rising.

Last verdict: C+

Buffalo presents average STR potential because of its cheap dwelling costs and yield, however regulatory constraints and seasonality dangers maintain it again. It could work higher as a hybrid STR plus mid-term rental (MTR) technique catering to touring professionals, nurses, or school renters.

Indianapolis, IN

Market efficiency metrics:

• AirDNA market rating: 83/100 (Good)
• Annual income (AR): $28.7K (+12% YOY)
• Occupancy fee: 48% (+1% YOY)
• Common day by day fee (ADR): $200.57 (+11% YOY)
• RevPAR: $98.58 (+13% YOY)
• Energetic listings: 4,026 (+22% YOY)
• Zillow median dwelling value: $222,887 (+3.6% YOY)

Regulation overview: Excessive

Professionals:

• Excessive investability AirDNA rating (77): Sturdy market fundamentals for actual property funding. This metric compares the price of properties utilizing Zillow dwelling worth information to the common earnings of full-time short-term leases on Airbnb and Vrbo.
• Income progress (92): One of many highest-growing income markets. We calculate this by wanting on the change in year-over-year RevPAR for properties that obtained bookings in each durations.
• ADR enhance (+11% YOY): Every day charges are rising, suggesting extra substantial host pricing energy.

Cons:

• Oversaturation danger: Listings grew 22% YOY, that means competitors might outpace demand.
• Tourism drawbacks: No standout vacationer sights that drive year-round demand until you’re a race automobile fanatic.

Last verdict: C-

Indianapolis has robust funding fundamentals and income progress, however robust itemizing progress and weak tourism enchantment make STRs a high-risk play. The market might grow to be oversaturated, making occupancy and pricing unstable. This market is greatest suited to mid-term leases (MTRs) concentrating on touring professionals, sports activities occasions, and conventions.

Windfall, RI 

Market efficiency metrics:

• AirDNA market rating: 21/100 (Weak)
• Annual income (AR): $47.4K (+5% YOY)
• Occupancy fee: 59%
• Common day by day fee (ADR): $314.50 (-1% YOY)
• RevPAR: $189.69 (+3% YOY)
• Energetic listings: 2,016 (+4% YOY)
• Zillow median dwelling value: $403,947 (+6.3% YOY)
• Regulation overview: Excessive restrictions and zoning limitations

Regulation overview: Reasonable to excessive

Professionals:

• Excessive income potential: One of many highest ADRs on this rating ($314.50) and strong annual income ($47.4K).
• Rising rental demand: Occupancy charges are larger than many different cities on this record.

Cons:

• Excessive dwelling costs: The median dwelling value of $403K makes producing robust STR money movement tough.
• Regulatory limitations: Strict owner-occupancy guidelines and zoning limits on multifamily STRs.
• Seasonality and competitors: Demand fluctuates outdoors of summer time and tutorial seasons, making year-round bookings inconsistent.

Last verdict: D+

Windfall gives robust income potential for the precise property kind, however the excessive value of entry, regulatory complexity, and seasonal fluctuations make it a dangerous STR funding. Traders would want a waterfront or luxurious itemizing in a first-rate location to make STRs viable right here. For many, the limitations to entry and inconsistent demand make this a weak STR market. Mid-term leases (MTRs) concentrating on school college students, professors, or company vacationers could also be a greater choice on this space.

Hartford, CT

Market efficiency metrics:

• AirDNA market rating: 90/100 (Sturdy)
• Annual income (AR): $26.5K (+10% YOY)
• Occupancy fee: 55% (+6% YOY)
• Common day by day fee (ADR): $166.64 (+3% YOY)
• RevPAR: $93.76 (+9% YOY)
• Energetic listings: 939 (+17% YOY)
• Zillow median dwelling value: $179,170 (+8.2% YOY)
• Yield: 14.7% (Good)

Regulation overview: Excessive

Professionals:

• Excessive AirDNA market rating (90): Signifies robust demand, income progress, and funding potential.
• Low dwelling costs: In comparison with different STR markets, resulting in strong money movement potential.
• Annual income: For a low-cost market, it checks out, and the 14.7% yield is a robust return on funding.

Cons:

• Listings enhance: At 17% yr over yr, this might sign oversaturation within the close to future.
• Regulatory tightening: STRs will grow to be dearer, particularly with licensing charges, zoning permits, and insurance coverage necessities.

Last Verdict: C+

Hartford gives respectable STR money movement, robust appreciation potential, and a rising rental market, however incoming rules might make it extra pricey and difficult to function legally. Traders have to be diligent about zoning, permits, and compliance to keep away from fines or operational shutdowns. 

Given the rising competitors and the potential for extra restrictions, traders ought to rigorously weigh long-term STR viability earlier than getting into the market. Mid-term leases (MTRs) catering to professionals, touring nurses, and college students could also be a safer, extra secure choice on this market.

