A New “Land Rush” and the Real Recession Hits

Dave:2026 is almost here and that means we are still in the swing of prediction season and we got good predictions for you here today. I’m Dave Meyer joined by Kathy Fettke and Henry Washington. And today we’re sharing our boldest predictions and our hottest takes for 2026. We’ve each brought our own ideas about what could surprise investors in the year ahead, what might finally break, and where the biggest opportunities could emerge. Buckle up, this is On the Market. Let’s jump in. Henry, how’s it going, man? How are you?

Henry:Fantastic. Good to see you. Good to be here.

Dave:You got some bold ideas for us today?

Henry:I don’t know how bold it is, but I got one for you.

Dave:You got some takes. Okay. What about you, Kathy? Anything spicy for us?

Kathy:Oh, I think so. Yep. Opportunity.

Dave:Okay.

Kathy:Yep.

Dave:All right. Well, let’s just jump into this. We don’t want to get too spicy too fast. So I think Henry, we’re going to start with you. Maybe you can warm us up.

Kathy:I’m spicier than Henry.

Dave:You said yours was spicy, so Henry said his is just mild. Okay.

Henry:Yeah, it’s mild toss. Mild in the sense that I think people have thought about it or maybe even thought that 2025 would be the year that this happened, and to some degree it did. But I think in 2026, there’s a real possibility that we’re going to see a mass exit of Airbnb properties, especially from the mom and pop hosts who are barely breaking even right now. I literally, this morning, sent two addresses to my realtor to say, “Hey, what could I get for these two properties right now?” And there’s a couple of reasons I think this. One is because of what’s happening in the market. We’ve got another interest rate quarter point drop, which helps with affordability. We’re starting to see slight upticks in buyers entering the market. I am personally seeing more showings pop up on listings I’ve had on the market for a couple of months over the last week to two weeks,Which is unusual for the winter market right before Christmas. Typically, you’re not seeing a spike in showings, but I think that people are starting to feel like, “Hey, maybe there’s some opportunity out there.” We’re starting to see inventory go down in some markets where it was typically trending up. And I think if interest rates come down anymore, that’s just going to allow for some people to enter the market. But what I think is that these people who are holding on to these Airbnb assets that are breaking even or maybe losing a little bit of money each month, they didn’t sell in 2025 because it just wasn’t a good time to do it. Or maybe they tried to sell and they couldn’t transact because they have to sell these properties for a decent amount of money. Typically, a lot of these operators paid a lot of money for these properties expecting them to produce a certain amount of revenue and they’re just not performing.And with 2025 not being the best time for a lot of these people to sell, I think they’re going to try to capitalize on a few more eyeballs, a little bit lower interest rate and the opportunity and the possibility of being able to get out. Maybe they’ll take a little bit of a loss, maybe they’ll break even, but I think you’re going to see a lot more Airbnbs convert into listings and people getting out while they have an opportunity to get out in 2026.

Dave:Well, first of all, Henry, I feel attacked, okay? I actually agree wholeheartedly with you on this. I bought a short-term rental in 2018. The price has more than doubled. So my equity, I think, is 3X, maybe more. It’s been amazing, but the cashflow is really drying up. It’s harder and harder to get bookings. And I bought this place because I kind of wanted to use it and I just use it less and less.And I’m thinking about all the work I put into it. I’m like, should I just get out now and take the money and do something else because I see opportunity in other parts of the market? But then I’m like, “This is the cheapest I’ll ever get a ski house for, so maybe I shouldn’t sell this and I should just sit on it. ” But I definitely agree with you. I think there’s going to be more and more people getting out of this market because this is obviously not a blanket statement, but it’s just not a good time to be a short-term rental investor right now. I’m sorry it’s not.

Henry:I’m going to put a caveat on that because I totally agree with you. I think it’s not a good time to be a casual short-term rental investor.I think if you are a professional short-term rental investor and you are studying markets and you are studying travel data and you are understanding what markets have certain regulations, and if this is truly what you do and you are excellent at providing experiences and researching what types of amenities you need, if you are that type of Airbnb operator, it’s probably not a bad time because there’s properties for sale. Sure. There’s people who are just casual who are looking to get out. Like myself, I would call myself a casual Airbnb investor. All of my short-term rental properties were bought because they have another exit and the short-term rental was icing on the cake. Professional short-term rental operators are typically only buying with one exit in mine and they’re operating professionally. So I think you’re going to see that a lot of the casual investors see an opportunity to sell that property and get close to what they want and get out of the game.And you also have to think about it. There’s a lot of Airbnb investors who are like me, who are just real estate investors as a whole at heart and they can see an opportunity like you, for example.You’ve got a couple hundred grand in equity, I got a breakeven or a property that’s losing me a little bit of money. I can deploy that couple hundred grand right now because they are buying opportunities on the market right now. You can buy cashflow again right now. You can buy great flips with great margins right now. Multifamily, there’s opportunities. And so I think you got a mix of people who are going to sell and redeploy. You got a mix of people who are just looking to get out because they got in thinking they’d make a fortune and found out it’s a whole lot harder than it is. And 2026 market conditions I think are going to make people feel like they might be able to sell it and either turn a small profit or just get out and break even.

