Bold 2026 Predictions: A New "Land Rush" and the Real Recession Hits

0:052026 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 Ficke 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? Fantastic. Good to see you. Good to be here. You got some bold ideas for us today?

0:43I don't know how bold it is, but I got one for you. You got some takes. Okay. What about you, Kathy? Anything spicy for us? Oh, I think so. Yep. Opportunity. Okay. Yep. 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. I'm spicier than Henry? That's what you said. You said yours was spicy. Henry said his was just, his is just mild. Okay. Yeah, it's mild sauce. 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.

1:23And 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, right, 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.

2:11Typically, 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.

2:51Typically, 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.

3:25Well, first of all, Henry, I feel attacked, OK?

3:31I 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 cash flow 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.

4:04So 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 it's just – 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. 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 you like if this is truly what you do and you are excellent at providing experiences and researching what types of amenities you need.

4:52Like 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 mind, 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.

5:30And 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 there are buying opportunities on the market right now. You can buy cash flow 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.

6:05You 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 in 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. What do you think this means for the markets where there's a high concentration of short-term rentals? 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.

6:45I 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. Right. And that is hurting the market because there's less places for people to stay. So it just really depends on the market. 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. I just spoke at a CPA event where there was hundreds of people there.

7:27And 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. Sounds like a perfect storm. Yep. 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.

8:03I 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 on. I think unless it has a ton of deferred maintenance, then I would hold it with that kind of news. No, it's in great shape. And you have a low interest rate on it, right? Yeah, like under three. Yeah. You actually have to keep that. Yeah, I know. I know. And I want to go use it.

8:36So I think we're going to keep it. Yeah. All right. I like this bold prediction, Henry. I don't think it's that bold. I do think it's going to 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, you know, we talked a lot about 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, you know, like that's a, that's a good place that you could buy and rent out or, you know, midterm rental one, longterm rental, the other, like there's going to be maybe some more interesting inventory coming on the market, which is always a good opportunity.

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11:57Welcome 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? 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.

12:38Petersburg 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. It was, 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 that we've got now with the one big beautiful bill, that opportunity zones are permanent now. And the governors are, 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.

13:20And the next time that they announce it, it has to be by, I think the end of June of 2026. But some governors are already like 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, you know, 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. You know, we just buy the lots and sit on it.

13:56You 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, you know, an opportunity to improve these areas where they're designated for a reason. Housing is needed, affordable housing. So you could kind of make a difference in those areas while you're making some money. 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.

14:33I think it's July 1st or whatever is the deadline. But maybe, Kathy, can you explain to everyone what an opportunity zone is? I'll do my best, but it's complicated and it's changed a little bit. But with the first round, it's 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 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.

15:19You wouldn't have to put the whole thing in. Like if you sold the house for a million dollars, the gain is$500 ,000. You had originally paid$500 ,000. And 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.

15:54Again, 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 just you just like went out and bought it. You'd 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. Awesome. Yeah. I mean, it does seem like an amazing opportunity.

16:27It's, from my understanding, it's basically like a long-term thing. You need to put money in. Yes. And then if you invest it over, I think the 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 new property. Not on the new property. Yeah. Yeah. Yeah. So there's all sorts of really interesting things here. And I would be interested to see how much the previous opportunity zones spurred property value growth. But I'm imagining in ones that were done right that there probably are really good growth.

17:04And 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. I assume you'll be looking, 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 people that we, the teams that we work with will, will be on top of it. We actually are working with a team in Fort Worth that's building an opportunity zone there. So cool. Yeah, we'll be paying attention. But again, this all happens next year. So it's really a next year thing. All right.

17:35Well, 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, if they're designated by each state, the governor office in 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. The rise of the tech savvy investor is here. You don't need a huge team or tons of overhead to manage rental properties, just the right tools.

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21:13Welcome 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.

21:55because 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 like, 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.

22:27That 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.

23:01And 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 of 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.