Philadelphia, PA 

Market efficiency metrics:

• AirDNA market rating: 70/100 (Reasonable)
• Annual income (AR): $28.6K (+15% YOY)
• Occupancy fee: 54% (+6% YOY)
• Common day by day fee (ADR): $172.70 (+9% YOY)
• RevPAR: $95.29 (+16% YOY)
• Energetic listings: 6,747 (+3% YOY)
• Zillow median dwelling value: $218,590 (+3.9% YOY)
• Yield: 13.2% (Respectable)

Regulation overview: Reasonable to excessive

Professionals:

• Above-average tourism demand: Constant year-round bookings pushed by historical past, sports activities, enterprise journey, and important occasions.
• Sturdy income progress: Annual income is up 15% yearly, and RevPAR is growing by 16%.

Cons:

• 6,747 energetic listings: Up 3% YOY, making it tougher for brand spanking new hosts to face out.
• Sophisticated allow course of: A number of licenses and zoning approvals.

Last Verdict: C+

Philadelphia’s short-term rental market gives robust income potential however comes with heavy competitors, strict rules, and tax burdens. Distinctive, high-end, and experience-driven properties have the perfect probability of success, whereas common listings battle to face out.

Traders taking a look at Philadelphia should be ready to navigate zoning, permits, and compliance hurdles. The resort tax and metropolis enforcement of rules add prices and dangers, making this a greater marketplace for premium STRs or mid-term leases (MTRs) catering to enterprise vacationers, medical professionals, and long-term vacationers.

St. Louis, MO

Market efficiency metrics:

• AirDNA market rating: 71/100 (Reasonable)
• Annual income (AR): $29K (+7% YOY)
• Occupancy fee: 54% (+5% YOY)
• Common day by day fee (ADR): $176.81 (+2% YOY)
• RevPAR: $98.10 (+7% YOY)
• Energetic listings: 3,325 (-9% YOY)
• Zillow median dwelling value: $173,661 (+2.4% YOY)
• Yield: 16.8% (Top-of-the-line)

Regulation overview: Reasonable

Professionals:

• Excessive STR yields: These are at 16.8%, because of reasonably priced dwelling costs and substantial rental earnings.
• Listings decline: This quantity went down 9% YoY, indicating a possible discount in competitors as new rules take impact.

Cons:

• New rules: May sluggish STR funding, significantly for non-owner-occupied properties.
• Two-night minimal keep requirement: This might restrict flexibility and scale back bookings from one-night enterprise vacationers in some areas.

Last Verdict: B-

St. Louis has been a top-tier money movement marketplace for STR traders, with low dwelling costs, excessive rental yields, and regular demand. Nevertheless, new rules might make it tougher for traders to enter and function profitably in the long term.

St. Louis stays top-of-the-line markets for STR money movement. Nonetheless, traders ought to intently watch regulatory developments and guarantee their STRs adjust to new allowing and enforcement measures. Those that navigate the brand new guidelines might nonetheless see robust returns, however non-owner-occupied STRs will face growing restrictions.

Charlotte, NC

Market efficiency metrics:

• AirDNA market rating: 92/100 (Sturdy)
• Annual income (AR): $32.1K (+14% YOY)
• Occupancy fee: 55% (+10% YOY)
• Common day by day fee (ADR): $195.07 (+5% YOY)
• RevPAR: $109.82 (+15% YOY)
• Energetic listings: 4,625 (+2% YOY)
• Zillow median dwelling value: $393,531 (+0.9% YOY)
• Yield: 8% (Low)

Regulation overview: Reasonable to excessive

Professionals:

• Excessive income progress: Annual income is up 14% YoY, and RevPAR is rising by 15%.
• Occupancy fee: Growing, suggesting robust demand.
• Rising tourism and enterprise journey: Pushed by Charlotte’s monetary sector, sports activities groups, and occasions.

Cons:

• House costs: Producing robust STR money movement is difficult.
• Low yield (8%): Traders could battle to interrupt even, particularly with mortgage prices.

Last Verdict: B-

Charlotte gives rising STR income progress and robust demand, however excessive dwelling costs and low yield make it tough for many traders to attain robust money movement. The market favors luxurious, high-end STRs with distinctive facilities, whereas normal listings could battle with profitability.

For traders contemplating Charlotte, remember to think about taxes, zoning restrictions, and residential costs earlier than getting into the market. Mid-term leases (MTRs) concentrating on enterprise professionals, medical vacationers, and company relocations could present a extra secure different on this rising metropolis.

Kansas Metropolis, MO 

Market efficiency metrics:

• AirDNA market rating: 98/100 (Glorious)
• Annual income (AR): $35.9K (+20% YOY)
• Occupancy fee: 57% (+9% YOY)
• Common day by day fee (ADR): $206.41 (+11% YOY)
• RevPAR: $120.25 (+20% YOY)
• Energetic listings: 2,668 (-5% YOY)
• Zillow median dwelling value: $236,159 (+3.1% YOY)
• Yield: 15.3% (Sturdy)

Regulation overview: Reasonable

Professionals:

• Excessive income potential: Annual income is up 20% yr over yr, and RevPAR can also be growing 20%—one of many strongest progress charges on this record.
• Demand growing: Occupancy is up 9% YOY, suggesting a wholesome short-term rental market.
• Constant tourism: Sturdy native sports activities, music, and meals scene.

