Mercer Island, WA Airbnb Market Data, Statistics, and Occupancy Rates

Mercer Island Short-Term Rental Market Overview

Mercer Island is a small, affluent enclave on Lake Washington with just 16 active Airbnb listings, creating a tight supply environment that can work in an investor's favor when demand aligns. Average annual revenue sits at $39,462 on a trailing 12-month basis, but the market's extremely high home values—averaging over $3.56 million—mean the revenue-to-price ratio is challenging. Seasonality is pronounced, with summer months driving the bulk of income, while occupancy averages 27% overall, well below the Washington state average of 36%. For investors who already own property on the island or can source deals well below the median, the limited competition and premium setting offer a niche opportunity worth evaluating carefully.

Key Market Statistics

According to Rabbu market data, the Mercer Island short-term rental market shows:

Data sources: Rabbu proprietary analytics as of Apr, 27 2026 and Zillow Home Value Index (ZHVI) as of Apr, 27 2026.

Why Investors Consider Mercer Island

Mercer Island attracts investor attention because its extremely limited supply and affluent island setting create a niche market where well-positioned properties can capture premium seasonal demand.

Expert Market Assessment

"Mercer Island presents a competitive but constrained opportunity. The ROI score of 39 out of 100 reflects a market where strong demand signals—favorable supply/demand balance and rising investor interest—are offset by a challenging revenue-to-price ratio driven by home values north of $3.5 million. Seasonality is sharp: July and August each generate over $5,300 in average monthly revenue, while January and February dip below $1,850, creating a roughly 3× spread between peak and trough. This is a market best suited for investors who can acquire property at a discount to the market median or who view STR income as supplemental to long-term appreciation on a high-value asset."

— Rabbu Market Analysis Team

Key Airbnb Metrics & Trends in Mercer Island

Average revenue by month in Mercer Island

Revenue on Mercer Island follows a clear summer-peak pattern, with July ($5,345) and August ($5,301) generating nearly three times the income of the slowest months, January ($1,844) and February ($1,811). Investors should budget for significant revenue swings and plan pricing strategies that maximize capture during the June–September window.

Active Airbnb listings by property size in Mercer Island

The entire reportable supply on Mercer Island consists of 1-bedroom listings, with 8 of the 16 active listings falling into this category. This concentration could signal an opportunity for investors willing to list larger properties—multi-bedroom homes may face little to no direct competition on the platform.

Average daily rate (ADR) by property size in Mercer Island

One-bedroom listings on Mercer Island command an ADR of $120, while the overall market ADR of $190 suggests unlisted or less common larger properties pull the rate higher. Investors considering multi-bedroom offerings may find room to push nightly rates meaningfully above the 1-bedroom baseline.

Average RevPAN by property size in Mercer Island

One-bedroom listings generate a RevPAN of $35, reflecting the combination of a $120 ADR and 29% occupancy. This modest figure underscores the importance of either driving higher occupancy through competitive pricing or targeting larger property sizes where per-night revenue could offset lower booking frequency.

Average occupancy rates by property size in Mercer Island

One-bedroom units average 29% occupancy, slightly above the market-wide 27% average, indicating they perform roughly in line with the broader pool. The below-state-average occupancy across the board highlights the seasonal nature of demand and the importance of aggressive marketing during peak months.

Average monthly revenue by property size in Mercer Island

One-bedroom listings earn an average of $2,040 per month, notably below the market-wide average of $3,288. The gap suggests that any larger properties in the market are generating substantially higher monthly revenue, making them the likely drivers of the overall market average.

Average annual revenue by property size in Mercer Island

At $24,489 per year, 1-bedroom listings earn roughly 62% of the market-wide annual average of $39,462. Investors targeting higher return potential should explore multi-bedroom configurations, which appear to capture a disproportionate share of the market's total revenue despite limited representation in the data.

Most common amenities for Airbnb listings in Mercer Island

Every listed property on Mercer Island includes a kitchen, while 94% offer parking and 88% provide a washer, dryer, and self check-in—setting a high baseline for guest expectations. A dedicated workspace (81%) signals appeal to remote workers, and the relatively low prevalence of waterfront (13%) and lake access (6%) suggests these features could serve as strong differentiators for properties that have them.

Understanding Mercer Island's ROI Score: 39/100

Rabbu's ROI Score is a proprietary metric that evaluates short-term rental investment potential based on multiple factors.

How the ROI Score is Calculated

What This Means for Investors

Mercer Island's ROI score of 39 out of 100 places it in the 'Competitive Opportunity' band, meaning the market has genuine demand-side appeal but significant barriers to strong cash-on-cash returns—primarily the below-average revenue-to-price ratio driven by home values averaging $3.56 million. The above-average supply/demand balance is a bright spot, confirming that guest demand outstrips the 16-listing supply, while occupancy stability grades as average and market growth trend sits below average. Investors should pair this data with thorough local regulatory research and focus on sourcing properties well below the market median to improve the return profile.

Short-Term Rental Regulations in Mercer Island

Understanding local STR regulations is essential before investing in Mercer Island. Here's the current regulatory landscape:

Permit Requirements

Short-term rental operators on Mercer Island, Washington, may need to obtain a business license or STR-specific permit from the City of Mercer Island. Investors should verify current registration and permitting requirements directly with the city's planning or licensing department before listing a property.

