The STR Markets That Looked Good on Paper in 2026 (And What Investors Who Bought There Are Actually Seeing)

The spreadsheet looked clean. A Kissimmee, Florida investor ran the numbers in early 2025 using available market data: average occupancy above 53 percent during spring and summer, a daily rate climbing toward $250, Disney World anchoring demand year-round. The pro forma showed strong monthly income. The purchase closed in April 2025.

By the following February, the numbers looked different. Occupancy had dropped to 46 percent. StaySTRA data shows that across the broader Kissimmee market, active listings had grown from roughly 6,100 to more than 9,400 between the March-through-August averages of 2024 and 2025. Supply had surged 56 percent. Peak season still delivered. But off-peak, from September through February, average occupancy had slid from just above 50 percent to 47.5 percent across the market. That gap, compounded across six months, was enough to turn a projected profit into a near breakeven.

That investor’s story is not unique. It is the 2026 pattern in five of the most actively promoted STR markets of the past two years. The markets looked real. The demand was real. But the projections were built on peak-season snapshots in markets that were simultaneously absorbing year-over-year supply jumps of 18 to 60 percent.

This piece uses StaySTRA database data to examine five markets where investor interest was highest in 2024 and 2025, where supply grew fastest, and where the gap between projected and actual returns has been most pronounced. It is not a cautionary tale. It is a calibration tool.

How Investor Projections Got Built in 2024 and 2025

The STR investment playbook that circulated widely in 2024 and early 2025 relied on a few consistent data inputs: peak-season occupancy (typically pulled from spring and summer months), the highest market average daily rate available, and a revenue projection that multiplied those two numbers across twelve months without much adjustment for seasonality or supply change.

The logic made sense at the surface level. Markets like Nashville had posted sustained demand for years. Austin had a technology economy supporting year-round visitors. Miami had the FIFA World Cup on the horizon. Kissimmee had Disney. Myrtle Beach had affordable entry prices and a summer vacation tradition stretching back decades.

What the projections did not fully account for:

• Supply timing lag. Investor purchases in 2023 and 2024 became active listings in 2024 and 2025. The listings that drove the projections were already competing for bookings before those investors counted on the revenue.
• Off-peak compression. Markets with strong summers often show very different occupancy patterns from September through February. Projecting summer performance across twelve months overstates annual returns by a meaningful margin.
• ADR sensitivity to supply. In a market where supply grows 40 to 60 percent, pricing power in off-peak periods weakens even when peak-season ADR holds. The investor who modeled a year-round daily rate based on summer averages found their listing competing at lower rates in January and February.

The result: investors entered markets at the exact moment when the supply surge they were joining was beginning to compress the very returns they had modeled. StaySTRA data now captures the full annual pattern. Here is what it shows for five of those markets.

Five Markets Where the Numbers Tell the Story

Austin, Texas: The Supply Surge That Outpaced Year-Round Demand

Austin attracted more investor capital in 2024 than almost any other non-coastal STR market. The thesis was straightforward: technology economy, year-round conferences and music events, strong demand fundamentals, and a regulatory environment that remained host-friendly.

The demand fundamentals were correct. The supply math was not.

StaySTRA data shows Austin’s active listing count grew from an average of approximately 7,400 in March through August 2024 to more than 10,600 in March through August 2025, a 43.6 percent supply increase year over year. Peak-season occupancy (March through August 2025) came in at 46.8 percent, compared to 48.5 percent in the same period a year earlier. Average daily rate for the peak season was $288, compared to $284 the year prior. The peak-season compression was modest. The supply surge absorbed without collapse.

The off-peak story is where investors felt the gap. From September 2025 through February 2026, average occupancy across the Austin market was 43.5 percent. The prior-year off-peak average had been 46.7 percent. That 3.2-point decline translates directly to nights sitting empty that the pro forma assumed would be booked.

Average monthly revenue across the Austin market during peak season 2025 was approximately $4,092 per active listing. That number looked reasonable when an investor was running projections in 2024. But the peak-season figure does not represent what the market delivers in October, November, January, or February, when occupancy dips toward the low 40s and more than 8,500 active listings compete for the same booking calendar.

Miami, Florida: The World Cup Story and the Year-Round Reality

No market had a stronger investment narrative heading into 2025 than Miami. The World Cup was coming. International travelers would need accommodations. The city’s luxury STR inventory had room to grow. Early data showed peak occupancy above 52 percent during strong months.

The supply response was dramatic. StaySTRA data indicates Miami’s active listing count grew from an average of approximately 6,200 in March through August 2024 to more than 9,400 in March through August 2025, a 51.1 percent increase year over year. Nearly 3,200 net new active listings entered the market competing for the same pool of bookings.