Dave:What do you think this means for the markets where there’s a high concentration of short-term rentals?

Henry:I think the markets where there’s a high concentration of short-term rentals that were historically vacation rental markets are going to be fine because they have regulations or lack of regulations around short-term rentals because that’s what the economy calls for. I think of places like Hot Springs, Arkansas. That place was a vacation rental metropolis before Airbnb. If people start selling their Airbnbs, they’re going to be fine. But in markets like, you can see places like Joshua Tree where Airbnb investors are just getting out in droves and that is hurting the market because there’s less places for people to stay. So it just really depends on the market.

Kathy:I’ve seen a little bit of a different take on this because you have so many CPAs teaching the tax loophole with Airbnbs, with the bonus depreciation. That’s

Dave:A good

Kathy:Point. I just spoke at a CPA event where there was hundreds of people there. And the number one method for saving taxes was to go buy an Airbnb. So I think a lot of those people, doctors, dentists, high income earners who need that tax break are running out and doing it and may not be even as concerned about the cash flow from it. They just want that huge tax break. So the people who are trying to get out may just have an opportunity to sell to somebody who wants in.

Dave:Sounds

Henry:Like a perfect storm.

Kathy:Yep.

Dave:Yeah. I’m curious about that. I think there’s still obviously opportunities. Sometimes with my own, I’m like, maybe I should just wait this out because people are going to all sell and then I’ll just still be there. I’ll be like, I keep thinking about selling this property, but the ski resort it’s near just announced it was doing like a massive renovation. They’re building a gondola to the town for the first time. It’s getting like 20% bigger. I think it’s going to be the second biggest resort in Colorado. I’m like, maybe I should just hold onto it.

Kathy:I think it should hold. Unless it has a ton of deferred maintenance, then I would hold it with that kind of news.

Dave:No, it’s in great shape.

Kathy:And you have a low interest rate on it, right?

Dave:Yeah, like under three, I

Kathy:Think. Yeah. You actually have to keep that.

Dave:Yeah, I know. I know. And I want to go use it. So I think we’re going to keep it.

Kathy:Yeah.

Dave:All right. I like this bold prediction, Henry. I don’t think it’s that bold. I do think it’s going to start playing out though because people have been talking about this and I think it does create risk, but also I think opportunity for sure for good deals, especially in places where we talked a lot mostly about vacation rental places, but if people are in a normal city, maybe they bought a place with an ADU thinking they were going to Airbnb it, now they want to get rid of it, that’s a duplex.That’s a good place that you could buy and rent out. Or midterm rental one, long-term rental the other. There’s going to be maybe some more interesting inventory coming on the market, which is always a good opportunity. All right, we got to take a quick break, but we’ll be back with Kathy’s spicier prediction right after this.Welcome back to On the Market. I’m here with Henry and Kathy giving our bold predictions for 2026. We heard Henry’s about short-term rentals coming on the market, flooding the market perhaps. Kathy, what is your spicy prediction?

Kathy:I think there is going to be a scramble to buy property and land in the newly designated opportunity zones.You’re not going to know where those places are right away. You’ll definitely know by the middle of next year. In the process, I can just tell you from my experience, one of our realtors that we work with in St. Petersburg, Florida drove me around opportunity zones in St. Petersburg years ago, right when they announced it, right before they were announcing it. And these were rough areas. I was like, “I don’t think I’ve got the stomach for this. ” I was afraid to get out of my car, let’s just put it that way. But the lots were like 20 grand and I should have just trusted them and bought a bunch. Well, it was within months. Those lots were worth 100, 150 because that’s what Opportunity Zones can do. So we’ve got now with the one big beautiful bill that opportunity zones are permanent now and the governors are going, I think it’s the governors are going to be designating new opportunity zones and they’re going to be doing it every 10 years.And the next time that they announce it, it has to be by I think the end of June of 2026. Yeah,

Dave:That’s right.

