Tourism in terms of real dollars has been on a downtrend in recent years. With inflation driving up prices and seasonal spikes in revenue creating illusions in surface-level data, it makes sense there would be pressure on margins for tourism-dependent business owners.
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Short-term rentals have been a growing trend for some time now, and people are still utilizing platforms such as AirBnB as a “safe” way to make extra money or seek returns on real estate investments; however, short-term rentals are not immune to volatility and risk.
I recently did a study on the short-term rental market in Navarre Beach, Florida to test a hypothesis I had about the volatility of nightly rates.
As I was looking at the rates over time, I noticed that there are anywhere from 1% changes in rates to over 40% changes in rates just within a week’s time. This kind of volatility creates vacancy risk for hosts1 who aren’t familiar with market dynamics, and don’t know how to build a strong pricing strategy.
Volatility in the nightly rates are also affected by time-to-stay. Rates for future stays are more unpredictable than rates for current stays. This creates risk, but also opportunities for hosts in the Navarre Beach area.
Observations were made on a sample of the market
Using branch-level FDIC Summary of Deposits data over the past several years, I aggregated deposit account balances to the county level so I could make a comparison of economic health between Escambia, Santa Rosa, and Okaloosa County, Florida.
From 2020 to 2022, there was forced reserve accumulation likely driven by stimulus, suppressed consumption, and deferred discretionary spending. In 2022, this deferred demand was introduced back into the market.
Over the past three years, we are seeing deposit growth slow and even reverse – indicating households and businesses are drawing down reserves to maintain financial stability.
Santa Rosa County is now three consecutive years into a confirmed drawdown phase, while Escambia and Okaloosa Counties are showing emerging confirmation.
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Navarre, FL
Liquidity1 fell ~26.41% from September 2025 to October 2025. A drop of this magnitude in a single month suggests fewer buyers acting on available listings despite inventory conditions remaining relatively stable.
The peak of Navarre’s liquidity occurred in May 2022, when homes were selling at a rate of 1.125 times the standing inventory2. Since this peak, liquidity has fallen 83.31%, reflecting a dramatic long-term slowdown in buyer demand in the area relative to available homes.
Navarre Beach, FL
The Navarre Beach area has seen similar declines. Liquidity in Navarre Beach fell 29.35% from September 2025 to October 2025 indicating the same lack of buyer activity.
The peak of Navarre Beach’s liquidity occurred in April 2022, just one month behind Navarre, when homes were selling at a rate of 0.7419 times the standing inventory. Since April 2022, liquidity has dropped 91.42% as of October 2025.
Data Source: Redfin, a national real estate brokerage.
Christopher Woodward Research 