Cons:

• Kansas Metropolis is growing STR oversight, and rules could tighten additional.
• Zoning legal guidelines: Significantly in residential areas with STR limitations.

Last Verdict: B

Kansas Metropolis stays one of many strongest STR markets on this record. It’s reasonably priced, has excessive income potential, and has a robust yield. The mix of rising occupancy, robust income progress, and declining energetic listings makes it a horny funding alternative.

Nevertheless, potential regulatory shifts and growing metropolis oversight imply traders should keep knowledgeable and guarantee compliance to keep away from pricey fines or shutdowns. Those that safe the precise property in a positive zoning space might see substantial long-term success, however new traders ought to rigorously consider neighborhood rules earlier than shopping for.

Richmond, VA 

Market efficiency metrics:

• AirDNA market rating: 89/100 (Sturdy)
• Annual income (AR): $29.3K (+9% YOY)
• Occupancy fee: 57% (+5% YOY)
• Common day by day fee (ADR): $173.70 (+3% YOY)
• RevPAR: $100.32 (+8% YOY)
• Energetic listings: 1,579 (+7% YOY)
• Zillow median dwelling value: $355,189 (+3.8% YOY)
• Yield: 8% (Low)

Regulation overview: Reasonable

Professionals:

• Sturdy STR demand: Excessive occupancy (57%) and rising income (+9% YOY).
• Excessive tourism and rental demand: A rising arts, meals, and historical past scene brings guests year-round.

Cons

• House costs: Limiting money movement potential and making it tough to attain robust ROI.
• Low yield (8%): Most traders will battle to attain robust short-term returns.
• Strict owner-occupied guidelines: In residential zones, it’s powerful for full-time traders to function STRs.

Last Verdict: C+

Richmond gives robust rental demand, secure occupancy, and rising income, however low money movement, strict zoning legal guidelines, and excessive allow prices make STR investing tough.

STRs solely make sense for owner-occupied hosts or traders concentrating on nonresidential zones, the place there may be extra flexibility. As a result of zoning restrictions on multifamily buildings, Richmond is a tricky market to develop in for these trying to scale STRs.

Total, Richmond is best suited to mid-term leases (MTRs) concentrating on enterprise vacationers, college students, and distant employees somewhat than short-term trip leases. Traders ought to rigorously consider compliance prices earlier than getting into this market.

Salt Lake Metropolis, UT

Market efficiency metrics:

• AirDNA market rating: 31/100 (Weak)
• Annual income (AR): $36K (+3% YOY)
• Occupancy fee: 61% (+1% YOY)
• Common day by day fee (ADR): $205.03 (+1% YOY)
• RevPAR: $119.57 (+2% YOY)
• Energetic listings: 4,740 (+4% YOY)
• Zillow median dwelling value: $559,027 (+2.7% YOY)
• Yield: 6% (Low)

Regulation overview: Excessive

Professionals:

• Sturdy occupancy fee (61%): Demand exists, significantly from outside tourism and ski season guests.
• ADR is excessive: Serving to increase general income potential.

Cons:

• House costs: A median value of $559,027 makes it tough to attain optimistic money movement.
• STRs are solely allowed in industrial and mixed-use zones, considerably limiting obtainable stock for STR traders.

Last Verdict: D+

Salt Lake Metropolis’s short-term rental market is likely one of the riskiest on this record because of zoning restrictions, excessive dwelling costs, and the looming risk of a statewide ban on STRs. Whereas occupancy charges and day by day income are respectable, limitations to entry are steep, and authorized dangers might make STR investments unsustainable in the long term.

Last Rating of Zillow’s STR Markets for 2025

1. Kansas Metropolis, MO: B
2. St. Louis, MO: B-
3. Charlotte, NC: B-
4. Buffalo, NY: C+
5. Philadelphia, PA: C+
6. Hartford, CT: C+
7. Richmond, VA: C+
8. Indianapolis, IN: C-
9. Windfall, RI: D+
10. Salt Lake Metropolis, UT: D+

Ought to You Spend money on These STR Markets?

If you happen to’re new to STRs, I don’t suggest investing in any of those cities until:

• You absolutely perceive native STR rules and may navigate permits.
• You purchase an unrestricted property that isn’t prone to future bans.
• You realize the market properly and have a backup LTR plan.

I at all times desire correct trip rental locations over cities like these. However if you would like an exit technique, excessive LTR demand and appreciation may be robust outs.

Last Ideas

Rules matter greater than income potential. STR-friendly trip cities are likely to beat oversaturated metro markets. Select correctly.