Kathy:But some governors are already letting people know and the cat’s out of the bag in some areas. So getting in front of that and on top of that, it’s going to be a little bit stricter because last time around some opportunity zones were not in impoverished areas at all. I don’t know how that happened, but this time it’s a little bit stricter. So you have to have, again, the stomach for it. These are not going to be nice areas generally, but in this case, it was just lots. We just buy the lots and sit on it. You don’t even necessarily have to have an opportunity zone fund or be looking for the tax benefits. If you just buy the property in an area that’s designated opportunity zone, then you’ve got these big funds who may want what you own. So lots of opportunity there and an opportunity to improve these areas where they’re designated for a reason.Housing is needed, affordable housing, so you can kind of make a difference in those areas while you’re making some money.

Dave:I like this one. I had not been really thinking about this. I’ll be honest, I kind of forgot that they were coming out with the new opportunity zones. I think it’s July 1st or whatever is the deadline. But maybe Kathy, can you explain to everyone what an opportunity zone is?

Kathy:I’ll do my best, but it’s complicated and it’s changed a little bit. But with the first round is basically like a 1031, but different than a 1031. So if you sold a property and you had, let’s say, a $500,000 capital gain on that, you could 1031 exchange it, but you would have to buy the property within 45 days. There’s all these limitations and it has to be the same price. And with the opportunity zone that all changed where you could sell a property, have that $500,000 gain and maybe just put the $500,000 gain into the opportunity zone. You wouldn’t have to put the whole thing in. Like if you sold the house for a million dollars, the gain is 500, you had originally paid 500. With the 1031, you have to do the whole million with the opportunity zone. You could just take that 500,000 and invest it.But the difference, the big difference is that you eventually have to pay your capital gain. If you bought a property in an opportunity zone with that $500,000 gain, you will then in the future still have to pay your tax on that. But the property that you bought with that $500,000, you wouldn’t have to pay any gain on that. Again, talk to your CPA. It is complicated. That’s why a lot of people just don’t do it because it’s complicated and you also had to have a fund. It couldn’t be. You just went out and bought it. You have to have an opportunity zone fund and file it that way. But like I said, you don’t have to do all that. If you just buy the property in an opportunity zone area, you know that lots of money is going to be pouring into that area. And if you buy right where development is expected, then you could really see an upside just holding it.

Dave:Awesome. Yeah. I mean, it does seem like an amazing opportunity. From my understanding, it’s basically a long-term thing. You need to put money in.

Kathy:Yes.

Dave:And then if you invest it over … I think last time there was different tiers. It was like if you kept it in for a certain amount of time, you got to defer a certain amount of taxes. I think if you went the full 10 years, you got to defer 100% of your capital gains- On the

Kathy:New property.

Dave:… on the new property. Yeah. Yeah. So there’s all sorts of really interesting things here and I would be interested to see how much the previous opportunity zone spurred property value growth, but I’m imagining in ones that were done right, that there probably are really good growth and this will be interesting and hopefully a good way to spur investment into communities that need it. So I think this is a good one. I like this prediction.

Kathy:I

Dave:Assume you’ll be looking, Kathy.

Kathy:Yeah. Yeah. As you know, that’s part of our business model is having boots on the street all over the country. So the teams that we work with will be on top of it. We actually are working with a team in Fort Worth that’s building an opportunity zone there. Oh,

Dave:Cool.

Kathy:Yeah, we’ll be paying attention, but again, this all happens next year, so it’s really a next year thing. All

Dave:Right. Well, this is a great thing to keep an eye out for. I’m sure there’s going to be a lot of news because yeah, they’re designated by each state, the governor office and each state does it. So as these governors come out with this stuff, there’s going to be really interesting opportunities for everyone to keep an eye on. I like this one. Thank you for reminding me and everyone about this one, Kathy. All right, we got to take a quick break, but I will give you my bold prediction when we come back. Stick with us.Welcome back to On the Market. I’m here with Kathy and Henry giving our bold predictions for 2026. So far, Henry made his about Airbnbs or short-term rentals specifically. Kathy shared hers about a potential land rush once opportunity zones are announced. I’m going to go a little bit outside of housing and I am going to just stick with my bread and butter and talk about economics. I think we are going to enter what I call the common person recession, the CPR. Kathy and Henry, I don’t know if you listened to this episode, but I literally spent hours of my life defining with new data a metric for an actual recession because you might know about this, but I think the current definition of recession, which doesn’t really exist, and the word recession means absolutely nothing. I think it’s completely nonsense and completely nonsensical. So I spent a lot of time trying to think about what is an actual recession?What actually matters to Americans? And I came up with two things that need to be true to not be in a recession. Real wages need to be going up, meaning the average American spending power has to be increasing and unemployment can’t really be going up at a fast rate. I use something called the SOM rule that doesn’t really matter. As of right now, we are not in a normal person recession. Real wages are up, unemployment rate is relatively low. My bold prediction next year is that we are going to tip into the normal person recession. I think that real wages are going to turn negative as inflation goes higher than wage growth because AI, because a bad labor market, because inflation has gone up four or five months in a row. And even though I do think it will probably peak next year, it’s not going to come down that quickly.And so I am not feeling very optimistic about the conditions, the economy for average Americans. And I don’t know if that means the National Bureau of Economic Research will decide to call this a recession because they get to choose that completely subjectively. But on the one I made up and I made a whole episode about this a couple weeks ago, if anyone wants to listen to this, I think we are going into a normal person recession, a common person recession because things are not good out there for the average American. And I think we need to just acknowledge that even though the stock market is great, things for the average American is not great. And I think that’s going to spill over into real estate if I had to guess.