Key Restrictions

Common restrictions in similar Washington markets include occupancy caps, minimum-stay requirements, noise ordinances, and parking provisions. HOA covenants are especially relevant on Mercer Island given the residential character of the island, and investors should confirm that any homeowners association allows short-term rental activity before purchasing.

Tax Obligations

Washington State levies lodging taxes on short-term rentals, and King County may impose additional local taxes. Platforms like Airbnb often collect and remit state and local taxes on behalf of hosts, but operators should confirm their full tax obligations—including any business and occupation (B&O) taxes—with a local tax advisor.

Regulations subject to change. Always verify with local authorities before purchasing. A Rabbu partner agent specializing in Mercer Island can provide current regulatory guidance.

Future Outlook & Long-Term Forecast

"Over the next 12–18 months, expect Mercer Island's STR market to remain a low-supply, seasonal play. Summer months (June–August) should continue generating the lion's share of revenue, with monthly averages likely holding in the $4,800–$5,400 range during peak season. Year-over-year listing growth of 155% signals rising investor interest, which could pressure occupancy and rates if supply outpaces demand. Investors entering this market should plan for ADR stability around $185–$200 and annual occupancy in the mid-to-upper 20% range, with upside tied to differentiated properties—particularly those offering waterfront or lake access."

— Rabbu Market Analysis Team

Frequently asked questions about Airbnb in Mercer Island, WA

What is the average Airbnb occupancy rate in Mercer Island?

The average occupancy rate for Airbnb listings in Mercer Island is currently 27%, which falls below the Washington state average of 36%. This lower figure reflects the market's pronounced seasonality—summer months see meaningfully higher booking rates while winter months are quieter. Properties with standout amenities like waterfront access or a dedicated workspace tend to perform above this average.

How much do Airbnb hosts make in Mercer Island?

Based on trailing 12-month booking data, the average Airbnb host in Mercer Island earns approximately $3,288 per month or $39,462 per year. Revenue varies significantly by season, ranging from around $1,811 in February to $5,345 in July. Individual results depend on property quality, pricing strategy, and how effectively hosts capture peak-season demand.

Is Mercer Island a good market for Airbnb investment?

Mercer Island carries an ROI score of 39 out of 100, categorized as a 'Competitive Opportunity.' The market benefits from very limited supply (just 16 active listings) and an above-average supply/demand balance, but the extremely high average home value of $3,564,253 makes the revenue-to-price ratio challenging. It can work well for investors who already own property on the island or who find below-market acquisition opportunities, particularly if they optimize for the strong summer season.

What is the average daily rate (ADR) for Airbnb in Mercer Island?

The average daily rate for Airbnb listings on Mercer Island is $190, which is notably below the Washington state average of $393. This reflects the predominance of 1-bedroom listings in the market, which average an ADR of $120. The overall market ADR suggests some larger or premium properties pull the average higher, indicating potential for rate growth with well-appointed, larger units.

Are short-term rentals legal in Mercer Island?

Short-term rentals operate on Mercer Island, but investors should verify current permitting and licensing requirements with the City of Mercer Island. Washington State and King County impose lodging and other applicable taxes on STR operations. Local HOA restrictions are also common in this residential community, so it's important to review any covenants before purchasing a property intended for short-term rental use.

When is peak season for Airbnb in Mercer Island?

Peak season on Mercer Island runs from June through August, when average monthly revenues climb to between $4,803 and $5,345. July is the single highest-earning month at $5,345, closely followed by August at $5,301. The shoulder months of May and September also perform well, with revenues of $3,514 and $3,849 respectively, while winter months (January–February) represent the slowest period at under $1,850.

How many Airbnbs are there in Mercer Island?

As of April 2026, there are 16 active Airbnb listings on Mercer Island. This is a very small market by listing count, though the supply has grown significantly with 155% year-over-year growth. The limited inventory means competition is low, but it also means the market is still developing and data is based on a relatively small sample.

How is Airbnb revenue calculated in Mercer Island?

The annual and monthly revenue figures for Mercer Island are derived from the trailing 12 months of historical booking performance for active comparable Airbnb listings in the market—not a forward-looking projection. We average each comparable listing's actual revenue per available night (RevPAN) by month over the past year, remove regional outliers, and roll the remainder up to a market-level historical average. This approach anchors the figures to what hosts have actually earned recently while naturally reflecting seasonal peaks and slower months, since each month uses its own historical performance. Individual results can vary based on property quality, pricing strategy, and operational management.

About Rabbu Market Data

Rabbu provides Airbnb and short-term rental market data and statistics across the United States. Our mission is to empower investors with accurate insights and easy-to-use tools, so they can confidently identify and act on the best opportunities in the Airbnb market.

What this data includes

• Regularly updated active Airbnb and STR listing counts for Mercer Island and comparable markets
• Average daily rates, occupancy rates, and RevPAN metrics tracked over time
• Monthly and annual revenue estimates based on trailing 12-month booking performance
• Home value benchmarks sourced from the Zillow Home Value Index (ZHVI)
• Amenity prevalence data across active listings to identify guest expectations

Sources and disclaimers

Rabbu proprietary analytics as of Apr, 27 2026 and Zillow Home Value Index (ZHVI) as of Apr, 27 2026. Revenue projections are estimates based on comparable properties and do not guarantee future performance. Data is based on a small sample of 16 active listings; metrics may shift meaningfully as supply grows. Local regulations and HOA restrictions may limit or prohibit short-term rental activity; always verify before investing.