Peak-season occupancy (March through August 2025) held at 51.7 percent, down only marginally from 52.7 percent a year earlier. The ADR improved from $239 to $268, a 12.1 percent increase. For investors tracking only peak-season metrics, the thesis appeared intact.

The off-peak numbers told a different story. From September 2025 through February 2026, Miami’s average occupancy was 47.7 percent, compared to 53.2 percent in the same period a year earlier. That is a 5.5-point decline in the shoulder and winter months, the period that makes or breaks annual returns for most investors. Average monthly revenue across the Miami market during peak season 2025 was approximately $4,258 per active listing. Investors who built projections on that peak-season figure without discounting for off-peak compression found the annual return did not match the model.

Nashville, Tennessee: When a Great Market Reaches Saturation

Nashville has been one of the most-discussed STR investment destinations in America for the better part of a decade. The bachelorette party economy, the music scene, the corporate relocation story: all of it made Nashville seem like a market that could absorb any amount of new supply.

It absorbed a lot. StaySTRA data indicates Nashville’s active listing count grew from an average of approximately 6,350 in March through August 2024 to more than 7,400 in March through August 2025, a 17.7 percent increase. That is modest compared to Texas markets, but Nashville’s base was already large, and the incremental supply hit a market that had been absorbing investor capital for years.

Peak-season occupancy for March through August 2025 was 49.3 percent, down from 50.5 percent a year earlier. Average daily rate improved from $322 to $339. The ADR story in Nashville complicates the picture: investors who track average ADR see a healthy number, but the spread between high-performing properties in premium Entertainment District locations and struggling properties in secondary neighborhoods has widened. The market average is carried upward by established properties with strong review histories. New entrants face a steeper competitive environment than the headline suggests.

Off-peak occupancy from September 2025 through February 2026 averaged 43.3 percent across the Nashville market. For investors who bought expecting year-round strong performance from a city with a “can’t lose” demand narrative, the winter and fall months have required recalibration. Average monthly revenue during peak season 2025 was approximately $5,001 per active listing, but the off-peak compression narrows that annual average considerably.

Kissimmee, Florida: The Seasonality Trap at Scale

Kissimmee is the most instructive case in this data set because it illustrates the seasonality trap at maximum scale.

The Disney effect creates genuine demand. Families book Orlando-area rentals year-round. The market has real fundamentals. But it also has an extreme seasonal curve that peak-season projections systematically understate.

StaySTRA data shows Kissimmee’s active listing count grew from an average of approximately 6,100 in March through August 2024 to nearly 9,500 in March through August 2025, a 55.9 percent supply increase. Peak-season occupancy for spring and summer 2025 was 54.2 percent, actually up slightly from 53.3 percent a year earlier. The Disney demand absorbed the new supply during the high season. Average peak-season monthly revenue across the market was $4,174 per active listing.

The problem is in the off-peak months. From September 2025 through February 2026, average occupancy across the Kissimmee market was 47.5 percent, down from 50.7 percent in the prior-year period. Occupancy in February 2026 fell to 46 percent, compared to 62 percent in February 2025. That 16-point off-peak decline in a single month reflects both the seasonal pattern and the supply overhang: when family travel slows after the holidays, more than 9,400 active listings compete for a fraction of the bookings that summer brings.

Investors who projected from summer occupancy figures did not model the February reality. The annual average looks very different from the peak number that drove the investment decision in 2024 and early 2025.

Myrtle Beach, South Carolina: The Affordable Entry and the Seasonal Gap

Myrtle Beach attracted investors throughout 2024 and 2025 on a specific thesis: low property prices, strong summer demand, and a coastal market positioned for growth. Entry prices were accessible relative to other beach markets. The math appeared to work.

Supply followed investor interest. StaySTRA data shows Myrtle Beach active listings grew from an average of approximately 5,200 in March through August 2024 to more than 8,300 in March through August 2025, a 60.2 percent increase year over year. That is the largest supply growth percentage of any market in this analysis.

Peak-season occupancy for spring and summer 2025 was 49.2 percent, up slightly from 48.2 percent a year earlier. Average daily rate improved from $241 to $258. On those numbers alone, the market appeared healthy.

But Myrtle Beach has the most pronounced seasonal curve in this analysis. From September 2025 through February 2026, average occupancy was 30 percent, compared to 34.5 percent a year earlier. An average occupancy of 30 percent means roughly one out of three nights is booked during off-peak months. For a market with roughly 8,000 active listings on average competing for that limited off-peak demand, the per-property revenue impact is substantial.

Investors who entered Myrtle Beach on the strength of summer projections are discovering that the affordable entry price came with a seasonal revenue pattern that requires active management to navigate. The annual average across both peak and off-peak periods is lower than the summer snapshot suggested.

The Structural Reasons These Markets Underperformed Expectations

These five markets do not share a single failure mode. They share a set of overlapping conditions that each contributed to the expectation gap.