Kathy:I mean, I guess what I should hope for is that we’re seeing rates coming down and anytime there’s rate cuts like that, that’s money is cheaper to borrow and it tends to stimulate the economy. So that would be the little bit of hope that I would be leaning on that and QT, the quantitative tightening is over. And so that to me tells me more stimulus is coming. And if that’s the case, perhaps it will spread out into the economy. That’s my hope.That’s what I’m going to be thinking and praying about. And I don’t know, doing like an economy dance, not a rain dance, an economy dance. I hope

Dave:You’re right too.

Henry:Yes. Affordability is a problem, but I think it’s really a problem for the young college graduate, the people just starting out because the average American has probably been working for some period of time, may have some savings, may have had a different job or two, could possibly afford a house where rates are coming down. But when you’re just starting out, I mean, wages aren’t that much different in terms of starting out salaries now than they were when I got out of college and affordability is drastically different. I just don’t know how young professionals get into home ownership, especially if they’re going to work in some of these cities where these companies that they want to work for are located. They’re just more expensive places to own real estate. It’s not like you’re going to work for a major corporation in the middle of Kentucky somewhere.The affordability is just that young professional, I can’t see how they’re not coming out of college in a recession.

Dave:Yeah. I mean, the last month we have data for the unemployment rate for people 16 to 24, this is people who are looking for work. Unemployment rate, 10.4%. Wow. That’s a lot. Wow. That is very high.And I think this is happening all over the economy. There’s so many things happening where wages are stagnating, where job openings are lower, where people are struggling. And I want to be clear, this is not a political thing. I think this is the accumulation of five years of inflation. We’ve had inflation for a really long time and people are just stretched. People can withstand it for a couple of years, but it’s been five years. And even though we’re not back at the … We’re at 3% inflation roughly right now. We’re not at 9%, thank God. But we’re not going to have deflation. I’m sorry, but I know people say, when are prices going down? They’re never going down. I can just tell you that maybe asset prices will go down. Stock market might get cheaper. Real estate might get cheaper in certain places. Goods and services are not going to get cheaper in aggregate.It’s really never happened. It’s not even good. You don’t even want that to happen. What we need is disinflation, which is for the pace of inflation to go down, but that’s not even happening right now. The last four months in a row, it’s gone back up and people are just stretched thin. And I think American economy has been remarkably robust. People have continued to spend. Businesses have continued to spend, but I think the rubber has to hit the road at some point, and I think it’s going to happen in 2026.

Kathy:Yeah. I think there’s a lot of confusion when people hear, okay, inflation’s not at 9%, it’s down at 3%. There’s this thought that prices went down at that rate and no, no, it’s the growth of inflation. So I’ve said this before. It’s like one year you gain nine pounds, the next year you only gain eight pounds, and the next year you only gain five, and now you’re at three. You’re not back at your original weight. You’ve gone up. And so people are like, prices are still high. Well, yes, they are because they’re still up that 9% plus 5% plus whatever it was. And the only thing that’s going to help is wages going up and prices kind of stabilizing. And after a few years of wages have gone up enough, then people will be back in an affordable place. But we’re still paying the price of the massive inflation from right after COVID and during COVID, which I believe is from, again, massive stimulus, massive stimulus thrown into the economy.And now we’re kind of turning back into more stimulus. So that’s why I’m hoping it turns into not inflation, but hopefully more jobs. We’ll see. We’ll see.

Dave:In my opinion though, the problem is even jobs, like the unemployment rate is low. It’s that wages are not keeping up.

Kathy:And

Dave:This has gone … I mean, I did another on the market about this the other day. Since 1984, in 40 years, real wages have gone up 12%. That is so embarrassing for our country. It is so ridiculous that the average American’s quality of life has only gone up by 12% in 40 years. It’s crazy. Actually, one of the bright spots about the economy over the last few years is real wages are up right now. I want to be clear, they’re up. That means people’s incomes are growing faster than inflation right now. That’s great.

