Aspen, Red River Gorge, Austin: Hot US Airbnb Markets Where STR Prices Are Dropping
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It's easy to look at real estate prices and assume investing is out of reach.
Headlines about high interest rates and soaring home values push the narrative that only the wealthy can invest and build wealth with real estate right now.
But that's not true. Home prices are actually cooling in many key markets across the US. According to AirDNA's 2026 Outlook Report, home values are also dropping in many vacation rental hotspots with proven demand. To prove to you that the best time to invest is now, here are a few markets where home prices are dropping, plus markets you can invest in for less than $250K.
The Big Picture: US Property Prices Are Finally Dropping
We're not saying the housing crisis and affordability issues are over. But home price growth has slowed to just 0.4% year-over-year in the US. That might seem insignificant, but it's a dramatic deceleration from previous years.
According to an analysis of Zillow data, 99 of the 300 largest US housing markets are seeing year-over-year home price declines. That's about one-third of all major markets.
Where is this happening? The Sun Belt is leading the decline. Florida, Texas, Colorado, Arizona, and California have seen the steepest drops. Coastal and Mountain/Lake resort markets are seeing meaningful softening. And we know what you're thinking...Some of those sound like awesome places to invest in short-term rentals. And you'd be right.
Many of the markets with the largest price declines are traditional vacation rental hotspots. Lower entry prices mean better potential returns for investors who act before competition heats back up. There's a ton of opportunity to start investing in short-term rentals in 2026, for almost every budget.
Markets Where Home Prices Are Dropping (AirDNA & Zillow Data)
Based on AirDNA's analysis of Zillow data, here are the top 15 housing markets seeing the biggest price drops as of December 2025.
- Oxford, Mississippi - down 8.9%
- Green Bay, Wisconsin - down 7.2%
- Providence, Rhode Island - down 7.0%
- Red River Gorge, Kentucky - down 6.9%
- Aspen/Snowmass, Colorado - down 6.8%
- Syracuse, New York - down 6.8%
- Austin, Texas - down 6.7%
- Kentucky - down 6.4%
- Ohio - down 6.0%
- Nebraska - down 5.8%
- Wyoming - down 5.7%
- Upper Peninsula, Michigan - down 5.5%
- South Bend, Indiana - down 5.4%
- Sawtooth Mountains, Idaho - down 5.2%
- Hartford, Connecticut - down 4.9%
Why every Airbnb host and investor needs to watch these markets:
It's not just struggling markets. Red River Gorge (an STR hotspot), Aspen (luxury mountain), and the Upper Peninsula (outdoor destination) are all seeing price softening. Even high-growth cities like Austin are on the list. That suggests the cooling is broad-based, not limited to a few struggling regions.
Additional Markets Seeing Sharp Declines
These markets from Cotality's real estate market research didn't make AirDNA's top 15 list but are worth watching, especially for investors willing to take on higher insurance costs.
- Kahului-Wailuku, Hawaii (Maui) - down 8.0%
- Victoria, Texas - down 7.4%
- Wichita Falls, Texas - down 7.2%
- Napa, California - down 7.1%
- Naples, Florida - down 6.8%
- Punta Gorda, Florida - down 6.2%
- Cape Coral, Florida - down 6.2%
- North Port, Florida - down 5.9%
- Rome, Georgia - down 5.2%
- Sebastian, Florida - down 5.2%
A quick warning: Price drops can signal higher insurance costs, tougher regulations, or other hidden risks. In Florida, Hawaii, and California, insurance is the main culprit that seriously eats into your revenue. In other markets, it might be slowing tourism or oversupply. Always dig deeper before buying.
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AirDNA's Best Markets to Invest In for $250K or Less
AirDNA analyzed US markets where the average for-sale home prices fall between $100,000 and $250,000. They ranked them by yield, which is annual revenue divided by purchase price.
Here are their top five.
1. Finger Lakes, New York
Average home price: ~$184,000 | Average revenue: ~$36,000 | Yield: 19.6%
Four-season demand from lake life, wine country, fall foliage, and winter getaways. Average stay is nearly four days, meaning less frequent turnover. Peak season occupancy reaches 70% in summer.
2. South Bend, Indiana
Average home price: ~$180,000 | Average revenue: ~$35,000 | Yield: 19.6%
Big-event booking spikes from Notre Dame football and graduation, plus steady year-round demand from regional tourism. The barrier to entry is low compared to other university-driven markets.