Supply Grew Faster Than Year-Round Demand

Peak-season demand in these markets absorbed the new supply reasonably well. Families still went to Kissimmee in summer. Bachelorette groups still booked Nashville in spring. Corporate travelers still filled Austin during conference season.

The problem is that off-peak demand did not grow at the same pace. A market that adds 3,000 active listings in 15 months needs 3,000 additional off-peak demand events to maintain the same per-property performance. That demand did not materialize in proportion to the supply increase. Peak-season occupancy held while off-peak occupancy compressed, widening the seasonal gap and lowering annual averages.

Projections Were Built on the Wrong Baseline

Many 2024 and 2025 investment decisions used current market averages as a proxy for future individual property performance. Two problems with that approach. First, market averages include established properties with strong review histories, repeat guests, and years of optimized listings. A new property enters at the bottom of the platform algorithm, not at the market average. Second, the market averages being cited were often peak-season captures, not annual averages.

For a look at which markets are holding their performance heading into Q4 2026, see the STR Markets Holding Occupancy Entering Q4 2026 analysis.

Regulatory and Compliance Costs Were Underweighted

Several of these markets, particularly Miami and Nashville, operate under active STR regulatory environments with permit fees, registration requirements, and compliance costs that do not appear in gross revenue projections. When investors modeled revenue minus mortgage minus expenses, the regulatory line item was often missing or understated. For a deeper look at supply dynamics and how to identify saturation signals before buying, STR Market Saturation 2026 covers the methodology in detail.

The Market Maturation Effect

Markets like Nashville and Austin have been investor-focused destinations for years. The properties that entered in 2019 or 2020 have established review histories, repeat guest relationships, and optimized operations built over multiple seasons. Properties that entered in 2024 or 2025 are competing against that installed base while simultaneously competing against each other. New entrants in a saturated market face a steeper ramp to full performance than the market average suggests.

For a broader look at how 2026 recovery is playing out across markets that experienced this dynamic versus those that did not, see Short-Term Rental Revenue Recovery in 2026.

What Investors in These Markets Are Doing Now

The investors who bought in these markets in 2024 and 2025 are not, for the most part, in distress. They are recalibrating.

The most common adjustment is operational: improved listing quality, better photography, faster response times, and amenity investments that help a property stand out in a more competitive market. In markets like Kissimmee, where peak season still delivers meaningful demand, investors are protecting summer performance while cutting costs during off-peak months. Some have shifted to mid-term rental stays (30-plus days) during the January and February trough to avoid leaving inventory empty during the lowest-demand period.

A meaningful segment of Texas market investors have shifted shoulder-season months toward mid-term rentals, targeting travel nurses, relocating corporate employees, and remote workers for 30-day stays rather than competing for weekend getaways against 10,000 other listings. This does not always maximize gross revenue but provides occupancy stability that makes annual projections more predictable.

A smaller group is considering exit. The hold-versus-sell calculation depends heavily on the individual property’s actual performance, entry price, financing structure, and personal financial circumstances. Market average data describes the environment. It does not describe any single property’s situation.

Red Flags to Check Before Buying in Any Market Going Forward

The investors who navigate Q4 2026 market entry better than early-2026 buyers did will check a few things their predecessors missed.

Active listing count growth over the past 18 months. A market with 50 percent occupancy and 6,000 active listings is a different investment than a market with 50 percent occupancy and 10,000 active listings, even if the headline occupancy looks identical. Supply growth rate matters as much as current occupancy level.

Off-peak occupancy specifically. The September through February average tells you more about annual returns than the June number does. If the data source you are using cannot show you off-peak performance separately from peak, it cannot help you model year-round returns accurately.

The peak-to-trough spread. In markets like Myrtle Beach, the gap between peak occupancy (near 49 percent in summer) and off-peak occupancy (30 percent in winter) spans roughly 19 percentage points. Understanding that spread before you buy lets you plan for it rather than be surprised by it.

Whether new supply has stopped entering. A market where active listings grew 50 percent in 2024 and 2025 has not necessarily absorbed that supply through a full seasonal cycle. The off-peak compression effect may not have fully worked through into the annual average you are reviewing.

How the property you are buying compares to the market average. Condition, location within the market, review history on the listing, and proximity to demand anchors all affect where an individual property lands relative to the market average. Projecting at the market average overstates initial performance for most new listings.

We do our best to keep our reporting accurate and up to date, but situations evolve and we are only human. Always verify current details directly with local officials and sources before making decisions.

The data advantage in Q4 2026 belongs to buyers who use it. Run the actual market numbers on any property you are considering before you close. The StaySTRA Analyzer gives you real occupancy, ADR, and supply trend data for any market in the database. Not a projection. Not a seller’s estimate. The data that tells you what the market is actually doing right now, so you can decide whether the numbers work for you.