We treat this as a question about risk rather than a market call, since nobody can reliably time when a market softens, and short-term-rental owners are not all exposed equally. The most at-risk profile: a late entrant who bought at a high price with a bank-statement or debt-service-coverage (DSCR) loan in a saturated resort or vacation market. The single biggest swing factor is local regulation. Cities can restrict or ban true short-term rentals (often anything under a 28-day stay), and when that happens, achievable rental income drops and values in that pocket follow. We've watched this play out in vacation-heavy areas like Palm Springs and Palm Desert, Anaheim near Disneyland, Newport Beach, Hilton Head, and parts of the Orlando market, where rules have tightened and new permits are limited or grandfathered. Two things soften the risk: - Equity cushions. Most legitimate investors put 20 to 25% down, which is typical for DSCR financing, so they're rarely forced sellers even if cash flow tightens. - Vintage. Long-time owners who bought years ago are generally fine regardless. The pressure concentrates on recent buyers hit by new restrictions, market saturation, and a pullback in discretionary travel spending all at once. Broad markets are less exposed than the headlines suggest. Somewhere like Orange County is not primarily a short-term-rental market outside specific pockets, so a regional wave of forced selling there is unlikely; the concentrated risk sits in the heavy vacation-rental markets. If you're weighing one of these deals, pressure-test the financing and cash-flow math before you commit, and we're happy to help you run it.