3. Rochester, New York
Average home price: ~$182,000 | Average revenue: ~$35,000 | Yield: 19.4%
Major museums, a packed festival calendar, and easy access to the Finger Lakes. Average stay is almost six days, which spaces out turnovers for self-managing hosts.
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4. St. Louis, Missouri
Average home price: ~$176,000 | Average revenue: ~$34,000 | Yield: 19.3%
Sports, concerts, conventions, and major cultural institutions drive consistent leisure and midweek bookings. One caveat: a court order has blocked STR permit enforcement, so regulations are uncertain.
5. West Coastal Michigan
Average home price: ~$186,000 | Average revenue: ~$36,000 | Yield: 19.2%
Lake Michigan beach towns like Muskegon, Holland, and Grand Haven attract repeat summer travelers and event-driven guests. Tulip Time Festival and other seasonal events create predictable peak periods.
What makes these markets work:
Diversified demand (not just one event or season), steady occupancy, and realistic entry prices that leave room for furnishing and reserves. These are winning markets that don't demand millions to jump in.
Looking to invest in STRs, but don't have capital? Check out our guide on how to start investing in short-term rentals with $0 here.
How to Find Your Own Affordable Market (Kai's Golden Triangle)
AirDNA's list is a great starting point. But you still need to vet markets to make sure there's demand.
Kai's Golden Triangle method says a winning Airbnb market usually sits inside a triangle formed by three things:
- A major city (for steady weekend traffic)
- A major attraction (national park, ski resort, coastline)
- A transport hub (airport or easy highway access)
Here's how to use it. If a market is missing all three, move on. If it hits two of the three, it deserves a deeper look. If it hits all three, that's a flashing green light.
The affordable twist? Don't just aim for the popular hotspot market that ticks all the boxes. Those markets are expensive. The edges just outside of hotspot markets often hide the best opportunities at lower prices. Think Candler, North Carolina, instead of Asheville. Same mountain views, fewer regulations, better returns.
Rob's Super Quick Napkin Method to Vet an Airbnb Property
Falling prices can be a trap. Insurance costs, changing STR regulations, or declining demand might be the real story behind a cheap listing.
Here's Rob's quick Napkin Method to see if a property pencils out.
The formula: ADR × Occupancy × 30 = Estimated Monthly Revenue.
Subtract your major costs: mortgage, utilities, cleaning and maintenance, and platform fees (around 15%).
If you're not clearing 15-25% profit, keep looking. It's a tough standard, but it helps you steer clear of properties that take an eternity to break even.
👉 Read our full guide on finding profitable Airbnb properties and markets to learn more.
Key Considerations and Risks
Entry price is only the starting line. Leave room in your budget for furnishing, emergency reserves, renovations, and early operating expenses. A $180,000 home might need $20,000 in work before it's guest-ready.
Yield matters more than top-line revenue. A property that generates $35,000 in revenue on a $180,000 purchase is better than one that generates $50,000 on a $400,000 purchase. Focus on what you keep relative to what you spent.
Demand durability beats peak pricing. Markets that rely on a few high-ADR weekends are risky, even at a lower budget. One bad weather weekend or event cancellation can wipe out your year. Steady, repeatable demand reduces vacancy risk.
Pay attention to days on market. Don't just look at new listings. Search for properties that have been sitting on the market for a while first. Properties with longer days on market mean you can negotiate for a lower price.
Supply growth can outpace demand. Some affordable markets saw runaway supply growth after the pandemic. Demand may not have kept pace. Check occupancy trends over the last 12-24 months using AirDNA before you commit. Get 10% off AirDNA with our AirDNA promo code link.
The Takeaway
2026 is shaping up to be a compelling year to invest. Home prices are finally cooling in some very promising markets. The STR premium is rebounding. But you can't just chase low prices. You need a system.
Vet the market with the Golden Triangle. Vet the numbers with the Napkin Method. Dig into why prices are dropping.
Some of the best opportunities right now are in markets that other investors are overlooking. Finger Lakes. South Bend. West Coastal Michigan. And yes, even Florida markets where prices have pulled back from pandemic peaks.
The best time to plant a tree was 20 years ago. The second-best time is when everyone else is standing on the sidelines. So, right now.
Want Help Finding Your Next Affordable Market?
Our coaches have helped investors find deals and turn properties into highly profitable short-term rentals that scale to financial freedom.
If you need help finding a market and building a game plan to build wealth with STRs, book a call with our team of experts.
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