Kathy:Yeah.

Dave:It’s what I think will change though, because I just think with AI and the labor market, people are losing their bargaining power in the labor market and with inflation staying high, those lines are going to cross. This is how I think I’m imagining a short in my head and those lines are going to cross. It’s basically that we are going to start to see wage growth go down. And again, I’m sure there are policy implications to all this, but I think a lot of it is like when you have a technology as disruptive as AI, it just creates a little bit of chaos. And I think that’s what we’re going to see. People are hesitant to hire right now. They’re hiring at lower wages. When the unemployment rate starts to go up, which I expect it will, people will accept lower wages for jobs, and that’s going to, I think, put us a little bit backwards.And I don’t know if we call this a real recession, but I have to imagine the average American’s going to start cutting back on spending. And I think this spills into real estate a little bit. I’m not trying to be super dramatic here, but if you think about what Henry just said about young people, are they going to go move in with a significant other or are they going to still have four roommates? Are you going to live with your parents for as long as possible? It’s one of the reasons I don’t think rent is going to grow as much next year, and I don’t think we’re going to have a lot of household formation because I just don’t think people are in a position to take financial risk right now. Personally, I wouldn’t. If you were young and you were trying to find a job in an AI world, I don’t know if I’d take a financial risk.And I think that is going to become increasingly common.

Henry:Yeah. I think it’ll be interesting to watch how the long-term effect on real estate will be because we are so accustomed to people following the American dream, go to school, get a job, buy a house, or go to school, get a job and pay rent. But now people are struggling to do either. And so what does that look like in the long term and how does that impact investors like us? When I was doing some research for a different presentation, one of the two of the metrics we saw were that since 2019, home price growth is about 43%. I need to double check that, but-

Dave:It sounds right.

Henry:Income growth during that same period, since 2019, 7%.

Dave:It’s crazy. It’s insane. And it’s not just housing. I think that’s the thing is we always think about housing, but just ordinary expenses have gotten crazy. I don’t know about you guys. I am in a fortunate financial position, but I’m in shock every time I go to the store. I still am in shock every time I go. It’s crazy. There are obviously things going on with the government, but there are also just structural, cyclical things going on in the economy as well that lead to this. And so I think it’s going to be tough. Kathy, I hope you’re right. Maybe there’s going to be some stimulus. Actually, I’m not sure if I want stimulus. I’m not going to say that. But maybe rate cuts will create more hiring. But do you guys really think the reason the job market’s slow is because the federal funds rate was at 3.75 instead of 3.5 because I sure don’t.I don’t really think that’s going to change anything. I think there’s uncertainty and AI. There’s these combination of things that I think are going to slow down the labor market in a way that the Fed might not have the tools to fix.

Henry:Yeah. I have no solve for that. I got nothing for this. I hope you’re wrong.

Dave:Yes. I hope I’m wrong too.

Henry:Hope and a prayer is all I got for you guys.

Dave:Yeah. You know my favorite thing about investing is always wanting to be wrong, but that is my bold prediction. We got to come up with that. We can’t leave on that note. You guys got any fun predictions for 2026? Who’s going to win the Super Bowl?

Kathy:My astrologist says 2026 is a year of great wealth, so let’s just go with that.

Dave:Focus on that. I like that. All right. Astrologist is making a bold ticket.

Kathy:Yes. And when I say my, I mean some lady I listen to on YouTube. So she must be right.

Henry:My bank account’s in retro grade. I don’t know what that means for astrology.

Dave:Okay. I have a real prediction that’s more optimistic. I think more first time investors will land their first deal in 2026 than in 2025 or 2024. I think the buying conditions are going to get better.

Kathy:I agree.

Dave:And I think more people are going to get started as real estate investors, and that’s pretty exciting. That is fun. That’s a good thing that we can go out on.

Henry:I agree.

Kathy:Absolutely.

Dave:Okay, good. And if I’m right about the whole recession thing, mortgage rates could come down. So that could actually help people more a little bit as well. All right. Well, this was a lot of fun. Thank you guys so much. Sorry I was depressing at the end there, but I do want to give my honest opinion about things. I think that’s the whole point of the show is not to always have rose-tinted glasses, but to share what we actually think is going on. But Kathy, thanks so much for being here.

Henry:Thank you.

Dave:Henry, thanks for joining us.

Henry:Absolutely.

Dave:And thank you all so much for listening to this episode of On The Market. We’ll see you next time.